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TMI Blog2019 (8) TMI 959X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 evidentiary valued particularly when the same was not corroborated with the statutory records of the appellant. Appeal allowed - decided in favor of appellant. - Excise Appeal No. 12133 of 2018, 12451 of 2018, 12559 of 2018-SM - A/11554-11556/2019 - Dated:- 21-8-2019 - MR. RAMESH NAIR, MEMBER (JUDICIAL) For the Appellant: Shri Rahul Gajera with Shri Sarju Mehta, Adv For the Respondent: Shri L. Patra, Asst. Commr. (AR) ORDER RAMESH NAIR The brief facts of the case are that the appellant are engaged in the manufacture of rolled products namely TMT bars, etc. On intelligence search operation at the premises, S/s Himanshu Nandlal Jagani and Yogesh R. Sanghvi, both brokers of round TMT bards at Bhavnagar was conducted and recovered documents from them. Thereafter the search operation was also conducted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statutory records/ transaction of the appellant which prove the authenticity of the transactions. In this regard, he submits that the said finding of the Commissioner (Appeal) is factually incorrect. He submits that the Show Cause Notice was issued by preparing Annexure E which is based on alleged seized diary and assessee s records which do not tally with the statutory records/sales register of the appellant. In other words, none of the entries of the seized records from the premises of brokers were found tallying with the statutory records/sales register maintained by the brokers. Therefore, the finding of the Ld. Commissioner (Appeal) is factually incorrect. He submits that Ld. Commissioner (Appeal) has gravely erred in not appreciating that there was no individual corroborative evidence of clandestine removal in the form of statements of buyers, transportation of goods, receipt of payments from buyers and consumption of excessive raw-material and consumption of excess electricity, etc. The Ld. Commissioner (Appeal) erred in not following the decision of Tribunal in the case of Arya Fibres Pvt. Ltd. vs. CCE reported as 2014 (311) ELT 529 which laid down that findings of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CCE, Mumbai 2014 (314) ELT 176 (Tri- Mum) (3) Haryana Steel Alloys Ltd. Vs CCE, New Delhi - 2017 (355) ELT 451 (Tri- Del.) (4) Rakesh Kumar Garg Vs. CCE- 2016 (331) ELT 221 (Del.) (5) CCE, Raipur Vs Hi Tech Abrasives 2017 (346) ELT 606 (Tri- Del.) 4. I have carefully considered the submissions made by both the sides and perused the records. I find that entire case was made out on the basis of search conducted with the third party which is the broker and the records recovered the from the broker. The records of the broker bearing some entries related to some of the goods. Some statement was recorded from the broker. I find that despite the appellant requested for cross examination, the lower authorities have rejected the request. In the present case, the entire evidence was relied upon are documents recovered from the brokers and their statement. In this case, no evidence was found with M/s Bansal Casting Pvt. Ltd. It was incumbent on the Ld. Commissioner to grant the cross examination of the broker as it is mandatory under section 9D. Without cross-examination of the evidence, their statements cannot be relied upon. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been produced for the purpose of cross-examination nor the statements of drivers who might have actually carried the goods, had been recorded. Moreover no statement of any of the recipients of the goods had been brought on record. Thus the statements of the transporters have remained uncorroborated and also suffers from the short coming of being not being cross-examined by the Appellants. It has been the settled law that the liability cannot be fastened on an assessee on the strength of documents seized from the possession of third party. There should be some corroborative evidence/material. The Tribunal has in the case of Emmtex Synthetics Ltd., supra, when the charge of clandestine removal was made against the Appellants therein out of yarn received from a third party based on the diary, loose documents and packing slips allegedly recovered from Shri B.M. Gupta, Vice President of the Supplier Company, held that no presumption on the basis of uncorroborated, uncross-examined evidence of B.M. Gupta and the alleged entries made by him in the private diary, loose sheets, charts, packing slips could be drawn about the receipt of polyester yarn by the Appellants from the company, M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is no corroboration of their statements with regard to the Trucks by which the goods were allegedly removed or the persons who received the goods. The Truck driver Shri Shiv Bahadur Yadav has also not been cross-examined and cleaner Shri Rakesh Kumar had deposed that the Bills/Invoices are supposed to be with the Driver and he being cleaner had no knowledge. 10.The confirmation of duty in respect of 149 consignments is also based on the records seized from the premises of M/s. Chitra Traders and not on the basis of any record seized from the premises of the Appellant-company. The Revenue has not been able to adduce any corroborative evidence to show the movement of goods from the premises of the Appellant-company to the premises of M/s. Chitra Traders or the Customers whom the goods were sent directly to as per the direction of Chitra Traders. No inquiry has also been made into these Customers who ultimately received the goods. There is no substance in the reasoning given by the Commissioner in the impugned order to the effect that as the party did not challenge the fact of their business association with M/s. Chitra Traders, Delhi, the enquiry further dow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the Appellants. No evidence has been brought on record to show any excess production of the impugned product by the Appellants by way of procuring necessary raw materials. In a similar situation in the case of Moon Beverages wherein the charges of clandestine removal was made on the basis of computerized sheets of sales figures maintained by M/s. Parle Exports Ltd. whom the figures were sent by the assessee, the Tribunal has held that the charge of clandestine removal cannot be established on the basis of one single factor.....Other corroborative evidence such as evidence of other inputs required for manufacture of aerated waters namely sugar, carbon dioxide being purchased and utilized in the manufacture of the final product during the period in dispute is required. There is no such corroborative evidence in the present case. There is also no evidence of higher electricity consumption. In the present appeal before us also there is no corroborative evidence except the PMX Reports. Revenue has also not contradicted the submission of the learned Advocate that the Managing Director of the Appellants was not even questioned about these reports. In the case of Rama Shyama Papers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sulekhram Steels Pvt. Ltd. (supra), the Tribunal has considered that if there is no discrepancy in the raw material and finished goods, no incriminating documents recovered from the assessee, no record showing procurement of raw material for manufacturing of goods, extra payment to labourers, electricity consumption, transportation, etc. the clandestine removal was set aside. The facts more or less of the above judgment is similar to the facts of the present case. Similarly, in the case of Vishva Traders Pvt. Ltd. (supra), the Tribunal has held that in absence of the record to show purchase of raw material for manufacture of final products but when there is no statement of raw material suppliers, in this regard, the persons whose statements were recorded have not been produced for cross-examination, there is no investigation to indicate unusual use of electricity, it was held that no tangible goods to indicate that there was clandestine removal of goods. Accordingly, the demand and penalty were set aside. It was also observed that even though the transporter s statement was recorded but the transporter has not specifically accepted that the goods were transported from assessee s f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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