AI Drafter 
TaxTMI 
TaxTMI 
2014 (4) TMI 378
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..../2005 M/s. Shree Govind Synthetics Pvt. Limited. 193/3 & 4, Shahwadi Ranipur, Narol, Ahmedabad OIO. 34/Commr (Adjudication)/ 2005 dt 21.7.05 (iv) E/858/2006 Commissioner of Central Excise, Ahmedabad OIO. 34/Commr (Adjudication)/ 2005 dt 21.7.05 (v) E/819/2007 M/s. Rajesh Enterprises 193/3 & 4, Shahwadi Ranipur Patia, Narol, Ahmedabad OIA No. 143 & 144/2007 (Ahd-I) dt. 30.3.2007 (vi) E/819/2007 M/s. Rajesh Enterprises 193/3 & 4, Shahwadi Ranipur Patia, Narol, Ahmedabad OIA No. 143 & 144/2007 (Ahd-I) dt. 30.3.2007 2. Appeals mentioned at Sr. No. (i) to (iii) are filed by the appellants with respect to OIO No. 34/Commissioner (Adjudication)/2005 dated 21.7.2005 passed by Commissioner (Adjudication), Ahmedabad. Appeal at Sr. No. (iv) above is filed by the Revenue also with respect to the same OIO dated 21.7.2005 for not passing any orders on the interest payable and for not confirming the duty with respect to goods confiscated by Additional Commissioner under OIO No. 36/Addl Commr/2003 dated 29.08.2003. Appeals mentio....
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....ayank P. Aggarwal was correct. That Shri Hukum Singh V. Shekhawat (Manager of M/s. Gayatri Fabrics) also has confirmed in his cross-examination that his statement dated 24.04.2003 taken by HQ (Prev.) is correct. That statements recorded by DGCEI earlier were under duress, threat and pressure. That there are documentary evidences on record to show that M/s. Gayatri Fabrics purchased raw materials for hand screen printing. That there are also evidences on record that merchant manufacturers got their goods processed from M/s. Gayatri Fabrics during the relevant period. (iii) That no investigations were made with the merchant manufacturers, details of which were available with M/s. Shree Govind Synthetics to whom the orders were given, whether to M/s. Gayatri Fabrics or to M/s. Rajesh Enterprises. (iv) That no excess stock of finished goods or excess dyes/ chemicals etc. were found to exist in the registered premises of M/s. Rajesh Enterprises during searches. (v) That a separate paper book containing statements of Shri Prayank P. Aggarwal, Shri Hukum Singh Shekhawat, Shri Naimesh Patel (Manager of Shree Govind Synthetics) and five contractors engaged in hand processing for Ga....
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....tics. (xi) That in view of the following case laws a case of clandestine removal can not be based only on statements:- (a) Commissioner of Central Excise & Customs & Service Tax, vs. Vishwa Trades Pvt. Limited [2013 (287) ELT 243 (Guj.)] (b) Final order No. A/11207 to 11219/WZB/HAD/2013 dated 26.09.2013 (Para 40) in the case of Bajaj exports vs. CCE Ahmedabad -II. 5. Shri S.K. Mall (AR) appearing on behalf of the Revenue submitted that the following proceedings were initiated against the appellants from time to time:- S/No SCN No. & Date Period involved Issued by Proceedings of the case (i) INV/DGCEI/BRU/21/2002 dt. 18.03.2002. For confiscation of seized goods and to demand duty leviable thereon under Rule 173Q(1) of Central Excise Rules, 1944 read with Rule 25 of Central Excise Rules 2001 and imposition of penalty u/r 25 & 26 of Central Excise Rules, 2001 (OIO No. 36/A2003 Dt. 26.8.03) 1999-2000(25.8.1999 to 31.3.2000) and 2001-2002 (31.7.2001 to 19.09.2001) Value of seized goods : Rs. 4,54,416/- Amount of duty involved Rs. 84,277/- DGCEI, ZU, Ahme....
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....nalty of Rs. 50,000/- 5.1. Learned AR argued that case at Sr. No. (i) above was not pursued by the appellant and that case at Sr. No. (iv) above was settled by the appellants by approaching the Settlement Commission. That it is clear from the periods involved above and facts on record that both M/s. Gayatri Fabrics and M/s. Shivkaran Das Govindram never existed simultaneously at the same point of time and the same hand screen printing tables were either registered in the name of M/s. Gayatri Fabrics or M/s. Shivkarandas Govindram. That as per the statements of Shri Haroon Chippa owner of M/s. Malvika Fabrics and statement of Shri Hukumsingh Shekhawat, POA holder of M/s. Shivkarandas Govindram that a total of 26 hand printing tables were owned by M/s. Shivkarandas Govindram out of which 14 were rented out to M/s. Malvika Fabrics and balance 12 belonged to M/s. Shivkarandas Govindram. That even Hukumsingh Shekhawat POA holder of M/s. Gayatri Fabrics also stated at the relevant time that M/s. Gayatri Fabrics has not started any activities but was thinking of taking over the premises of M/s. Shivkarandas Govindram. That Prayank Agarwal of M/s. Rajesh Enterprise also admitt....
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....Limited (i) 1983 (13) ELT 1486 (SC) - Kanungo & Co. vs. CCE, Calcuta & Ors (j) 1997 (89) ELT 646 (SC) - Surjeet Singh Chhabra vs. UOI (k) 2010 (250) ELT 94 (Tri. Mum.) - Twenty First Century Wire Rods Limited vs. CCE & Cus. Goa. (l) 2008 (227) ELT 287 (Tri. Del.) - CCE, Ludhiana vs. Surya Ispat Udyog. 6. Heard both sides and perused the case records. In these proceedings the case of the Revenue is that appellant Rajesh Enterprises had clandestinely manufactured and cleared fabrics by machine printing in their factory premises but on paper the activities were shown as if these fabrics were hand screen printed at one M/s. Gayatri Fabrics which according to Revenue was a non-existing firm at the relevant time. Revenue has relied upon the seizure of goods at the factory premises of M/s. Shree Govind Synthetics (where exempted processes were done) and at the office premises of M/s. Deluxe Roadlines who were the transporters of the fabrics. Appellants have argued that M/s. Gayatri Fabrics was in fact existing at the relevant time as per the investigation done by the HQ Preventive of the jurisdictional Central Excise Commissionerate which has not been taken into account by ....
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.... statement was recorded by Shri J.V. Patel on 25.4.2003 and this statement is right. Q-4. The facts recorded in the statement dated 25.4.03 are correct or the facts recorded in three statements by DGCEI officers are correct. Ans. The statement recorded by the local preventive staff is correct and the statements recorded by DGCEI officers are not correct in fact. Q-5. Why did you sign three statements to DGCEI officers if they have not recorded correct facts? Ans. There was threat of arrest to me right from 2001 when the investigation by DGCEI commenced till the last statement of mine was recorded in the year 2003. 19.12. Shri Prayank Agarwal has also stated during cross examination that he had to sign statement prepared by the DGCEI officers as he was the only son, his father had expired and therefore, he was under a lot of tension during investigation by the DGCEI officers. 19.13. Shri Hukumsingh Shekhawat was also cross-examined on 26.4.2005 and he has also deposed as follows: Q-2. Is correct that your statement was also recorded by local preventive officers during this period for the same cas....
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....cs to M/s. Rajesh Enterprise or to M/s. Gayatri Processsors for processing the fabrics? Ans. Yes. There is no such investigation. 6.1 From the above facts the fairness of the statements recorded by the officers of the DGCEI during the investigations are questionable and it cannot be inferred that M/s. Gaytri Fabrics was not existing at the relevant time in the light of the conflicting statements. It is not coming out from the records as to at which stage the copies of written statements recorded during first investigation were given to the concerned persons, whether immediately on recording or along with the show cause notice. In the case of latter situation the only time when the evidences could be countered by the appellant was during adjudication proceedings. Further, it is not conclusively proved by the Revenue that quantity of hand screen printed fabrics shown against M/s. Gayatri Fabrics, as per the records maintained by M/s. Shree Govind Synthetics, were not printed on behalf of M/s. Gayatri Fabrics. It is not clear whether 50,000 to 60,000 L/M of fabrics per month was opined by Haroon Chippa of M/s. Malvika Hand Processors was from one Hand Screen printing table or al....
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.... which one could hold with activity that there have been clandestine manufacture and clearances, would not be possible. As held by this Tribunal and Superior Courts, it would depend on the facts of each case. What one could, however, say with some certainty is that inferences cannot be drawn about such clearances merely on the basis of note books or diaries privately maintained or on mere statements of some persons, may even be responsible officials of the manufacture or even of its Directors/ Partners who are not even permitted to be cross-examined, as in the present case, without one or more of the evidences referred to above being present. In fact, this Bench has considered some of the case-law on the subject in Centurian Laboratories vs. CCE, Vadodara, 20013 (293) ELT 689. It would appear that the decision, though rendered on 03.5.2013, was reported in the issue of ELT dated 29.7.2013, when the present case was being argued before us, perhaps, not available to the parties. However, we have, in that decision, applied the law, as laid down in the earlier cases, some of which now have been placed before us. The crux of the decision is that reliance on private/ internal records mai....