9911796707
TMI Blog2019 (4) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... rom two parallel sources, the manufacturing company and its dealer. The data supplied by manufacturer also included the purchases through its dealer. This has resulted in artificial escalation in value of raw material to 5,06,46,859/- instead of correct amount of 3,09,08,423/- - there is no force in the findings of procurement and receipt of unaccounted or additional raw materials and use thereof in clandestine manufacture of the finished goods and set aside the findings relating thereto. Rejection of the request of Cross-examination - HELD THAT:- The denial of cross-examination of Shri Nirmal Jeet Singh owner of transport namely M/s Krishna Road Lines, Shri Umang Kumar and Ramchandra both ex-employee of the appellant was essential to test the purpose of maintenance of parallel manual records (the relied upon documents) and the contents recorded therein. It was more so in the case of Sh. Umang Kumar, who had explicitly through his written communication denied any linkage of the documents prepared by him without the knowledge of the appellant, and after 7 months of his disassociation from the appellant - also, cross-examination of Shri Nimaljeet Singh was not rejectable even on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f facts are that the appellant is engaged in the manufacture of PP disposable glasses since December, 2009. They also have another unit of rice-mill. They were availing SSI exemption and were not registered with the Department. The premises of the appellant was inspected/searched on 24th July, 2012 including their office premises. The following premises were searched (i) office premises at Bartan Bazar Wali Gali (near Baba Jewellers), Subhash Nagar, Pukharayan (ii) Office premises at Jai Hanuman Chawal Udyog Pvt. Ltd., Byepass Road, Highway, Barhauli, Pukhrayan wherein the activity of the Rice Milling takes place and (iii) Factory premises of the appellant situated at By Pass Road High Way, Baholi, Pukhrayan. During the course of inquiry and scrutiny of GRs resumed from the appellant and re-conciling the same with the Transporter, M/s. Krishna Road Lines, the details contained in the freight register furnished by the Transporter were found tallying with the respective copies of the GRs resumed from the factory premises of the appellant, relating to the transportation of the goods. It further appeared that, as recorded in the show cause notice that the appellant received payment for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se notice dated 16.1.2013 and duty demand along with penalty was raised vide show cause notice dt. 1.5.2015. 4. Both the show cause notices were adjudicated on contest by common order-in-original and the proposed demand was confirmed, as well as confiscation along with penalties. Penalty was also imposed under Rule 26 on the partner - Shri Bal Krishna Omer. 5. Being aggrieved, the appellant had filed appeal before the Commissioner (Appeals), who vide the impugned order-in-appeal confirmed the demand and penalty on the appellant firm but was pleased to set aside the penalty imposed on the partner, Shri - Bal Krishna Omer. 6. Being aggrieved, the appellant is before this Tribunal. The following evidences /RUD have been relied upon, in the impugned order. List of relied upon documents 1. Panchnama dated 24.07.2012 drawn at the premises of M/s Jai Hanuman Chawal Udyog (P) Ltd., Pukhrayan (Total 04 pages); 2. Statement of Shri Bal Krishna Omer, Partner of M/s Jai Hanuman Rice Industries, Pukhrayan recorded on 24.07.2012 (Total 03 pages); 3. Panchnama dated 24.07.2012 drawn at the office premises of M/s Jai Hanuman Rice Industries situated at Bartan Bazar Wali gali, Pukhrayan (To ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s Jai Hanuman Rice Industies, Pukhrayan for the period from 01.11.2009 to 31.07.2012 (Total 32 pages); 20. Statement dated 21.03.2013 of Shri Bal Krishna Omer, Partner of the party's firm (03 pages); 21. Statement dated 07.10.2013 of Shri Bal Krishna Omer, Partner of the party's firm (03 pages); 22. Details of sales as per resumed loading slips:- Annexure-A(i) - Total 12 pages, Annexure-A(ii) (a) - Total 29 pages; Annexure A(ii) (b) - Total 02 pages; Annexure-A(iii) -Total 12 pages. 23. Details of sales as per invoices/challans for which no loading slips found:- Annexure-B(i) - Total 05 pages, Annexure-B(ii)(a) - Total 06 pages, Annexure-B(ii) (b) -Total 03 pages, Annexure-B(iii) (a) -Total 02 pages, Annexure-B (III)(b) -Only 01 pages, Annexure-B (iv) - Total 02 pages. 24. Details sales as per invoices for which loading slips found:- Annexure-C(i) -Total 02 pages, Annexure-C(ii)(a) -Total 06 pages, Annexure-C(ii) (b) -Only 01 pages, Annexure-C(iii) -Total 02 pages, 25. Details of total sales as per all the invoices resumed:- Annexure-D(i) -Total 05 pages, Annexure-D(ii) -Total 08 pages, Annexure-D(iii) -Total 06 pages, Annexure-D(iv) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same were seized for want of production of finished goods records, despite the admitted fact that the said records were under resumption by the search team. On perusal and comparing the physical balance of finished goods stocks with the recorded balances in the resumed manually prepared and also soft copies of stocks registers, we do not find any variation. This fact is also discernible from the following table: Sl. No. Description of goods Qty. found as per physical verification found by the officers (in cartons) Qty. As per record (manual stock register/ soft copy of stock register in CPU) (in cartons) Difference (Col. 3-4) 1 2 3 4 5 1 250 No. PP Glass 1901 1901 Nil 2 300 No. PP Glass 190 190 Nil 3 130 No. PP Glass 640 640 Nil 4 100 No. PP Glass 510 510 Nil 5 80 No. PP Glass 546 546 Nil 6 65 No. PP Glass 472 472 Nil 7 90 No. PP Glass 171 171 Nil 8 Plastic Bowl (katori) 180 180 Nil We, therefore, hold that order justifying the confiscation of the finished goods is not consistent with the facts on records and against the provisions of law. 9. We also find from the resumed records, that there is no discrepancy in the raw materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there being corroborative evidence to reflect upon the clandestine removal, is not sufficient for holding against the assessee. Therefore, the pre-deposit of ₹ 20 lakhs by the appellant was inconsequential to establish case as alleged against them, under the facts and circumstances of the case. 12.0 The next issue for consideration is of rejection of the request of Cross-examination on the ground that the appellant's request appeared more like a ploy to protract the proceedings and is nothing but a dilatory tactic, by making sweeping observations that the documents clearly proved the case of the department; holding that the cross examination is not a mandatory procedure, and its denial does not amount to violation of natural justice, or in no manner vitiates the adjudication proceedings. We have considered the rivals arguments on the denial of cross-examination and find the request of cross-examination is well reasoned. We, therefore, hold that the denial of cross-examination of Shri Nirmal Jeet Singh owner of transport namely M/s Krishna Road Lines, Shri Umang Kumar and Ramchandra both ex-employee of the appellant was essential to test the purpose of maintenance of paral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural justice and as a consequence, the relied upon statements and the records referred therein have to be eschewed from the proceedings. 13. Coming to the other issue of interrogation/ cross-examination of the known authors of Sale Enquiry/ Loading slips and the Sale registers, Ledgers, Cash Book, Bank Book documents, namely S/Shri Ramchandra and Umang Kumar, both employees of the appellant. The learned Advocate pointed out that Shri Umang Kumar had voluntarily made determinative disclosure through written communication dated 11.10.2013, addressed to the Investigator / Supdt. With a copy to the appellant (Annexure -9/ Page 356-357 of appeal paper book), inter-alia, explaining the entire matter relating to re-starting of the manual records, revival of practice after a gap of 6 to 7 months period, and emphatically denying linkage of these documents to the Appellant's activities and in support thereof clarifying why the entries of receipt of cash as reflected in the Cash Book do not tally with those shown in the party ledger. The learned Advocate have urged that despite these facts, neither his statement was recorded nor deposition (affidavit) made through written communication had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is statement recorded on 22.01.2013, further supports the clandestine clearances, The Court below have also drawn support from the retracted statements of Shri Bal Krishna Omer, Partner of the appellant, to claim that all the Loading/ Enquiry Slips were prepared for sale and the sale values shown in the loading slips and ledger were correct. 15. The learned Advocate, countering the findings, demonstrated that the actual sales are represented by invoices only and that the Enquiry/ Loading Slips are unconfirmed offer to sale / purchase. That only few of those Loading/ Enquiry Slips are transformed into potential sales, which after negotiation between the buyers and the Partner of the appellant, got approval of the partner. Further the relied upon GR bearing transporters name as M/s Krishna Road Lines and M/s Triveni Freight Carriers have come from nowhere i.e. neither resumed nor provided by any persons during investigation and therefore has no evidentiary value. It is further pleaded that the statement of Nirmaljeet Singh was not reliable without evaluation of their voluntary nature and truthfulness of the contents thereof. 16. Learned Departmental Representative reiterated the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appellant, being manufactured by several persons, there is cut throat competition in the market. 21. We have also glanced through letter dated 11.10.2013 of Shri Umang Kumar, (to the Supdt. (Prev.), to notice his reasoned denial of linkage of entries in sale register and party ledgers with the appellant's activities (page 356-357 of the appeal paper book). We also notice that the entries in party ledgers, are all supported by backup documents like resumed cash book etc. in as much as the entries of receipt of cash as reflected in the Cash Book, did not tally with those shown in the party ledger. 22. In light of the aforesaid facts on records and the circumstances, we find that Sale Enquiry Slips/ Loading Slips and manually prepared sale registers are not admissible evidences. Thus these two incredible / suspect documents viz Sale Enquiry Slips/ Loading Slips and manually prepared sale register and party ledgers, cannot legally corroborate each other to establish their credibility. We accordingly set aside the findings of the Court below in the impugned order and hold that the reliance on Sale Enquiry Slips/ Loading Slips and manually prepared sale register and party ledgers is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and circumstances the said documents adduced by the Revenue are not credible and inadmissible as evidence to substantiate the charges of clandestine manufacture and removal. 27. Learned Advocate further urged that the charge of clandestine removal is required to be proved beyond doubt by the revenue and that entries in private records at the most, may raise a doubt, but that cannot take the place of proof. In support reliance was placed on decisions in the case of Sharma Chemicals v. CCE, Kolkatta-II [2001 (130) ELT 271 (T) and CCE Trichy vs. Ravishanker Industries -2002 (150) ELT 1317 (Tri.). 28. We further find that the Revenue have failed to bring out any concrete, corroborating, reliable and independent evidence even distantly establishing receipt of additional raw-materials, production of finished goods, transportation of goods, transit seizure, seizure/ at the buyers end, of clandestinely removed finished goods consignments, receipt of Sale proceeds including additional consideration in support of alleged under valuation, etc. To substantiate allegations of the clandestine manufacture and removal and undervaluation, etc. corroborative evidence is required. 29. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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