2002 (9) TMI 543

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....hemicals Ltd., along with the penalty and also imposed penalties on the other appellants of various amounts as detailed in the order itself. 2. M/s. Haryana Petrochemicals Ltd. (hereinafter referred to as 'HPL') is engaged in the manufacture of Polyester Yarn (non-textured) of different deniers and grades. The company during the period April 1994 to June 1995 clandestinely manufactured and cleared 3,82,962/- kgs of Polyester Yarn of different deniers and grades to M/s. Emmtex Synthetics Pvt. Ltd. While during the period January 1995 to June 1995, the company clandestinely cleared these very goods valued at Rs. 41,33,070/- to M/s. Globe Synthetics Ltd. (hereinafter referred to as "GSL"), appellants no. 2, without the cover of invoice....

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....payment of duty and similarly recipient company, GSL, also denied the receipt of the goods in a clandestine manner from the company, HPL, with the knowledge of having cleared by that company, without payment of duty. The Commissioner, however, did not accept the version of any of the appellants and passed the impugned order against them. 3. The learned counsel has contended that there is no reliable evidence on the record to prove that company, HPL, had indulged in the clandestine manufacture and removal of the goods, to the company, GSL. The impugned order had been passed only on assumptions and presumptions drawn from the inconclusive and inadmissible evidence. The statement of Shri B.M. Gupta, appellant, according to the learned ....

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....e heard both sides. 6. To substantiate the allegations of clandestine removal of 382962 kgs. of polyester yarn of different deniers and grades by the company, HPL, through the appellant, Shri Rajeev Agarwal, Joint Director and Shri Rakesh Gupta, to the company, GSL, appellant, main reliance has been placed on the diary and the loose sheets found from the office of Shri B.M. Gupta, the Vice-President of the company, HPL, and the statement made by him in respect of those entries. But the testimony of Shri B.M. Gupta, in our view, could not be attached any legal value. He, in his first statement no doubt stated about the clandestine manufacture and removal of the goods by the company, HPL, to the company, GSL, during the period January....

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.... we are fortified by the ratio of the law laid down in (1) Arsh Castings Pvt. Ltd, v. CCE - 1996 (81) E.L.T. 276; and Takshila Spinners v. CC. Chandigarh, 2001 (131) E.L.T. 568, wherein it has been observed that no reliance can be placed on the evidence of a witness who had not turned up for cross-examination during adjudication proceedings, especially when his evidence did not find corroboration from other evidence. That being so, the alleged entries in the diary and the loose documents, recovered from Shri B.M. Gupta, appellant, were inconclusive to bring home the allegations of clandestine manufacture and removal of the goods by the company, HPL, especially for want of corroboration from any other tangible evidence. In this context, refe....

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....hart and the diary recovered from Shri B.M. Gupta, as observed, were inconclusive and inadmissible to prove the clandestine manufacture from the polyester chips of polyester yarn and removal of the same without payment of duty by the company, HPL. 10. The company, GSL, had categorically denied the receipt of polyester yarn in a clandestine manner without invoices from the company, HPL. There is nothing on the record to suggest if any excess or unaccounted yarn was recovered from its factory premises. The entries in the diary and loose sheets of Shri B.M. Gupta regarding supply of the yarn to the company, GSL, could not be used and relied upon being the documents allegedly maintained by a third party and that too having no corroborat....