TaxTMI 
TaxTMI 
2015 (6) TMI 46
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....r delivery at M/s. Sindu Cotton Mills, (herein after SCM), Erode. The said fabrics valued at Rs. 2,49,059/-were seized on the reasonable belief that the same were processed and cleared clandestinely without payment of duty and without central excise documents by the respondent and the van was also seized. Officers conducted series of follow up actions and recorded statements from Shri C. Manikandan, an employee of the respondent company and also visited the respondent unit on the same day and verified the records and clearance of fabrics and delivery challans on 06.03.2001 in the presence of Shri S. Rajasekaran, Managing Partner of the respondent company and recorded his statement and found that respondent not accounted in their production register not raised any invoices for clearance of the goods seized in Transit. He admitted that SCM required the fabrics urgently and Shri C. Manikandan, staff of their company, without their knowledge taken the fabrics and agreed pay the duty on the seized goods. Further, statement was recorded from Shri S. Rajasekaran on 16.04.2001 and 21.06.2001 wherein he has deposed that as the processing charges are low they could not pay the central excise....
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....by the respondent unit without accounting and cleared without documents and without payment of duty. Shri P. Murugesan, in his statement clearly deposed that they used to pay job charges @ Rs. 8 to 10 per mtr. for dying and @ Rs. 6 for bleaching to the respondent, when they raise bills but they used to pay only Rs. @3.50 for dying and Rs. 2.40 per mtr. for bleaching without bills. He also admitted that they processed approximately 10,000 mtrs per month from the respondent from 1997-98 to 1999-2000 and in 2000-2001 they have processed 30000 mtrs. fabrics per month and settled the job charges (with or without bills). He also admitted that they have not sent the fabrics with delivery challan and also admitted that the respondent used send the fabrics along with white paper containing the particulars of colors of fabrics and quantity thereof. Shri C. Manikandan who used to come and collect the job charges and they destroy all the white papers given by the respondent. He also admitted that during March 2001 they have sent 10240 mtrs. of gada fabrics to the respondent and they returned 11060.30 mtrs. of processed fabrics in the Matador var No. TN 27 E 1854 on 06.03.2001, which was seized....
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....order and Revenue preferred appeal against dropping of proceedings. 7. Ld. AR on behalf of the Revenue reiterated the grounds of appeal. He submits that detailed investigation was carried out by the Preventive wing of the Commissionerate and detailed statements were recorded from the respondent and other persons. It is clearly brought out at page-4 of the OIO in para 8 (i) and (ii) and various statements recorded from the suppliers of grey fabrics and documents recovered from SCM and AP & Sons clearly confirms the modus operandi adopted by the respondent for clearance of dyed woven cotton fabrics clandestinely without accounting and without payment of central excise duty. The lot register recovered from SCM clearly proves the quantity of grey fabrics sent to the respondent unit. Two files containing white papers recovered at the premises of SCM issued by the respondent contained the details of process carried out and amount collected on the fabrics supplied by SCM. He further submits that statement by the Managing Partner Shri R. Rajashekaran clearly admitted the clandestine removal of processed fabrics and he is fully aware of the entire modus operandi. 8. He further submits....
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....n the loose sheets and the value adopted by the department is arbitrary on the alleged clearance of processed fabrics and the quantity shown in the work sheet is wrong. The department erroneously indicated excess quantity of 7661.15 mtrs. shown in respect of SCM for 2000-2001. He also submits that excise duty demanded @ 24% for the year 2000-2001 (16%BED and 8% ADE) whereas the correct rate of duty is 16% (8% BED and 8% ADE). He further submits that the quantity of clandestine removal to AP & Sons as shown by the department for the year 2000-2001 accounted excess quantity of 10608 mtrs whereas as per their invoices accounted quantity is 21677 mtrs. Department has also demanded excise duty on the seized quantity of 11069.30 twice as the adjudicating authority separately confirmed the duty and appropriated. 10. He further submits that Revenue has filed appeal only against the respondent and not preferred appeal against other co-noticees, who were implicated in the SCN. Revenue appeal is only on the demand dropped on the respondent on the clearances of processed fabrics to SCM and AP & Sons. He relied upon the following case laws in support of his contention. 1. Sanket Fo....
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....ers right from interception of the vehicle on 06.03.2001. Officers visited the respondents unit on the same day and verified the records and recorded statement from Shri S. Rajasekharan, Managing Partner of the respondent company. On 07.03.2001, the officers visited SCM, who supplied grey fabrics and recorded statements from Shri K.R. Senthil Kumar, Proprietor of SCM, and on 9.3.2001 visited another supplier of grey fabrics M/s. AP & Sons, Erode, verified the records and recorded statement from Shri P. Murugesan, Managing Partner of AP & Sons. Statements also recorded from Shri P. Subramaniam, Proprietor of M/s. Sree Balaji Fabrics on 29.06.2001 and from the owner of the vehicle Shri J. Manoharan, and from Shri C.A. Pavun, Driver of the vehicle. The investigation established clandestine removal of goods by recovery of private records from SCM, AP & Sons and Sree Balaji Fabrics etc., and from the respondent unit. 14. The adjudicating authority without examining the evidences and documents and statements, dropped the demand of Rs. 22,05,090/- and held that the department has not proved the clandestine removal of the processed fabrics with any corroborative evidence and the SCN wa....
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.... records. 16. Further I find that the department clearly established the receipt of non duty paid processed fabrics by SCM. On perusal of copies of white paper dated 07.04.2000 which clearly shows the supply of 1005.01 mts. and it is duly signed by Shri C. Manikandan for delivery of goods and cash received. Another white paper shown the quantity of 2192.90 mtrs. of processed fabrics delivered to SCM and he signed and endorsed cash receipt of Rs. 5709/- This confirms that Shri C.Manikandan, who is the main person handling all purchases and delivery of the finished goods had not only delivered the goods personally to the suppliers but also signed on the white papers as proof of delivery and receipt of amount. All such papers relied by the department bears the signature of Shri C. Manikandan and it clearly shows the description of goods and quantity of processed fabrics delivered and cash received. These vital evidences were not discussed by the adjudicating authority. Therefore, the department has clearly brought out in the SCN clandestine clearance of processed fabrics without payment of duty with connivance of the suppliers ie., SCM and AP & Sons through their employee. 17. I....
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....statements were recorded by the Central Excise Officers and they were not police officers. Therefore, such statements made by the Managing Director of the Company and other persons containing all the details about the functioning of the company which could be made only with personal knowledge of the respondents and therefore could not have been obtained through coercion or duress or through dictation. We see no reason why the aforesaid statements made in the circumstances of the case should not be considered, looked into and relied upon. 19. We are of the considered opinion that it is established from the record that the aforesaid statements were given by the concerned persons out of their own volition and there is no allegation of threat, force, coercion, duress or pressure being utilized by the officers to extract the statements which corroborated each other. Besides, the Managing Director of the Company on his own volition deposited the amount of Rs. 11 lakhs towards excise duty and therefore in the facts and circumstance of the present case, the aforesaid statement of the counsel for the respondents cannot be accepted. This fact clearly proves the conclusion that the stateme....
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....universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree; for, in all human affairs absolute certainty is a myth, and as Prof. Brett felicitously puts it-"all exactness is a fake". El Dorado of absolute Proof being unattainable, the law, accepts for it, probability as a working substitute in this work-a-day world. The law does not require the prosecution to prove the impossible. All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. Thus legal proof is not necessarily perfect proof often it is nothing more than a prudent mans estimate as to the probabilities of the case. 31. The other cardinal principle having an important bearing on the incidence of burden of proof is that sufficiency and weight of the evidence is to be considered to use the words of Lord Mansfield in Blatch v. Archar (1774) 1 Cowp. 63 at p. 65 According to the Proof which it was in the power of one side to prove and in the power of the other to have contradicted. Since it is exceedingly difficult, if....
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....ordingly, impugned order is liable to be set aside to the extent of dropping the excise duty demand of Rs. 22,05,090/- on the goods cleared for the period from 1996-97 to 2000 to 2001 (upto 6.3.2001). 21. The respondent in their cross objection pleaded that they are eligible for cum-tax benefit and they are eligible for modvat credit. Respondent also disputed Annexure-3 of the SCN on total quantity arrived by the department for the year 2000-2001 and also contended that Revenue charged higher rate of duty of 24% for the year 2000-2001 instead of 16% (8% BED and 8% ADE). 22. (i) On allowing cum tax benefit I find that once it is held that the respondents are liable for payment of excise duty on the dyed fabrics and collected the charges from the suppliers the respondents are eligible for cum tax benefit on price charged from their suppliers. I allow cum tax benefit on the total value. The lower authority to requantify the amount as above. (ii) The respondents second plea is on the wrong adoption of higher rate of duty in respect of the quantity cleared for the year 2000-2001. On perusal of Notification No. 17/2000-CE dated 01.03.2000, I find that correct rate of duty charg....