TaxTMI 
TaxTMI 
2002 (11) TMI 91
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....nsequential violation of the Act and the Rules. They were called upon to show cause why proceedings should not be initiated against them for the contravention of the provisions of Section 6 of the Act as also Rules 173B, 173C, 173F, 173G(i) of the Rules and Rule 174 read with Rule 9(i), Rule 173G(2) read with Rule 52A, Rule 173G(4) read with Rule 53 and 226 of the Central Excise Rules, (the Rules). The said Collector after holding the necessary adjudication proceedings came to the conclusion that the appellants have manufactured and cleared 1,61,122 kgs of tread rubber and removed the same without payment of central excise duty. He also came to the conclusion that the appellants had not maintained required stock registers thereby they contr....
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....the books of the firm. Therefore, it is on this assumption the Department initiated the proceedings. 4. A perusal of the adjudicatory order of the Collector clearly shows that he has placed strong reliance on the statement of this Sunny P. Kunnath, partner of M/s. Universal Agencies to come to the conclusion that the quantity of carbon rubber sold under 82 invoices by his firm was in fact sold to M/s. Shalimar Rubber Industries. The appellant herein have contended 62 of the said invoices were not in the name of Shalimar Rubber Industries but were in different names with which the appellant firm had no connection. But the Collector accepted the case of the Department that the supplies made under 62 invoices must have been made only to Sha....
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....the request of the appellants to produce the said Shri Kunnath for cross-examination, the Department did not do so, hence, no reliance could be placed on that part of the case of the Department as to the purchase of unaccounted carbon black, and if that part of the case is excluded, then there could have been no finding against the appellants. The learned Counsel also pointed out that the criminal proceedings initiated against the Department has since culminated in an order of discharge and in support of which he has produced a copy of the judgment by way of additional evidence in I.A. Nos. 9 to 12 of 2002 in these appeals which clearly shows that the Department's case as to the purchase of this un-accounted carbon black has been reject....
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.... Shalimar Rubber Industries, the appellants herein under the said fictitious invoices did purchase huge quantity of carbon black from M/s. Universal Agencies. As noticed above, this witness was not examined by the Collector in the proceedings. Consequently, he could not be subjected to a cross-examination. Question thus arises, can the evidence of this witness be accepted as gospel truth to condemn the appellants herein? It is to be seen from the records that the appellants herein had produced a letter dated 22nd June, 1987 written by M/s. Universal Agencies of which above mentioned Shri Sunny P. Kunnath was a partner wherein it was specifically stated that the appellant Shalimar Rubber Industries had not purchased carbon black recovered by....