TaxTMI 
TaxTMI 
2010 (4) TMI 822
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....ther the Hon'ble CESTAT is justified in observing that the assessee, partners of M/s. A.S. Corporation, Ahmedabad, supplier of bogus bills/invoices who in fact are either involved in the act of evasion of duty or in any ether manner abetted in evasion of duty and who are guilty and liable to penalty, are innocent in view of facts and modus operandi adopted by the assessee in connivance with M/s. A.S. Corporation? 2. The facts of the case stated briefly are that M/s. Sulekhram Steels Private Limited (hereinafter referred to as 'Sulekhram') is engaged in the manufacture of TMT Bars and holds central excise registration. On the basis of intelligence to the effect that the unit was indulging in evasion of duty by way of clearing finished goods i.e. TMT Bars to its dealer M/s. A.S. Corporation, Ahmedabad, and the said dealer was simultaneously procuring bogus bills from other dealers in respect of such illicit goods so as to settle their books of account for such illicit transactions, the officers of the Central Excise (Prevention), Ahmedabad conducted simultaneous searches on 21st September, 2004 at the premises of Sulekhram, residence of Ms. Satyabhama, Sales Executive of Sulekh....
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....he impugned order of the Tribunal, the Tribunal has examined the various issues considered by the Commissioner individually. As regards the issue or clandestine removal, the Tribunal found that the case of the Revenue was based upon evidence collected during the course of investigation, which indicated that M/s. A.S. Corporation had procured fictitious bills from various traders and sold goods to various buyers. Thus, as such, the case of the Revenue revolved around the activities of M/s. A.S. Corporation. The Tribunal noted that M/s. A.S. Corporation had rebutted the statement made by various traders/brokers that the goods were never supplied to them and had always maintained that the goods in question had been purchased by them from traders to whom payments were made by cheques. Investigation revealed that some of the traders were also registered with the Sales Tax Department. The Tribunal was, accordingly, of the view that merely because the registrations of some of the traders were cancelled subsequently, was no ground to assume that they were bogus. The Tribunal further noted that M/s. A.S. Corporation and Sulekhram had requested to cross-examine the traders as well as the bro....
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....ent of goods by M/s. A.S. Corporation, demand of duty could not be confirmed against Sulekhram on the basis that the goods supplied by M/s. A.S. corporation bear the trade name of SULEKHRAM. The Tribunal also noted that all the buyers had stated that they had purchased the goods from M/s. A.S. Corporation to whom payment was made by cheques or demand draft and not a single buyer had stated that he had purchased the goods from Sulekhram. 9. The Tribunal further noted that the Commissioner had, for the purpose of deciding the issue as to from where M/s. A.S. Corporation had procured TMT Bars bearing mark of "SULEKHRAM" embossed on them, placed reliance upon trip registers maintained by transporters as well as statements of transporters indicating that the goods were being lifted from the factory of Sulekhram. The Tribunal upon examination of the trip registers found as a matter of fact that except entries in three places, the trip registers did not indicate that the goods were actually loaded from the premises of Sulekhram. That in fact, no trip registers were available in most cases, and those that were available did not indicate that the goods were loaded at the factory of Su....
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....s regards procurement of such a huge quantity of raw material by Sulekhram so as to manufacture the goods clandestinely and remove the same without payment of duty- No record showing any extra payment to labourers had been placed on record. Revenue had not made any investigation as regards the consumption of electricity. According to the Tribunal, if goods worth about Rs. 8 crores had been manufactured and cleared by Sulekhram without payment of duty, the same would require procurement of raw material, extra working hours of the factory, electricity consumption, payment of labour charges, payment of transportation bills etc. That the Revenue had not investigated any of the said factors and the entire case was based upon the statement of the traders and buyers of M/s. A.S. Corporation. The Tribunal noted that M/s. A.S. Corporation had nowhere admitted that it had purchased the goods from Sulekhram without payment of duty nor was there any statement of any representative of Sulekhram admitting having cleared the huge quantum of goods without payment of duty. The Tribunal was accordingly of the view that there was no sufficient material on record to establish clandestine removal and c....
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....he Tribunal was, therefore, justified in holding that the statements of such traders and brokers were not admissible in evidence, as they had not been tested on the touchstone of cross-examination. It is apparent that the entire case of the Revenue is based upon the statements of traders and brokers who have stated that M/s. A.S. Corporation had procured fictitious bills from them and sold goods to their buyers as well as statements of transporters who have stated that they had lifted the goods from the factory of Sulekhram. M/s. A.S. Corporation had rebutted the statements of traders and brokers and no Director or employee of Sulekhram has admitted clandestine manufacture and removal of goods. Morever, the respondents have not been permitted to cross-examine the traders and brokers despite specific request having been made in this regard, thereby rendering the statements of such witnesses inadmissible in evidence. Insofar as the statements of transporters are concerned, the Tribunal upon scrutiny of the trip registers has found that the same do not support the case of the appellant that the goods were actually loaded from the premises of Sulekhram. The Tribunal has also found that....