Clandestine clearance of processed fabrics proved by register entries and admissions, with retraction and documentary defences rejected.

Evidence from a recovered packing and folding register, the proprietor's admissions, and surrounding documents was treated as sufficient to establish clandestine clearance of processed fabrics. The later retraction affidavits were found inadequate because they did not satisfactorily explain the earlier statements, while the defence based on alleged independent manufacture, octroi and purchase records, electricity consumption, and a Chartered Engineer's certificate was rejected as belated or unsupported. On that basis, the duty demand, interest, and penalties were upheld.

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Issues: Whether the demand of duty, interest and penalties was sustainable on the basis of the packing and folding register recovered from M/s. Sunira Traders, the statements of the proprietor and connected persons, and the surrounding documents, so as to establish clandestine removal of processed fabrics.

Analysis: The packing and folding register recovered from M/s. Sunira Traders was found to contain separate sections and specific entries relatable to work undertaken for Shri Krishna Screen Print Art. The proprietor, who was common to the connected units and the sole beneficiary of the alleged evasion, had repeatedly stated that the register reflected the processing, cutting and folding activity and that the goods were cleared in the name of M/s. Shri Govardhan Textiles. The later affidavits of retraction were held insufficient, as they did not satisfactorily explain the earlier admissions. The defence based on alleged independent manufacture by M/s. Shri Govardhan Textiles, octroi and other purchase documents, electricity consumption, and the Chartered Engineer's certificate was rejected as belated or unsupported by reliable evidence.

Conclusion: The evidence was held sufficient to prove clandestine clearance and duty evasion, and the duty demand, interest and penalties were upheld against the appellants.

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