TaxTMI 
TaxTMI 
2013 (7) TMI 595
X X X X Extracts X X X X
X X X X Extracts X X X X
....d Shri Manish Kumar Jain, authorized signatory under Rule 209 A,. as proposed in the notice. Being aggrieved with that part of the impugned order vide which duty stand confirmed and penalty imposed; the appellants are in appeal and being aggrieved with that part of the impugned order vide which the Commissioner has dropped the demand and has not imposed penalties on Chairman and the authorized signatory as also on M/s. Rajratan Synthetics Ltd. under Section 11 AC, Revenue has filed the appeals. 2. We have heard Ms. Reena Khair, learned advocate appearing for the assessee and Shri Sanjay Jain, learned DR for the Revenue. 3. Briefly stated the facts of the case are that M/s. Rajratan Synthetics Ltd. are engaged in the manufacture of Polyester Partially oriented yarn (POY) falling under Chapter 54 of the Central Excise Act. Revenue, on receipt of an intelligence that the appellants are indulging in clandestine activities, visited their factory on 29.4.1997. Searches were also conducted in the office premises of said manufacturing unit as also the residential premises of the Chairman and the Director of the company, as also at various transporters premises, who were engaged in su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....were actually affected, without payment of duties and as such, the appellant is guilty of clandestine removal. Apart from the above, it was seen that the appellant was recovering extra amount ranging from Rs.4.50 per Kgs to Rs.7.00 per Kg. from their customers on account of freight insurance, loading etc. According to the Revenue, they under-valued their final product and recovered the value under the heading of other charges. 5. Based upon the said investigations, Revenue issued the show cause notice, proposing confirmation of demand on various ground. As already recorded the Commissioner dealt with each and every aspect and dropped the demands raised on all counts except confirming the demand in respect of five parallel invoices which were received by the Revenue along with intelligence report. 6. After appreciating the submissions made by both the sides and after going through the impugned orders, we find that major part of the demand of duty of Rs. 63,25,514/and of Rs. 42,99,390/were proposed to be confirmed against the appellant based upon the records seized from the premises of transporters, i.e. M/s. New Indore Kashmir Transport Co. and M/s. New Indore Kashmir Trans....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nst builty only and are always maintaining book register for recording order booking of vehicles etc. As Tribunal in the case of Kothari Pouches Ltd. vs. CCE, New Delhi reported as [2001 (135) ELT 531 (Tri-Del)] has held that confirmation of demand entirely on the basis of documents of the transporters, without any independent collaborating evidence cannot be upheld. The Tribunal further observed that in the absence of any questioning of the consignee of the goods about receipt of clandestine removal, confirmation of demand was not warranted. To the similar effect is another decision of the Tribunal in the case of Kothari Synthetics Industries Ltd. vs. CCE [2002 (141) ELT 558 (Tri) laying down that the entries made in the transport register of the Transporter company could not be accepted as exclusive proof of clandestine receipt of grey fabrics from the transporter company and thereafter removal of the same after processing, without payment of duty, for want of corroboration by any tangible evidence. In the case of M/s. Rhino Rubbers Pvt. Ltd. vs. CCE, Bangalore [1996 (85) ELT 260 (Tri) ] it was held that it is not safe to rely only on the third parties invoices where no link h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te generation should be around 7%, as examined in another factory of M/s. Shree Synthetics, Ujjain who were also engaged in manufacture of POY. The Commissioner while adjudicating the said issue has observed that Chairman as also the Managing Director of the Company attributed extra wastage to several reasons such as machines being old, power cuts and inexperienced workers etc. It is seen that they had also got their plant examined by one Shri S L Jain, M Tech FIE Chartered Engineer and approved valuer along with Shri P.P. Gaur, who had 27 year's experience with different POY units and it was reported by them that the excess wastage was on account of following facts: (i) In order to enhance the production capacity the Cam Shaft design was changed to in-corportate four spools of 85mm size. The result of this is that if there is breakage in even one spool the melt/filament for all spools get spoilt. Since the flow of melt cannot be stopped heavy wastage becomes unavoidable. (ii) Since the size of the spool is relatively smaller, frequent doffing (refilling) has to be undertaken. The time taken to change the spool (replace empty spool with filled spool) is about 15 min during wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... conducted at the premises of their customers showed that their records tallied with the clearances shown in the statutory records etc. 9. We find no infirmity in the above view of the adjudicating authority. Revenues case is solely based upon an assumption that wastage arisen during the course of manufacture of POY should not be more than 7% and as the appellants has recorded the wastage of around 16%, they must have cleared POY in the garb of extra wastage shown by them. It may be observed here that as correctly recorded by the adjudicating authority, there is not even any iota of evidence produced by the Revenue to confirm the above allegation. Entire case is based upon assumption and presumption and neither any documentary evidence has been seized by the Revenue nor any customer has agreed to have received POY under the garb of waste. Admittedly, the process adopted by one manufacturer for manufacture of POY as also the technology, the kind of machines used and the age of machine used would be relevant factors to decide the quantum of generation of waste. Excess waste may arise out of number of facts as detailed by the expert which stand un-rebutted by the Revenue. Such hig....