9911796707
TMI Blog2019 (8) TMI 959X X X X Extracts X X X X X X X X Extracts X X X X ..... proposing demand of Central Excise duty of Rs. 33, 90,573/- under section 11A(4) of Central Excise Act, 1944 along with interest under section 11AA of the Act and imposition of penalty under section 11AC of the Act read with Rule 25 of the Central Excise Rule, 2002 upon M/s Bansal Casting Pvt. Ltd., personal penalty under Rule 26(1) of the Central Excise Rules,2004 imposed upon appellant Shri Atul Bansal & Shri Himanshu Nandlal Jagani. The Show Cause Notice was adjudicated by the Adjudicating Authority whereby Central Excise Duty of Rs. 33,90,573/- was confirmed under section 11A(10) of the Act, along with interest under section 11AA of the Act and penalty of Rs. 33,90,573/- was imposed under section 11AC of the Act read with Rule 25 of the Central Excise Rules upon M/s Bansal Casting Pvt. Ltd. with option of reduced penalty as per section 11AC(1)(b) of the Act, penalty of Rs. 33,90,573/- on Shri Atul Bansal, Director of Bansal Castings Pvt. Ltd. and penalty of Rs. 16 lakh on Shri Himanshu Jagani were imposed under Rule 26(1) of the Central Excise Rules. Being aggrieved by the said OIO, appellants preferred appeals on various grounds. Ld. Commissioner (Appeal) upheld the OIO in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in the diaries recovered from the brokers Mr. Himanshu Jagani and Yogesh Sanghvi was addused. None of the transporters in their similarly worded statements have stated specifically that any of the entries from the diaries the removal of goods from the factory of the appellant to any particular buyers premises. He further submits that the appellant M/s Bansal Castings requested for cross examination of the brokers whose statement was solely relied upon in the entire case. The adjudicating authority rejected the request which was also supported by Ld. Commissioner (Appeal). He submits that the entire case is based on third party evidence and their statements. Then it is necessary to grant the cross-examination. He also submits the statement of Shri Atul Bansal, Director of the M/s Bansal Castings is ex-culpatory. In support of his submission he placed reliance on the following judgments: (1) Vishva Traders Pvt. Ltd. v/s CCE, Vadodara 2012 (278) E.L.T. 362 (Tri.- Ahmd.). The same was upheld by Hon'ble Supreme Court in the case of reiterates at CCE vs. Vishwa Traders Pvt. Ltd. 2014 (303) E.L.T. A24 (SC). (2) Sulekhram Steels Pvt. Ltd. Vs CCE, Ahmedabad-II 2011(273) E.L.T. 140 (T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or cleaner of the Truck which was in the process of loading on 22-6-2001 when the Central Excise Officers visited their factory premises. The Appellants, on the other hand, have contended that most of the persons whose statements have been relied upon have not been produced for cross-examination and the documents seized from third parties' premises have not been corroborated by adducing evidence of any of the customers though the enquiries were conducted at different places as deposed by Shri Anurag Sharma, Inspector, in his cross-examination on 4-3-2002. Out of 19 consignments said to have been cleared by the Appellant No. 1 without payment of duty on the basis of five transporter, we observe that in respect of two consignments, it has been mentioned by the Revenue that the same may not pertain to the Appellants. Further, only one transporter Shri Sanjay Garg of M/s. Balaji Transporter Co. was produced for cross-examination which accounts for only two consignments out of 19 consignments in question. Shri Garg, it is observed from the record of cross-examination, has deposed that they generally work as commission agent and provide transport to Appellant No. 1; the payment is used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on such assumptions and presumptions without any tangible evidence will be vitiated by an error of law". The Tribunal also took note of the decision in Kamal Biri Factory and Shri Khushnuden Rehman Khan v. CCE, Meerut - 2003 (161) E.L.T. 1197 (T) = 1997 (23) RLT 609 (CEGAT) wherein view has been taken that the allegations of clandestine removal of the goods will not stand established when based on the entries made by the assessee's employee in a diary or on the basis of third party's record in the absence of any corroborative evidence. It has also been the consistent view of the Tribunal that the statements of the witnesses, without allowing the assessee to test the correctness of the same by cross-examining those witnesses; cannot be made the basis for holding the allegation against the assessee. (Takshila Spinners v. CCE, supra). Similar views have been expressed by the Tribunal in the case of Haryana Petrochemicals Ltd., supra wherein the Tribunal has held that reliance cannot be placed on the documents maintained by a third party "who did not have the courage to come forward for cross-examination in order to test the veracity and correctness of the private record maintained by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir books of account. It is also noted that none of the transporters and none of the labourers whose statements have been relied upon by Revenue have mentioned that the goods in question were delivered to Chitra Traders from the premises of the Appellants. The material brought on record may at the most create a doubt only. But doubt cannot take the place of evidence. The Revenue has, thus, not proved its case against the Appellants in respect of 149 consignments. We, therefore, set aside the demand of duty and penalty imposed on Appellant-company and consequently the demand of interest. From the above decision which is based on various Supreme Court decisions, it is clear that when the brokers whose statements were recorded are not produced for cross examination such statements cannot be relied upon against the assessee. Therefore, as per the settled legal position, since in the present case witnesses, i.e. brokers and transporters were not allowed for cross examination, their statements cannot be relied upon. In such a case, the only evidence left is the diaries/private records of the brokers. Since the statements cannot be relied upon, these records in isolation has no evidenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue which cannot be discharged merely on the strength of the entries made in the records of a third party without linking the removal of goods from the premises of the Appellant Company." In the present matter also the Revenue has not brought any material on record to show that the excess bag-in-boxes said to have been sold by M/s. Hyderabad Beverages were removed from the premises of the Appellants. As show cause notice alleging clandestine removal cannot be issued based on assumption and presumption and as held by the Supreme Court in Oudh Sugar Mills Ltd. v. U.O.I., 1978 (2) E.L.T. (J 172), the findings based on assumption and presumption without any tangible evidence will be vitiated by an error of law. We, therefore, set aside the demand on charge of clandestine removal. In view of above judgment, only on the basis of third party records, the demand cannot be confirmed alleging the clandestine removal. I also observe that despite the investigating officers recovered the diaries/ private records from the brokers no investigation was conducted to the effect who are the buyers of the goods, whether any payment was received by the appellant against the alleged clandestine rem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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