2005 (8) TMI 592

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....25,00,000/- imposed on the Director. 2. The Company is engaged in the manufacture of commercial plywood, block board, flush doors and panel doors. During the period in dispute 1995-96 to 1998-99, that panel doors were exempt from payment of duty. The duty demand of the above said amount, had been confirmed against the company, on the ground that during the period in dispute, it has cleared, commercial ply block board and flush doors, in the guise of panel doors, to various dealers/traders. For substantiating this ground, reliance has been placed by the revenue, on the testimony of five traders namely; (i) Shri Rakesh Sharma, Prop. of M/s. Chirag Industries (ii) Shri Pramod Agarwal, Prop. of M/s. Goyal Plywood Traders (iii) Shri S.L.....

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....material received by the company, there could be no manufacture of the panel doors and if there had been, during the period in dispute, the company was liable to discharge duty on the intermediate product i.e. plywood manufactured and captively used in the production of panel doors and since no duty was paid, it should be presumed that there was no manufacture of panel doors. But we are unable to accept his contention. We find from record that from the core veneers purchased from the market, the company manufactured firstly plywood and that plywood was used as input by it, for the manufacture of panel doors. The non-maintenance of proper record about the movement and utilization of the plywood, in or in relation to the manufacture of panel ....

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....d not even turn up for cross-examination, for testing the veracity of their statements. They also did not produce any document or copies of entries in the books to corroborate their statements, that they did not purchase panel doors, as recorded in their invoices, but purchased block board, commercial ply etc. There is also nothing on record to suggest if the officer carried out verification of stock of the goods in their premises, to ascertain if the panel doors were in their stock at that time or not. Under these circumstances, their statements did not carry any legal value. Shri Raghubir Singh trader in his statement has accepted the purchase of panel doors from the appellant-company. Therefore, his testimony did not advance the case of ....