TaxTMI 
TaxTMI 
2014 (6) TMI 382
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....sp; (i) M/s Flex Industries Ltd., Malanpur (ii) M/s MSS Food Products, Indore (iii) M/s Shri Saibaba Transport Services, Gwalior (iv) M/s Pitambara Freight Carrier, Gwalior (v) M/s Hans Travels, Gwalior (vi) M/s Hans Travels, Indore. 3. On preliminary scrutiny of the records of M/s. Flex Industries Ltd., Malanpur, it was observed that there was regular production of Shimla brand laminates and outer pouches in their factory. However, M/s Flex Industries Ltd., Malanpur had issued invoices in the name of M/s MSS Food Products, Indore only in the month of June & September 2001. The sales orders lying in the factory did not show the details of brand names of laminates / pouches to be supplied to the customers. The officers further observed that M/s Flex Industries were not showing details of brand wise production in their records. Such details were also not available in Central Excise invoices. However, the uni....
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....hat he was not aware about their salesman who was reported to have sold the said goods subsequently at Jabalpur. 6. The officers also searched the office godown premises of M/s Shri Saibaba Transport Services, Gwalior, and resumed documents as also laminate bearing descriptions 'Shimla Gutkha Saffron Yukt' and 'Shimla Meethi Supari' bearing manufacturer's name M/s MSS Food Products. The statement of the authorized representatives was recorded. Similarly, the search of godown premises of M/s Pitambara Freight Carrier, Pinto park, Gwalior resulted in recovery of 148 boxes of laminates bearing the details of M/s MSS Food Products. The statement of their Manager was also recorded. The search the office premises of M/s MSS Hans Travels, Indore also resulted in recovery of 5 bags of Shimla Pan Masala/Shimla Mouth Freshner Statement of their manager Shri Nitin Gupta, was also recorded along with the statement of Shri Arvind Gupta. 7. On scrutiny of the records resumed from M/s MSS Hans Travels, it was revealed that there were signatures of the consignees representative in token of having received the goods. It was further found that even though the laminates were booked by M/s Flex ....
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....anufacturing the goods using their name. Further, to rebutt the opinions of the handwriting expert, they produced another report by Shri A.N. Ganorkar, a handwriting expert, who after examination of the signatures bearing in the transport documents and other documents with the admitted signature of the said persons, opined that the signature were actually forged and held that the signature were in fact not written but were crude formations of letter forms showing tremors of fraud, uneven line quality, uneven lining etc. They also contended that the allegation of clandestine removal cannot be upheld on the basis of packing material allegedly supplied by M/s Flex Industries Ltd., without their being any other evidence of record of show the procurement to the raw-materials. 11. The Commissioner considered the above submission of the appellant and dropped the allegation by observing as under: The demand of Rs. 43,48,552/- has been worked out on the basis of delivery of outer pouches to M/s MSS Foods. The officers had searched the office premises of M/s Hans travels, Gwalior and seized certain Pan Masala/Mout....
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....yees of the noticee viz. Shri Joshi and Upadhyay, the opinion of the Handwriting Expert Shri C.T. Sarwate was taken who had opined that the signatures on the receipts shown to him were of Shri Subhash Joshi and Shri Amarchand Upadhyaya. Shri Joshi and Upadhyaya have denied having received the materials, as already mentioned. Cross examination of Shri Sarwate, though allowed, could not take place in view of the demise of Shri Sarwate. The flow back of money to M/s Flex Industries has been attempted to be worked out on the basis of Bank Drafts adjusted against certain parties like M/s S. Miss Hill Enterprises, Pune, M/s Sarafat Ali & Co,. Shabnam Enterprise, Nasik etc. Payment from these parties were received through DD. Further investigations revealed that out of the 5 parties mentioned, Demand draft in respect of one party was purchased from Chatarpur branch, Madhya Pradesh by M/s Manoj Provision Stores and listed DD 2 to 5 purchased by Shri Shyam Behari Agrawal of S.B.. Traders Chhattarpur from their Account No. 50060. Shri Manoj Agarwal whose statement was taken as a measure of follow up deposed that he purchases Shimla Gutka and Shimla Pan Masala and Shimla mouth freshner fro....
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....nd investigated upon as against a huge amount of turnover. However, after the denial by Noticee No. 10 and production of evidence by the noticee in favour of manufacture of Gutkha/Pan masala in their name by M/s Shivam sales Corporation, Mauranipur, noticee's case becomes strong. From the above, it can be seen that the Departmental case basically proceeds on the following lines. There is no dispute that M/s Flex Industries Ltd. produced outer pouches of Shimla brand which were transported by M/s Hans Travels from Gwalior to Indore. For pressing this point, reliance has been placed on some documents recovered from the premises of M/s Hans Travels. Statement of Shri Arvind Gupta and statement of some other persons was recorded who mentioned that Shimlawale meant manufacturer of Shimla pan masala. Also to further press their point, the Department has alleged that goods at Indore were reveived by the employees of the noticee. This has been tried to be proved through the report of Hand writing expert late Shri C.T. Sarvate. There are too many gaps in this scenario. Firstly main reliance has been placed on the records found at the premises of M/s Hans Travels. However, no efforts have....
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....uted signatures belong to the same individual. This has not been done in the present case as there is absence of accountability for the admitted differences in the disputed signatures and the standard signatures. I tend to accept the contention of the Noticee that the said Hand writing Experts report cannot be relied upon in this case as the report of an expert has been countered by the report of another expert. After comparing both the opinions I observe that the opinion of Shri Ganorkar is much more methodical as compared to that of Shri C.T. Sarvate. Moreover, the report is very categorical in the case of Shri Ganorkar. Accordingly, I observe that this entire chain is not strong and contains a number of loopholes which have been challenged by the noticee. The basic evidence is entry of outer pouches in the record of M/s Flex Industries Ltd., which shows delivery of Shimla Brand outer pouches to 13 parties who were found to be fictitious. As regards the records of M/s Flex Industries, Shri A.P. Singh, Sr. Manager of M/s Flex Industries has categorically stated that they did not inquire into the bonafides of their customers and they print whatever has been ordered by their cus....
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....owed copies of Writs filed by them in various High courts in this regard. They have also given names of 3 manufacturers who are manufacturing duplicate Shimla Brand products. They also mentioned that Trade Mark Authorities, on their complaint, had also conducted a number of searches in this matter. They have relied upon the Affidavits dt. 10.2.2003 filed by Shri Ganesh Prasad Shivhare wherein it has been stated that they had purchased 'Shimla pan masala' of Batch No. KK and UU From M/s Shivam Sales Corporation. They contented that they never used these kinds of Batch Nos. in their products. In the absence of anything to the contrary adduced by the Department, I have no option but to accept the plea/defence of the noticee as mentioned above. It is indeed correct that duplicates of popular brands are being manufactured in a number of commodities. Moreover, the very starting point of the case i.e. the records of M/s Flex Industries indicates that the manufacturer is not supposed to go into the antecedents of the purchaser as this is not a requirement of the law. Accordingly, the Invoices under which the said outer pouches were cleared were as per the law and on payment of the duty lev....
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....y some correspondence on the day or very next day of purchase of the Demand Draft. However, from Jabalpur the trace simply vanishes. Some payments indeed have been made by M/s S.B. Traders and by M/s Manoj Provision Stores in the name of M/s Flex Industries but they were supposed to have been issued on the basis of the instructions received from M/s Shree Ganesh Sugandhi Bhandar, Jabalpur. No communication whatsoever between M/s MSS Food Products and M/s Shree Ganesh Sugandhi Bhandar, Jabalpur has been brought on record and inspite of detailed investigations, the Department has not come to prove any link between M/s MSS Food Products and M/s Shree Ganesh Sugandhi Bhandar, or any other party which had issued any Demand Draft or any other payment in favour of M/s Flex Industries in lieu of purchase of pan masala/gutkha supposed to have been manufactured and cleared clandestinely by the noticee. Accordingly, there is no financial link which could be established by the department. Accordingly, there does not appear to be any challengeable evidence worth mention against the Noticee No.1. On the other hand the Noticee has cited a number of judgments in support of their contentions. ....
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....on the consignees name on the invoices but on a code-word mentioned on the boxes. (e) It was also found that M/s Flex Industries Ltd., Malanpur, cleared 1,17,100 nos. of outer pouches of Shimla Pan Masala 2 in-1 in the name of M/s Sarasti & Sons, Akola; 1,76,800 no. of outer pouches of Shimla Pan Masala in the name of M/s Sukhram Traders, Nashik; 3,77,600 nos of outer pouches of Shimla Mouth Freshner (20 gms) in the name of M/s Salil Enterprises, Pune; and 52,000 nos. of outer pouches in the name of M/s Mohit Enterprises Amravati. The consignments of Shimla Branded pre-printed laminates/pouches which have been cleared by M/s Flex Industries Ltd., Malanpur, in the name of M/s Sarasati & Sons, Akola; M/s Sukhram Traders, Nasik and M/s Susheela Traders, Nashik, M/s Salil Enterprises, Pune, M/s Mohit enterprises, Amravati were transported by M/s Hans travels, Gwalior and as per the statement of Manager of Hans Travels these were delivered at Indore only. (f) On verification, all the above parties namely M/s Sarasti & Sons, Akola, M/s Sukhram Traders, Nashik and M/s Susheela Traders, Nashik, M/s. Salil Enterprises, Pune, M/s. Mohit Enterprises, Amravati, in the name of which M/s.....
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....nates cleared by them was made to the employees of the party at Indore clearly established that the laminates were meant for M/s MSS Food and were also received by them. (k) It was also found that M/s. Flex Industries Noida had credited certain amounts received through DDs in the name of fictitious parties to whom Shimla brand pouches had been cleared namely S. Miss Hill Enterprises, Pune, M/s. Sarafat Ali & Co., Pune, M/s. Shabnam Enterprises Nashik and M/s Sarath Enterprises Nashik. On conduct of further enquiries, Bank of Baroda, Service Branch New Delhi vide their letter NO. BR/SERDEL/HODD/70 dated 21.02.2002 informed that Rs. 80000/- credited by M/s Flex Industries against the name of M/s S. Miss Hill Enterprises Pune, was purchased from their Chhatarpur Branch by one M/s Manoj Provision Stores Chhatarpur from their account no. 1388 and the DD amounting to Rs. 50000/-, Rs.50000/-, Rs. 75000/- and Rs.80000/- credited by M/s. Flex Industries in the names of M/s. Sarafat Ali & Co., Pune, M/s Shabnam Enterprises Nashik and Sarath Enterprises Nashik were purchased by Shri Shyam Behari Agrawal of M/s SB Traders Chhatarpur from their account no. 50060. (l) In the statement reco....
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....ement admitted that he had purchased Shimla Pan Masala/Gutkha and Mouth Freshener from a salesman of the party without any bills. The pan masala and mouth freshener, which were found in the premises of Manoj Provision Store Chhatarpur, was the same as was found in the premises of Shri Ganesh Sugandhi Bhandar Jabalpur as was evident from the batch numbers appearing on the products. (p) The demand drafts, got issued by M/s Manoj Provisions Stores, Chhatarpur and M/s SB Traders Chhatarpur, were found to have been credited by M/s Flex Industries in the names of fictitious firms namely M/s. S. Miss Hill Enterprises, Pune, M/s Sarafat Ali & Co., Pune, M/s. Shabnam Enterprises, Nashik, and M/s. Sarath Enterprises Nashik to whom M/s Flex Industries had issued invoices for the laminates. Thus it was on record that the party received Shimla brand laminates/pouches for manufacture of Shimla pan masala which had been removed from M/s. Flex Industries in fictitious names. The said laminates / pouches had been used for clandestine manufacture and clearance pan masala, Gutkha and mouth freshener etc. and that payment for such supply of laminates/pouches had been adjusted by M/s. Flex Industrie....
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....of records of the packing material supplier M/s Flex Industries Limited. Commissioner has considered the said evidences produced on record by the revenue and come to a conclusion that the same are not sufficient evidences for holding the charges against the respondent. 16. The Revenue in their memo of appeal have reiterated the same very evidences which were referred to in the show cause notice. It is seen that Shri Anil Sharma, AGM (Commercial) of M/s Flex Industries, in his statement has admitted that the packing material printed in the name of Shimla was also being sold by them to the other parties. According to the Revenue the other persons, to whom the said packing material was being sent were fictitious and the packing material was, in fact, was being received by the appellant. For the above purposes, they have also relied upon the handwriting expert opinion of Shri Sarwate, in respect of signatures of the two employees of the respondent appearing on the transport documents It is however not cross- was examined on account of his death. As against the above, the respondent have produced an opinion from another handwriting expert Shri Ganorkar, which is contrary to the reven....
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....y relied upon various decision to hold that such charges are to be proved out of positive and tangible evidences and not on the basis of certain doubts, which may arise against the assessee. 20. We further note that apart from the above, revenue has not referred to any procurement of raw materials etc. in a clandestine manner. Admittedly, for manufacture of such huge quantity of the final product, the raw materials are required. There is not even any iota of evidence on record to reflect upon such procurement of raw material. As such, we are of the view that the revenue has failed miserably to hold against the respondent and to establish the charges of clandestine removal made against them. Nothing incriminating was recovered from the assessees factory at the time of their searches of the factory premises or go-down etc. The stock of pre-printed laminated fully tallied with the declared stock in the statutory records. 21. We also note that all the statement of the respondent's authorised representative are exculpatory in nature and there is no admission in any of the statement regarding their clandestine activities. The respondent have referred to various decisions of the Tr....
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....tes/pouches were bearing the brand name Shimla and delivery took place in Indore only, it is difficult to believe that these were not received by M/s MSS Foods Pvt. Ltd particularly in view of the statement of Shri Nitesh Wadhwani wherein he stated that there was no other unit except M/s MSS Foods Sanwar Road Indore who manufacture Shimla brand products. The receipt of such laminates/pouches by M/s MSS Foods clearly indicates the same were used in clandestine removal of Shimla brand products. 4. On scrutiny of delivery records of M/s Hans Travels, it was noticed that receipt of the consignments was acknowledged by some representative of 'Shimlawale at Indore'. Shri Arvind Gupta, Manager of M/s Hans Travels in his statement has stated that 'Shimlawale' were not other than manufacturers of Shimla brand Pan Masala of M/s MSS Food Products Indore. The Commissioner in his order has observed that Shri Arvind Gupta was the person managing the vehicles only. The Commissioner has stated that Mr Arun Gupta was the person knowing the working of M/s Hans Travels and Shri Arun Gupta in his statement has stated that M/s MSS Foods never took up the packets from M/s Hans Travels. I do not agree....
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....aking payment for such pan masala in the form of demand draft in the name of M/s Flex Industries Similarly, Shyam Bihari Aggarwal of Shyam Bihari Traders also stated that payments of Pan masala/gutka purchased from Ganesh Sugandhi Bhandar in the form of demand drafts in the name of M/s Flex Industries. 7. Further the receipt book of the courier shows that the letters were in fact dispatched by these traders to Ganesh Sugandhi Bhandar on the same/next date on which the DD was drawn. Also during the search of premises of Ganesh Sugandhi Bhandar there was seizure of Pan Masala and Shimla Gutka as these goods were without any duty paying documents. These activities indicate that Shimla brand laminates/ pouches issued in the name of non-existent firms/companies were in fact going to appellant M/s MSS Food Products clandestinely to be used in the clandestine removal of the pan Masala/Gutka and the payment in respect of these laminates/pouches was being received by M/s Flex Industries through DD. This arrangement was made between the appellant and M/s Flex Industries just to evade the payment of Central Excise duty. 11. In view of the above, I am of the view that impugned order in o....
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....mises of the Respondent. 1.1.2 In the premises of M/s. Flex, some documents were found which showed that the outer pouches meant for packing of the products of the Respondent, in addition to being sold to them, were also being sold and despatched by M/s. Flex to a number of parties other than the Respondent. In this regard, when the inquiry was made with officials of M/s. Flex, they admitted that the outer pouches for packing of Gutkha/Pan Masala and Mouth Freshner of 'Shimla' & 'Vansh' brand of the Respondent, were also being sold to parties other than Respondent. 1.1.3 In course of search at the premises of Transporters, boxes containing plastic outer pouches meant for packing of retail pouches of 'Shimla' & 'Vansh' brand of the Gutkha/Pan Masala and Mouth Freshner of the Respondent were recovered. These consignments despatched by M/s. Flex were consigned to the parties other than the Respondents. However on inquiry, the consignees of those consignments were found to be fictitious and non-existent. In this regard, the records of M/s. Hans Travels, Indore indicated that during the period from Oct.'2001 to Dec.'2001, 117100 nos. of outer pouches for Shimla Pan Masala 2-in-1, ....
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....er dt. 19.04.02 gave his opinion that signatures on the luggage delivery sheets recovered from M/s. Hans Travels are, indeed, of Sh. Subhash Joshi and Sh. Amar Chand Upadhyay of the Respondents. However on inquiry, Sh. Subhash Joshi and Sh. Amar Chand Upadhyay of the Respondent Company denied having taken delivery of the consignments of outer pouches in question, claiming that their signatures have been forged by somebody. However on the basis of hand writing expert's opinion and statement of Sh. Arvind Gupta of M/s. Hans Travels, the Investigating Officers were of the view that the outer pouches booked by M/s Flex in the name of M/s. Sarasati & Sons, Akola; M/s. Sukhram Traders, Nashik; M/s. Salil Enterprises, Pune & M/s. Mohit Enterprises, Amravati through M/s. Hans Travels had actually been received by the Respondent and used in the manufacture of un-accounted Gutkha/Pan Masala and Mouth Freshner involving duty of Rs.43,48,552/- which had been cleared clandestinely. 1.2 It was also found that there was evidence from which it appeared that payments for the outer pouches being received by the Respondent from M/s. Flex Industries Ltd., in the name of fictitious parties were bein....
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....M/s. Hans Travels, Gwalior respectively and also for imposition of penalty on the Respondent under section 11AC. Besides this, the Show Cause Notice also sought imposition of penalty of other parties including transporters etc. under Rule 209A of the Central Excise Rules, 1944/Rule 26 of Central Excise Rules, 2001. 1.6 The above Show Cause Notice was adjudicated by Commissioner vide order-in-original dt.11.02.04 by which he dropped the proceedings against all the noticees including the Respondent Company. This order of the Commissioner was reviewed by the Board and in this regard the Board vide Order dt. 17.02.07 under Section 35E(1) of the Central Excise Act, 1944, directed the Commissioner to filed an appeal to the Tribunal for correct determination of the points mentioned therein. 1.7 In pursuance of the order of the Board, Commissioner filed this appeal before the Tribunal. After hearing of this matter by the Tribunal on 08.01.2013, while Hon'ble Member (J) upheld the impugned order of the Commissioner holding that there is no infirmity in it, Hon'ble Member (T) in a separate order, ordered for allowing the Revenues appeal. The point of difference which has been referred....
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....on Stores, Chhatarpur and M/s. S.B.Traders, Chhatarpur, payable to M/s. Flex Industries Ltd., Malanpur. These demand drafts payable to M/s.Flex had been purchased by M/s. Manoj Provision Stores and M/s. S.B.Traders on the instructions of M/s. Shree Ganesh Sugandhi Bhandar, Jabalpur, who was dealing in Shimla Brand Gutkha and pan Masala purchased from the Respondent, and had been sent to M/s. Flex, who had credited these demand drafts in the sales account of the outer pouches for Shimla brand Gutkha/Pan Masala & Mouth Freshner made to fictitious buyers. The Commissioner has wrongly rejected this complete chain on the ground that no communication or linkage has been established between M/s. Shree Ganesh Sugandhi Bhandar, Jabalpur and M/s. Flex. In this regard the Commissioner has wrongly ignored facts that:- (i) five demand drafts, in question, which had been credited by M/s Flex Industries in the account of fictitious parties in whose name the pouches of Shimla brand Gutkha/Pan Masala & Mouth Freshner had been cleared, had been purchased from the Bank by two dealers namely M/s. Manoj Provisional Stores, Chattarpur and M/s. SB Traders, Ch....
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....tion have been wrongly dropped by the commissioner. 4 Sh. Ramesh Nair, Advocate, the ld. Counsel for the Respondent Company, defended the impugned order and made the following submissions:- (a) At the time of search of Respondent's factory premises, neither any irregularity in the stock of raw-material or finished goods was detected nor any incriminating documents showing receipt of un-accounted raw-material or clandestine clearance of finished products were recovered. The entire allegation of duty evasion against the Respondent is based only on alleged supply of outer pouches for packing of Gutkha/Pan Masala & Mouth Freshner by M/s. Flex Industries Ltd.,Malanpur, to the Respondent in the name of fictitious parties. (b) M/s. Flex for supply of outer pouches were using three transporters i.e. M/s. Saibaba Transport Services, Gwalior, M/s. Pitambara Freight Carrier, Gwalior, M/s. Hans Travels, Indore/Gwalior. The statement of Sh. B.S.Sharma proprietor of M/s. Saibaba Transport Services and the statement of Sh. Bal Krishan Sahu, Manager of M/s. Pitambara Freight Carrier, Gwalior, does not implicate the Respondents in any manner. In fact the officials of M/s. Flex have stated ....
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....rd the Department relies upon the fact that M/s. Manoj Provision Stores, Chattarpur and & M/s. S.B. Traders, Chattarpur had purchased demand drafts from banks payable to M/s. Flex, though they had not purchased anything from M/s. Flex, but had purchased Shimla brand Gutkha/Pan Masala & Mouth Freshner from M/s. Shree Ganesh Sugandhi Bhandar, Jabalpur and on being questioned in this regard, both these traders have stated that they had purchased the demand draft payable to M/s. Flex on the instructions of Sh. Ganesh Shivhare of M/s. Shree Ganesh Sugandhi Bhandar, Jabalpur from whom Shimla brand Gutkha/Pan Masala & Mouth Freshner had been purchased by them. However, this does not constitute evidence of flow of funds from the Respondent to M/s. Flex as, firstly, Sh. Ganesh Shivhare of M/s. Shree Ganesh Sugandhi Bhandar has denied having given any such instructions to M/s. Manoj Provision Stores and M/s. S.B.Traders and secondly, there is no evidence to link M/s. Shree Ganesh Sugandhi Bhandar with the Respondent in respect of the payments made by M/s. Manoj Provision Stores and M/s. S.B.Traders to M/s. Flex Industries Ltd. by demand drafts. These payments may be on the instructions of ot....
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....s Ltd. out of which according to the Department, except for 21,800 outer pouches for Shimla Gutkha, the remaining quantity has been used for manufacture of un-accounted Gutkha/Pan Masala which had been cleared clandestinely without payment of duty. This duty demand is also without any basis, as all these outer pouches have been used by the Respondent in the packing of Gutkha, pan Masala & mouth freshener which had been cleared on payment of duty. (i) The Shimla brand Gutkha, Pan Masala and Mouth Freshner seized from the premises of M/s Shree Ganesh Sugandhi Bhandar, had been purchased by them from M/s. Shivam Sales Corporation under their invoices no. SSC/668 dt. 12.12.01 and a perusal of the invoices shows that the batch number of the goods as KK and UU, while the Respondent, during the period from April 2000 to March03 have used the batch No.MM, MM1, MM3, MM4, MM5, MM6, MM7, MM8 & MM9 on their products and this shows that the goods seized from M/s. Shree Ganesh Sugandhi Bhandar, had not been manufactured by the Respondent but were duplicate goods. As regards M/s. Shivam Sales Corporation, Mauranipaur, they were manufacturing Gutkha & Pan Masala and by un-authorisedly using....
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....nterprises, Pune & M/s. Mohit Enterprises, Amravati; M/s. S. Miss Hill Enterprises, Pune; M/s. Sarafat Ali & Co., Pune; M/s. Shabnam Enterprises Nashik; M/s. Sarath Enterprises, Nashik; M/s. K.K.Traders, Delhi; M/s. Twin Star Sales Corporation, Rajkot; M/s. TRJ Sales, Gaya; M/s. Full Fun Enterprises, Patna & M/s. Harkishanlal & Sons, Ranchi, the duty demand of Rs. 43,48,552/- in this case is based only on the supply of outer pouches by M/s. Flex to M/s. Sarasati & Sons, Akola; M/s. Sukhram Traders, Nashik; M/s. Salil Enterprises, Pune & M/s. Mohit Enterprises, Amravati through M/s. Hans Travels, as according to the Department, the outer pouches despatched in the name of these parties through M/s. Hans Travels have actually been received by the Respondent Company and have been used in the manufacture of finished products which had been cleared clandestinely without payment of duty. In this regard the main evidence relied upon by the Department is as under:- (a) statement dt. 25.01.02 of Sh. Arvind Gupta, Manager of M/s. Hans Travels, Indore wherein he, after examining certain documents luggage delivery sheets of M/s. Hans Travels, stated that the goods booked by M/s. Flex i....
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....cturer of Shimla brand Gutkha and pan Masala, does not specifically name the Respondent Company or its employees. The Respondent have pleaded that during the period of dispute, there were a number of other persons who also manufactured Pan Masala and Gutkha by un-authorisedly using the brand name of the Respondent and in this regard several complaints with the police had been filed and a notice had also been issue to M/s. Flex Industries Ltd. This plea of the Respondent discussed in para 72 of the impugned order has not been refuted by the Department. Moreover, there are also News Papers reports regarding un-authorized manufacture of Shimla brand Gutkha/Pan Masala by the persons other than the Respondent by un-authorisedly using their brand name. In view of these facts, the possibility of the outer pouches meant for packing of Shimla brand Gutkha and Pan Masala & Mouth Freshner manufactured by the Respondent, which had been despatched by M/s.Flex to persons other than the Respondent, having been received and used by other un-authorized manufacturers of Gutkha/Pan Masala using the Respondents brand name un-authorisedly cannot be ruled out. Therefore, the statement of Sh. Arvind Gup....
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....he question as to what is the evidentiary value of the opinion of Sh. C.T.Sarwate and whether on the basis of the opinion of the Govt. handwriting expert Sh. C.T.Sarwate, it can be concluded that the consignments of outer pouches, in question, despatched through M/s. Hans Travels in the name of M/s. Sarasati & Sons, M/s. Sukhram Traders, M/s. Salil Enterprises and M/s. Mohit Enterprises had been received by Sh. Subhash Joshi and Sh. A.C.Upadhyay, the employees of the Respondent company on their behalf. 6.3.2 The proof by identification of handwriting or signature can be:- (a) by examining the persons, who are conversant with the handwriting and signatures of the person; or (b) by means of direct evidence i.e. on the basis of evidence of the persons who are said to be present at the time of writing of the disputed handwriting/signatures; or (c) by means of comparison of handwriting/signatures by the Court itself Under Section 73 of the Indian Evidence Act, 1872; or (d) by admission of the person concerned owning up the handwriting/signatures as his handwriting or signatures; or (e) by testimony of an expert competent to make the comparison of handwriting or signatu....
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....ross examination is not admissible in evidence. Apex Court in case of Ramesh Chandra Agrawal Vs. Regency Hospital Ltd., reported in 2009(9) SCC-769, has relying upon its earlier judgment in case of state of Maharashtra Vs. Damu S/o Gopinath Shinde & others, reported in AIR 2999 SC-1691, held that without examining the expert as a witness in court, no reliance can be placed on his opinion. 6.3.3 From the judgments of the Apex Court and various high courts as discussed above, it is clear that consistent view of the courts with regard to opinion of handwriting expert has been that:- (a) it is generally not a substantive evidence and is rather a weak evidence, which can only be used for the purpose of corroboration; (b) when there are divergent opinion of two experts in respect of same handwriting or signature, the same can be ignored; and (c) the opinion of an expert when he is not called as witness and subjected to cross examination, is inadmissible in evidence. 6.3.4 In this case, the allegation against the Respondent Company is sought to be proved by the opinion of the handwriting expert Sh. C.T. Sarwate, as Sh. Arvind Gupta of M/s. Hans Travels has not named Sh. Sub....
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..... S.B. Traders cannot be linked to the Respondent. Thus the Departments allegation that payment for purchase of outer pouches from M/s. Flex Industries in the name of fictitious parties was being arranged by the Respondent through M/s. Shree Ganesh Sugandhi Bhandar, M/s. Manoj Provision Stores & M/s. S.B.Traders remains un-substantiated. 6.5 When as discussed above, the allegation of un-accounted receipt of outer pouches for packing of retail pouches of Gutkha, Pan Masala and Mouth Freshner cannot be upheld, the presumption of un-accounted manufacture of retail pouches of Gutkha, Pan Masala and Mouth Freshner and their clearance without payment of duty, cannot be made and as such, the duty demand against the Respondent cannot be upheld. 6.6 Thus, the evidence of record is not sufficient to uphold duty demand of Rs. 43,48,552/-. 7. As regards the duty demand on the goods valued at Rs. 54,720/- bearing Shimla brand seized from M/s. Hans Travels, Gwalior and their confiscation, the proceedings for the same have been rightly dropped as:- (a) There is no evidence to prove that the goods had indeed been manufactured by the Respondent and in this regard it has not been ascert....
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....ure and there was no production of 2-in-1 Shimla Pan Masala during Sept.'01 to Dec.01 period. On this basis it has been alleged in para 34 of the Show Cause Notice that 58200 outer pouches of Shimla Gutkha and 16000 outer pouches of 2-in-1 Shimla Pan Masala, have been used in the manufacture of Shimla Gutkha and Shimla 2-in-1 Pan Masala which had been cleared clandestinely without payment of duty and duty involved on these clearances is Rs.13,50,400/-. 8.1 The Respondent Companys contention is that they had received 13,500/- outer pouches for Re.1/- MRP Mouth Freshner in June 2001, 48000 outer pouches for Shimla Gutkha of MRP Re. 1/-, 20,000 outer pouches for Shimla Pan Masala, MRP Re. 1/- and 20,000 outer pouches for Shimla 2-in-1 Pan Masala, in Aug.'01 and 40,000 outer pouches for Shimla Mouth Freshner in Sept.'01 and that all these outer pouches have been used in the packing of the retail pouches of Mouth Freshner, Shimla Gutkha, Shimla Pan Masala and Shimla 2-in-1 Pan Masala manufactured by them, which had been cleared on payment of duty and whose production and clearance are duly accounted for in the accounts maintained by the Respondent. 8.2 The basis of duty deman....
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....of the Commissioner, while in order recorded by Member (Technical), this point has not been dealt with, though he has ordered for allowing of department's appeal or in other words, confirming the entire duty demand, as made in the Show Cause Notice. 8.4 Outer pouches are used for packing of 40, 50 or 100 retail pouches of Gutkha, Pan Masala and Mouth Freshner and are one of the principal raw-materials. In my view, on the basis of concrete evidence of un-accounted receipt of any one of the principal raw-materials like Supari, Kattha, tobacco, plastic laminate or outer pouches by a Gutkha and Pan Masala manufacturer or on the basis of failure of the manufactures to account of the raw-materials which, admittedly, had been received, a presumption of fact, can be made under section 114 of the Indian Evidence Act that the un-accounted raw-material had been used in the un-accounted manufacture of excisable goods cleared clandestinely without payment of duty, which would shift the burden of proof to the Assessee and unless the assessee produces evidence to prove that there was no un-accounted receipt of raw-material or there was no un-accounted consumption of the raw-material which, adm....