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TMI Blog2018 (9) TMI 1492X X X X Extracts X X X X X X X X Extracts X X X X ..... he statements of witnesses - Held that:- Request of cross-examination of Shri Ramu Yadav & Shri R.K. Singh was allowed by the learned Commissioner, but the Department was unable to produce their witness - It is well settled law that if the Department is not able to produce their witness for cross-examination, then the statement of that witness cannot be relied upon. Demand based on MDSD - Held that:- The said MDSD is not a genuine document as there is no corroborative or positive evidence available on record, showing clandestine removal of the goods. Therefore, demand on the basis of the said record-MDSD, is set aside. Demand on the basis of parallel invoices issued by appellant-company and resumed from the premises of Shri Mukul Jain, Commission Agent of fabric - Held that:- The department is mainly relying upon the statements of Shri Mukul Jain, to establish that the goods have been cleared on parallel invoices. The Department has not been able to produce Shri Mukul Jain for cross-examination during the adjudicating proceedings - there is no other concrete evidence available on record to prove that the appellant company has removed goods on the parallel invoices - demand se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersons/associates were also searched and the details of the proceedings including resumption of documents were recorded under the Panchnama dated 25.09.2003 and other dates, also detected the discrepancy in the stocks of raw materials and finished goods. The trading premises of M/s D.C. Marketing, Pili Kothi, Kamla Tower, Kanpur and premises of M/s Sagar Trading Corporation, Raja Market, Kahu Kothi, Kanpur was also searched under the panchnama dated 25.09.2003. The godown premises of M/s Om Textile, Generalganj, Kanpur, residential premises of Shri Sanjay Agarwa, Proprietor of M/s Om Textile-Kurshawan, Kanpur, residential premises of Shri Suresh Chhabaria, Prop. M/s Sagar Trading Co., Swaroop Nagar, Kanpur, residential premises of Shri Anil Agarwal, Prop. M/s Anil Steel, Swaroop Nagar, Kanpur, residential premises of Shri Rajiv Kumar Singh, Dyeing Master of the appellant, Shyam Nagar, Kanpur, the residential premises of Shri Mukul jain, Kingsway Camp, Delhi, residential premises of Shri Arun Ranka, Prop. M/s Arun Enterprises, Adarash Nagar, Jaipur, The trading premises of M/s Arun Enterprises, Bank Chaura Rasta, Jaipur, the trading premises of M/s Anil Steels, Fazalganj, Kanpur, Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prepared and safely stored. At the time of panchnama dated 25.09.2003 Shri Nikhil Agarwal introduced himself as the Director of L. Kant Paper Mills Ltd. and stated that in the Division of Paper Manufacturing, poster paper and Kraft papers were manufactured. In the M.S. Ingots Division, scrap of iron steels is melted along with other additives and then this molten metal was poured in moulds to cast ingots. In Fabric Processing Division the grey fabric was usually processed either on outright purchase or on job work basis. Further, Shri Nikhil Agarwal was confronted with the statement of Shri Ramu Yadav. On the basis of the said panchnama and the statements, show cause notice dated 31.08.2006 was issued, proposing to demand Central Excise duty of ₹ 4,45,65,988/- under proviso to Sub-section (1) of Section 11A of the Act. Further, the amount of ₹ 28,00,000/- deposited during investigation by LKP under TR-6 challans was proposed to be adjusted towards the aforesaid duty liability and proposing imposition of penalty under Section 11AC and Rule 25of the Central Excise Rules, 2001/2002. Further, there was a proposal for recovery of interest on delayed payment of duty und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Copy of Citation in the case of Ravi Foods Pvt. Ltd. vs. Commissioner reported in 2011 (266) E.L.T. 399 (Tribunal). iv) That letter dated 23.02.2005 of Income Tax Department, evidences service of documents only to the Deputy Director, Central Excise Intelligence, Kanpur Regional Unit, Kanpur. v) That the letter dated 23.02.2005 issued by Assistant Commissioner, Income Tax, Central Circle V, Kanpur do not give any suggestion of clandestine clearance of goods on the basis of seized documents. vi) That the documents resumed by Income Tax Department under Panchnama dated 27.11.2002 were in the form of loose paper (s). vii) That it is also not clear from the perusal of Panchnama that Loose Papers were hand written or in the form of photocopy or Original. viii) That the Appellants in their Settlement Application, while making the offer of disclosure of additional undisclosed income have applied flat rate of approximately 8% to work out the gross profit. ix) Accordingly, the appellants disclosed the income of ₹ 2,14,00,000/- for assessment year(s) 1997-98 to 2003-04. x) That the appellant s income has been finally set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unaccounted goods to or from the appellant company. xxi) He submitted that private records are vague and unspecific hence not reliable. Such forged records were not maintained at the instance of management. xxii) He further submitted that no reliance can be placed on the parallel invoices alleged to be recovered from the premises of Shri Mukul Jain. The statement of Shri Mukul Jain is not reliable, as he was not produced for cross examination. He further pointed out various infirmities in the said records. xxiii) He further placed reliance on the decision of Hon ble High Court of Allahabad in the case of Continental Cement Company, to submit that demand on the allegation of clandestine removal cannot be sustained without sufficient corroborative evidence adduced by the Revenue. xxiv) The statements recorded during investigation are not reliable evidence, as they are hit by Section 9D of the Act. Most of the persons have not been examined in the Adjudication proceedings. Further, none of the three witness examined have supported the allegations of Revenue. 5. Learned A.R. for revenue has relied on the impugned Order-in-Original and reiterated the findings of impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Singh, wherein they have stated that they have prepared forged MDSD, as Shri Sharad Bhardwaj (Ex-employee) threatened them to prepare the forged documents, also promised them better job in some other firm. We find that, the said MDSD is not a genuine document as there is no corroborative or positive evidence available on record, showing clandestine removal of the goods. Therefore, demand on the basis of the said record-MDSD, is set aside. 8. Now, with respect to demand on the basis of parallel invoices issued by appellant-company and resumed from the premises of Shri Mukul Jain, Commission Agent of fabric, we find that the department is mainly relying upon the statements of Shri Mukul Jain, to establish that the goods have been cleared on parallel invoices. We find that the Department has not been able to produce Shri Mukul Jain for cross-examination during the adjudicating proceedings. Therefore, as stated above in preceding paragraphs, the said statement of Shri Mukul Jain cannot be relied upon as evidence. We find that there is no other concrete evidence available on record to prove that the appellant company has removed goods on the parallel invoices. In view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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