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TMI Blog2004 (10) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... officers and Panchas entered the premises of 301 Devika Chambers, they came across one person who told his name as Shri D.K. Singh. Surprisingly the statement of the said D.K. Singh could have thrown light as to who was possessing the said premises and for whom he was working in that premises. There is also nothing on record to show that as to who is the owner of said premises, whether these are owned by the Appellant-Company/any of its director or any members of their families or they have taken the said premises on rent. In absence of any such material brought on record, it cannot be claimed by Revenue, merely on the basis of Sunil Garg s statement alone; that too retracted statement, that Devika Chambers was the office premises of the Appellants. We observe that even the statement of Manoj Kumar whom, as per the statement of driver, Shri Arun Kumar used to return the bills after delivery of the goods. We thus hold that Revenue has not proved the case of clandestine manufacture and removal of goods by the Appellants. Consequently, the demand of duty on account of clandestine removal and undervaluation is set aside. Demand of duty on account of shortage of M.S. Ingots in the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner by registered post. 2.2 He also mentioned that the Commissioner has negatived their plea that 301, Devika Chambers was not their premises on the ground that the Appellant, under their letter dated 30-7-2002, requested for release of documents and computers resumed from Devika Chambers, and had, on 23-9-2002, actually received back these documents and computers and that if Devika Chambers did not belong to the Appellants, why was one of their director Shri Sunil Garg present there. The learned Advocate submitted that there is no force in all these findings as these are against the facts; that Shri Sunil Garg was forcefully taken by the Officers from his factory and this can be borne out from the Panchnama dated 3-5-2001 drawn at Devika Chambers wherein it is mentioned that while search was going on "Shri Sunil Kumar Garg, Director of M/s. Opel Alloys (P) Ltd. also came there -"; that this fact clearly disproves the finding of the Commissioner that Sunil Garg was present at Devika Chambers. He, further, submitted that their letter dated 30-7-2002 makes no reference to Devika Chambers; that they had never requested for return of documents and computers seized by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased shown in these Registers with the production and clearance of M.S. Ingots by them; that none of the pages of these "private registers" were shown to Sunil Garg and his so called admission cannot apply to these registers in any case. He further mentioned that the Revenue has placed reliance on 10 Mini Ledgers; that the figures in these ledgers were inconsistent with those in the Private Registers; that External Weighment Slips are purported to have been issued by Shriram Dharam Kanta and Neelam Dharam Kanta; that no statement had been recorded from any person of Shriram Dharam Kanta; that Shri Vineet Kumar of Neelam Dharam Kanta did not, in his statement, state that the said weighment slips pertained to the Appellants' clearances; that in fact no such question was put to him by the Officers; that it has been held in the case of Rhino Rubber P. Ltd. v. CCE, 1996 (85) E.L.T. 260 that third party records cannot be relied upon to establish an allegation of clandestine removal. He also mentioned that the Department has relied upon certain loose papers allegedly showing payment to certain persons and it has been presumed without any basis that the loose papers show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd for manufacturing alleged huge quantity of ingots, they should have employed a very large manpower; that the Appellants had only 23 persons in their rolls for which the Appellants had made necessary payments to the E.S.I.; that the Department did not make any enquiry as to how much manpower was being employed by them. 4.4 He also mentioned that the furnace oil for running D.G. Sets was obtained by way of permits issued by Oil Corporations; that the Appellants had the permits for only 150 Kl from I.O.C. and B.P.C.L.; that the allegation of the Department on the basis of document recovered from Devika Chambers is that they had consumed a huge quantity of furnace oil as compared to the quantity declared in the statutory records; that the Department had not even enquired either from the Appellants or from the outside source as to from where they could get such a huge quantity of furnace oil; that more over they had only storage capacity of 15 kl at the relevant time and then how could they store such a huge quantity of furnace oil required for running D.G. sets. 4.5 He further mentioned that their contention that Devika Chambers does not belong to them is also substantiated from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (130) E.L.T. 271 (T) wherein it has been held that entries in a private note book "at the most, it may raise a doubt but that cannot take the place of proof -- but the charge of clandestine removal cannot be sustained on such suspicion." (iv) Gurpreet Rubber Industries v. CCE, Chandigarh, 1996 (82) E.L.T. 347 (T) (v) Rama Shyama Papers Ltd. v. CCE, Lucknow, 2004 (168) E.L.T. 494 (T) (vi) Madhu Aluminium v. CCE, Indore, 2003 (54) RLT 296 (T) (vii) Ess Vee Polymers (P) Ltd. v. CCE, 2004 (165) E.L.T. 291 (T) = 2004 (93) ECC 305 (T) (viii) Gian Mahtani v. State of Maharashtra, 1999 (110) E.L.T. 400 (S.C.) The Apex Court has held that "according to the system of jurisprudence which we follow, conviction cannot be based on suspicion nor on the conscience of the Court being morally satisfied about the complicity of an accused person. He can be convicted and sentenced only if the prosecution proves its case beyond all reasonable doubt." 5. The learned Advocate, therefore, contended that no case of clandestine manufacture and removal has been established by the Department and the allegations are based merely on surmises and conjectures. He finally submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s; computers installed therein contain the accounts of his various units viz., Mohan Metal Works, Prakash Sales Corporation and OPEL; that he also mentioned in his statement that loose papers found in his brief case relate to a bogus firm as it contains details of work done in OPEL; that Shri Sunil Kumar Garg admitted in his statement that the documents/records seized from Devika Chambers pertain to Opel Alloys (P) Ltd.; that the Department did not receive the so called retraction and the prescription of doctor and bills of medical stores for purchase of medicines. The learned Senior Departmental Representative emphasised that though in the Affidavit, Shri S.K. Garg, has alleged of taking his bag containing cash by the officers, keeping him forcibly in Excise Office and thrashing and beating by the Central Excise Officers, he had not filed any FIR or lodged any complaint with the Police against these alleged atrocities; that further the medical examination report also does not support the Affidavit as it mentions of some swelling and pain only and he refused to get himself admitted in the hospital; that in his subsequent statement recorded on 14-8-2001, he does not mention any thin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judicial Court later on." The Tribunal regarded the "retraction being belated and after thought." He also referred to the decision in Deputy Director of Enforcement v. A.M. Ceaser, 1999 (113) E.L.T. 804 (Mad.) wherein the Madras High Court has held that unless the threat and coercion from the officers appears to be true, the Courts are not bound to accept the explanation offered by the accused. The Court has further held that "If the statement of the accused is accepted to be voluntary as held above, there is no provision in the Act that such statement shall not be accepted unless corroborated by any independent evidence." The learned Senior Departmental Representative contended that as Shri S.K. Garg has not proved coercion or threat exercised by the officers and his retraction was not received by the Department, his confessional statement is to be relied upon without any other corroboration; that it has been held by the Tribunal in Tara Chand Shival v. CCE, 2003 (158) E.L.T. 699 (T) that as original affidavit retracting from confessional statement was neither submitted to the Commissioner nor there is any evidence on record to show that affidavit was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Devika Chambers goes to establish that the said premises was the Appellants' office premises for the purpose of keeping records, etc.; that for this reason the Commissioner was of the view that there was no need to grant opportunity of cross-examining the panchas. The learned Senior Departmental Representative mentioned that Relied upon documents (RUD) Nos. 17 and 18 clearly bears the name of the Appellants' Company as follows - "Opel Alloys Pvt. Ltd."; that these Registers and one Note book (RUD 68) show actual purchase of M.S. scrap and production and sale of M S ingots; that moreover a number of sheets recovered from Devika Chambers bear stamp mark of the Appellants Company; that these facts clearly go to establish that the documents recovered from Devika Chambers pertain to the Appellants and the said Chambers was their office premises. He mentioned that cross-examination is not necessarily a part of reasonable opportunity as held by the Madras High Court in the case of K. Balan v. Government of India, 1982 (10) E.L.T. 386 (Mad.); that the Tribunal has also held in the case of Calicut Rubber Company v. CCE, Cochin, 1996 (81) E.L.T. 320 (T) that cross-exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records recovered from 301, Devika Chambers which does not belong to them; the Revenue has not brought on record any material to show the purchase of raw materials, transport thereof, sale and transport of the alleged finished goods; non-availability of work force to produce such a huge quantity of ingots and the production capacity of their induction furnace. On the other hand, Revenue has contended that Devika Chambers was the office premises, of the Appellants and on some of the papers and two Registers, the name of the Appellant-Company was mentioned and Shri Sunil Kumar Garg, Director, had admitted that Devika Chambers was their office premises and in view of his admission no further proof was required to be produced by Revenue. After considering the various submissions and decisions relied upon by both the sides, we are of the view that the Revenue has not succeeded in establishing that 301, Devika Chambers was the office premises of the Appellants. No doubt Sunil Garg has mentioned in his statement dated 3-5-2001 that Devika Chambers is his own office where records of his various companies are stored. However, he has retracted same on 5-5-2001 by swearing in his Affidavit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een recorded as there is no such statement on record. Under the law, the retracted statement is required to be corroborated in material facts. No such corroboration has been brought on record. We observe that the search proceeding in Devika Chambers was conducted in the presence of one D.K. Singh. It is also mentioned in the Panchnama that when officers and Panchas entered the premises of 301 Devika Chambers, they came across one person who told his name as Shri D.K. Singh. Surprisingly the statement of the said D.K. Singh could have thrown light as to who was possessing the said premises and for whom he was working in that premises. There is also nothing on record to show that as to who is the owner of said premises, whether these are owned by the Appellant-Company/any of its director or any members of their families or they have taken the said premises on rent. In absence of any such material brought on record, it cannot be claimed by Revenue, merely on the basis of Sunil Garg's statement alone; that too retracted statement, that Devika Chambers was the office premises of the Appellants. 11. The learned Senior Departmental Representative has relied upon a number of decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arbitrarily or without exercising discretion in the facts of each case". In the present matters, the Adjudicating Authority has, while mentioning the reasons for not allowing cross-examination, mentioned that the Appellants under their letter dated 30-7-2002, had requested for release of unrelied upon documents 'and computers resumed from 'Devika Chambers'. A perusal of said letter dated 30-7-2002 reveals that there is no mention of Devika Chambers in the said letter at all. The learned Advocate has submitted that the Department on its own handed over the Laptop which was given to it by Sunil Garg and while handing over the laptop, the Officers also gave the unrelied documents etc. recovered from Devika Chambers. There is substance in his submission that this alone cannot determine the fact that Devika Chambers was the Appellants' office. The learned Advocate has also controverted the submission made by learned Senior Departmental Representative that on RUD 17 and RUD 18 the name of the Appellant-Company was written by submitting that the said name was written only on the day of recovery itself. It has not been rebutted by Revenue. 12. The learned Advocate ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally manufactured and packed, etc. When Central Excise Officers visited the premises of the Appellant they did not find any excess stock of raw material or finished goods. Infact the officers found shortage in the stock of finished goods vis-a-vis stock shown in statutory record. The statement of driver may again creates a doubt only as no further investigation has been conducted by the Department by bringing on record the statement of the persons whom the unaccounted goods alleged to have been delivered by the said driver. We observe that even the statement of Manoj Kumar whom, as per the statement of driver, Shri Arun Kumar used to return the bills after delivery of the goods. We thus hold that Revenue has not proved the case of clandestine manufacture and removal of goods by the Appellants. Consequently, the demand of duty on account of clandestine removal and undervaluation is set aside. As far as demand of duty on account of shortage of M.S. Ingots in the factory premises is concerned, the Appellants have not made any submission. In fact the learned Advocate has not challenged the said demand of duty. Accordingly we uphold the demand of duty amounting to Rs. 1,59,206/-. Penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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