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TMI Blog2003 (9) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... h option to get the same redeemed on redemption fine of Rs. 20,000/- and further imposed penalty on the appellant No. 2, as detailed therein. 2.Appellant No. 1 being a company of which appellant No. 2 is a Managing Director. The company was engaged in carrying out the process of embroidery on the base fabrics and also availing facility of compound levy for discharging the duty liability. They had been filing applications for availing special procedure in terms of Rule 96GH from time to time. On 29-7-98, Officers of the Preventive staff of the Central Excise paid a surprise visit to the embroidery unit of the company and at that time all the 9 embroidery machines installed in the unit were found working and fabrics were being embroided. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no cogent, convincing and tangible evidence to prove the evasion of duty by the appellants by running not only one machine for which the declaration was filed for the purpose of discharging duty, but extra 8 machines, during the period in question. The documentary and oral evidence relied upon by the adjudicating authority is inadmissible, insufficient to bring home the allegations as levelled against the appellants in the show cause notice. The impugned order deserves to be set aside. 4.On the other hand, the learned DR has reiterated the correctness of the impugned order. 5.We have heard both sides. From the record we find that to substantiate the allegations of running all the 9 machines instead of only one regarding which declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been in hand of the Director of the company appellant No. 1. This register was maintained by the security staff who were the employees of M/s. Elite Security Services. The appellants availed the services of the security staff, on contract basis. At that time, another unit known as M/s. Arjun Dyeing and Printing Mills was also working in that very premises. The security staff was common for providing security to both the factories. The person who made entries in this attendance register, had not even come forward to prove the correctness of the same. No Statement of any security officer on duty at the time of resuming the register was even recorded by the Central Excise officers. Therefore, from the mere entries in this register regarding w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants were running the factory day and night with all the 9 machines in operation, could also not be given much legal value, for the simple reason that it did not in any manner indicate/prove the running of the 9 machines 24 hours by the appellants. The person who made entries in this register had also not come forward for proving correctness of the same. The Cross-examination of the security staff officer was no doubt allowed by the adjudicating authority, but none turned up to face the same and to depose about the correctness of the entries in this register. 9.The oral evidence on which the adjudicating authority has heavily leaned for passing the impugned order is the statement of the appellant No. 2, Managing Director of the company - a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, along with the appellant No. 2 cannot be doubted as even the investigating officer Shri G.S. Toor who headed the raiding party, has admitted that one person was with appellant No. 2 when he arrived at the factory after learning about the raid by the Central Excise officers. Apart from this, both the statements referred above had been retracted by appellant No. 2 and as such could not be taken as a substantial piece of evidence, rather, these were to be taken only as a weak piece of evidence requiring corroboration from independent source, in view of the ratio of law laid down in Mohindra Dey v. CEGAT - 1992 (58) E.L.T. 192 by the Hon'ble Calcutta High Court and also in Jitender Kumar Ghishulal Jain - 1998 (103) E.L.T. 591. But we find th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, were not put to function by the excise officers at the time of raid or even on the following day to ascertain the correctness of the statement of Ravinder Singh, Embroidery Supervisor. 12.In Laxmi Engg. Works v. CC, Delhi - 2002 (139) E.L.T. 573, Takshila Spinners v. CC, Chandigarh - 2001 (131) E.L.T. 568, it has been ruled that retracted statement of the Director of the company and statement of the witnesses who did not submit themselves to cross-examination could not be made basis for confirming the duty demand against the assessees. The law laid down in these cases very aptly covers the present case in hand, in the light of facts and circumstances detailed above. 13.No evidence has also been brought on record to prove that appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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