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TMI Blog2022 (8) TMI 1251X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon his statement. Department had demanded excise duty on finished goods, alleging that the Appellant have clandestinely removed the goods by relying on the broker s records and oral statements and without any corroborative evidence either from the Appellant s premises or from the Customers documents etc. Despite the appellant requested for cross-examination of witnesses, the lower adjudicating authority has rejected the request of appellant. As per the provisions of section 9D it is clear that during adjudication, the adjudicating authority is required to first examine the witness in chief and also to form an opinion that having regard to the facts and circumstances of the case, the statements of the witness are admissible in evidence. Thereafter, the witness is offered to be cross-examined. It is a settled principle of law that if the authority wants to rely upon the statement of any witness, the opportunity of cross-examination ought to have been given to enable the party to prove its case. Non-providing of the opportunity of cross-examination amounts to violation of the natural justice and in absence of denial of natural justice, such documents/statements cannot be relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Payment of Central Excise Duty. Searches were conducted at the premises of Shri Himanshu Nandlal Jagani, Broker and Statements of broker was recorded and entries recorded in the notebook/dairies retrieved during the course of investigation revealed that manufacture of excisable goods and clearances thereof to buyers were made against cash transactions. He explained the code used by them and the transaction recorded in the said notebooks/ diaries. Investigation also conducted at the end of Appellant M/s Shree Hari Steel Industries during the search various documents were seized. On the basis of documents drawn at the office premises of Shri Himanshu N. Jagani, broker and with the sales report of the Appellant it appears that no invoices or sales bills have been issued by the Appellant for the goods mentioned in the most of the entries of the said records and the good have been removed without payment of duty and without issue of invoice. Statement of Shri Nagijbhai Jivrajbhai Dodiya, partner of Appellant was recorded wherein he admitted the removal of goods without payment of duty through the Broker. For further investigation, some of the transporter whose name and /or vehicle no. w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ination and affidavit of Shri Nagjibhai. Therefore, no duty demand is sustainable. He placed reliance on the following decisions. (i) Bansal Castings Pvt. Ltd. order passed in Appeal No. 12451/2018 (Ahd. CESTAT) (ii) P.D. Industries Pvt. Ltd. 2016 (340) ELT 249 (Tri. Del) (iii) Sada Shiv Steel Mills 2017 (357) ELT 481 (Tri. Chen. ) (iv) Ashutosh Metal Industries 2018 (15) GSTL 384 (Tri. Del) (v) Vishwa Traders Pvt. Ltd. -2012 (366) ELT 1019 (vi) Vishwa Traders Pvt. Ltd. 2013 (287) ELT 243 (Guj - HC) 6. On the other hand, Shri. R P Parekh, Learned Superintendent (Authorized Representative) appearing on behalf of Revenue reiterates the findings of the impugned order. He argued that the record recovered from the brokers bearing the details of clearances which tallied with the statutory records maintained by the Appellant, there is a clear corroboration of the evidence. Hence, demand was rightly confirmed by the lower authorities. 7. Heard both the sides and perused the case records. 8. We 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 from the broker. The Ld. Adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e demand of duty and allegation of clandestine removal. It is well settled law that there has to be some concrete evidence in the form of receipt of raw materials, shortage of raw materials, clandestine manufacture including use of electricity, excess or shortage of inputs found in the stock, flow back of funds, purchase of final products by parties alleging receipt and removal of goods and any such evidence which would show clandestine manufacture of goods. It is also an admitted facts that the documents recovered from the premises of Broker are third party documents and same cannot be relied upon without any corroborating evidences. Therefore, the entire case is based on entries found recorded in the record of broker does not have reliability and credibility. 10. We further note that the allegations of clandestine removal are required to be established by production of positive and tangible evidences and should not be arrived at on the basis of assumptions and presumptions. Case of the Revenue is based upon the statement of the co-accused which statements are not supported by any independent corroborative evidence. It is again well settled that confession of co-accused cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the judgment of Rama Shyama Papers Ltd. (supra). cited by Ld. Counsel, he pointed out following para 9 10: 9. 9. We have considered the submissions of both the sides. The Revenue has charged the Appellants with clandestine manufacture and removal of paper mainly on the basis of documents seized from the premises of Chitra Traders and Transporters and the various statements recorded from the Proprietor of Chitra Traders, transporters and labourers working in the factory of the Appellants and also the driver 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. HPL, in a clandestine manner during the period in question. Similarly, no inference could be legally drawn against the Appellants of having manufactured texturised yarn out of the said polyester yarn and the clearance thereof, in a clandestine manner without the payment of duty. The Tribunal had also referred to the decision in Oudh Sugar Mills Ltd. v. Union of India, 1978 (2) E.L.T. (J172) wherein the Apex Court has observed that no show cause notice or an order can be based on assumptions and presumptions. The findings based on such assumptions and presumptions without any tangible evidence will be vitiated by an error of law . The Tribunal also to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce 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 down the line was not considered necessary. The onus of proof that the goods were removed by the Appellants without payment of duty and without entering the same in their records is upon the 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. The mere fact that the Appellant-company had business relation with Chitra Traders, does not mean that they will be liable to each and every entry made by Chitra Traders in their books of account. It is also noted that none of the transporters and none of the labo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng purchased and utilized in the manufacture of the final 7 E/12133, 12451 12559/2010-SM 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 Ltd, supra, wherein the records were seized from the premises of one of the customer of the assessee, the Tribunal did not uphold the charge of clandestine removal as the Revenue has not been able to adduce any corroborative evidence to show the movement of goods from the premises of the Appellant s company to the premises of M/s. Chitra Traders or the Customers when the goods were sent directly to as per the directions of Chitra Traders... The onus of proof that the goods were removed by the Appellants without payment of duty and without entering the same in their records is upon the Revenue which cannot be discharged merely on the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en there is no statement of raw material suppliers, in this regard, the persons whose 8 E/12133, 12451 12559/2010-SM 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 factory and only general statement was given by the transporter, particularly, when the transporters were not allowed a cross-examination, there is no evidence of transport of goods also. As regard Revenue s submission and case laws relied upon, I find that the case of clandestine removal is based on its individual facts. Therefore, as per examination of the facts of the present case, I find that the facts of the cases relied upon by the Revenue are not applicable in the present case. As per my above discussion and findings which is based on the settled legal position as per above cited judgments, I am of the view t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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