Retraction of statements and lack of corroboration defeated duty demand over alleged power-based manufacture of detergent cakes.

Duty, penalty and confiscation for alleged manufacture of detergent cakes with the aid of power were not sustainable where the Department relied mainly on statements of the partner and employees that were promptly retracted as having been made under duress. Those statements did not establish power-based manufacture throughout the relevant period, and the assessee's material suggested the motor was used only for a trial run, the plodder was not suited to regular power-driven production, and electricity consumption was not properly correlated with the alleged output. In the absence of adequate investigation and independent corroboration, the charge failed and the assessee succeeded.

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Issues: Whether the demand of duty, penalty and confiscation were sustainable on the basis that detergent cakes were manufactured with the aid of power during the relevant period.

Analysis: The material relied on by the Department consisted mainly of statements of the partner and some employees, but those statements did not specifically establish manufacture with power from the entire relevant period. The statements were retracted within a short time on the ground of duress. The appellants also produced material suggesting that the motor was used only for a trial run, that the plodder machine was not suitable for regular power-driven manufacture, and that the electricity consumption figures were not properly examined to correlate power use with the alleged production. In the absence of adequate investigation and independent corroboration, the retracted statements alone were insufficient to sustain the charge.

Conclusion: The demand of duty, the penalty and the confiscation were not sustainable and the appeal succeeded in favour of the assessee.

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