TaxTMI 
TaxTMI 
2009 (2) TMI 155
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....ajapalayam had apparently cleared 10's cotton yarn on cheese to the above terry towel manufacturers in the guise of hank yarn during 1999-2000 and 2000-2001. Evidence was collected in the form of statements from S/Sh. J. Laxmanan, Managing Director of Jaisar, C. Saravanan, one of the Directors of PTE and R.P. Laxmanaperumal, Managing Director of GPS. GPS was a small scale unit availing benefit of SSI Notification. The allegations were that clearance value of dutiable cheese yarn was suppressed to avail inadmissible exemption. Adjudicating allegations of evasion of central excise duty, the original authority confirmed demand of a total amount of Rs.1,58,816/- from GPS, imposed equal amount of penalty on GPS under Section 11AC of the Central ....
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....pugned order, the Commissioner (A) affirmed the order of the original authority. 2. In the appeal before the Tribunal, the appellants submitted that their premises were not visited by the departmental officers to verify the allegations. The physical stock of yarn sent by GPS to Jaisar was not physically verified to find out any discrepancy. No goods were seized to establish misdeclaration of the description of the yarn cleared by GPS. Jaisar had facility to convert hank yarn into cone yarn. Jaisar exported their entire production, as per the statement of Shri J. Laxmanan. Jaisar could have procured cheese yarn without payment of duty legitimately from GPS for export; there was no need for clearance of cheese yarn in the guise of hank yar....
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....al alone could not be relied on as evidence of clandestine clearances. They relied on several case law dealing with clandestine clearances in support of their claim that the impugned order was not sustainable for want of proper evidence as laid down in these case law. The following decisions were relied upon: (1) T.G.L. Poshak Corporation v. CCE -2002 (140) E.L.T. 187 (Tri.-Chen.) (2) Thiruchengode Velavar Spinning Mills Pvt. Ltd. v. CCE. - 2003 (155) E.L.T. 159 (Tri.-Chen.) (3) Emmtex Synthetics Ltd. v. CCE - 2003 (151) E.L.T. 170 (4) Ambica Chemicals v. CCE - 2002 (148) E.L.T. 101 (Tri.-Chen.) (5) Prince Gutkha Ltd. v. CCE - 2002 (148) E.L.T. 141 (Tri.-Del.) (6) Durga Trading Co. v. CCE - 2002 (148) E.L.T. 967 (Tri.) = 2....
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....witness. Moreover, the entries in the books relied upon to establish receipt of cheese yarn from GPS showed 'cones'. In the circumstances, I find that this record cannot be relied on as evidence for clearance of cheese yarn by GPS. It is also relevant that no penal proceedings were initiated against Jaisar or PTE for abetting evasion by GPS. In the impugned order, two letters sent by PTE requesting GPS to dispatch "50 cone bags" each has been relied on. The revenue has no case that GPS had sent cone yarn in the guise of hank yarn. In the circumstances, the only evidence available to the revenue would appear to be the confessional statement of Shri R.P. Laxmanaperumal, Managing Director, GPS. It was rightly argued for the appellants that eva....