TaxTMI 
TaxTMI 
2005 (3) TMI 192
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....cle carrying finished goods was intercepted and it was found that the vehicle carried excess goods on which duty burden was not discharged. Instead of the duplicate, only the original copy of the invoice accompanied the goods. The goods in the two godowns of M/s. GSML valued at Rs. 9,86,343/- were detained. A search of the Registered Office of M/s. GSML resulted in recovery of certain private records. Further the residences of Shri Kamal Kumar Agarwal, Proprietor of M/s. Hanuman Textile Distributors (HTD in short) and Shri Subash Agarwal, Proprietor of M/s. S.N. Textiles (SNT in short) were searched resulting in recovery of unaccounted goods and certain incriminating records. The business premises of M/s. Kunchal Textiles (KT in short) and M/s. Vishnu Cloth Stores (VCS in short) were searched resulting in the detention of unaccounted goods. In the course of investigation, the statements of the following persons were recorded: (i) Shri Gopal Gupta, MD of M/s. GSML (ii) Shri Bhavani Kishore, Accountant, M/s. GSM (iii) Shri Ashok Kumar Agarwal, Director, M/s. GSML (iv) Shri Kamal Kumar Agarwal, Proprietor of M/s. HTD(v) Shri Subhash Agarwal, Proprie....
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....Authority on the following grounds : (i) The Adjudicating Authority has demanded the duty based on the so-called admission of Shri Gopal Gupta, MD of M/s. GSML. The statement has not been corroborated by any other evidences. (ii) The Adjudicating Authority relies on the statements of Shri Bhavani Kishore and Shri Gouri Shanker Gupta. But their cross examination was not allowed. This vitiates the entire proceedings. (iii) The statements of the Noticees were taken under duress. They were coerced and threatened into giving statements as per the liking of the Revenue officers. (iv) The statements were later retracted. Hence, the demand made based on the statements, is not sustainable. (v) As per the records, the stock taking took nearly 6½ hours. Considering the magnitude of the stock supposed to have been verified, it could nearly take two days when 20 persons were employed. Hence, the shortages and the excesses have not been properly arrived at and only have been assumed. (vi) The adjudicating authority erred in assuming that the kutcha slips, which were seized from the premises of the dealers, indicate that the grey fabric....
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....tive evidence. The following case-laws were relied on : - Haricharan Kurmi & Others v. State of Bihar - AIR 1964 SC 1184 - Ram Chandra & Another v. State of U.P. - AIR 1957 SC 381 (F) - Jainarain Verma v. CC, New Delhi - 1995 (76) E.L.T. 421 (T) - Manindra Chandra Dey v. CEGAT - 1992 (58) E.L.T. 192 (Cal.) - Suresh Chandra Bahri v. State of Bihar - AIR 1994 SC 2420 - M/s. Rhino Rubbers (P) Ltd. v. CCE - 1996 (85) E.L.T. 260 (T) - K. Harinath Gupta v. CCE, Hyderabad - 1994 (71) E.L.T. 980 (T) - M/s. Ganga Rubber Industries v. CCE - 1989 (39) E.L.T. 650 (T) - CBI v. V.C. Shukla & Others - 1998 (75) ECR 484 (SC) - Pit Ram Singh v. Vimala Devi - AIR 1992 Rajasthan 149 (C) (xiii) The Tribunal, in the case of T.G.L. Poshak Corporation v. CCE, Hyderabad - 2002 (140) E.L.T. 187 (T), has held that to establish clandestine removal, it is necessary to ascertain and prove that factors like sources of raw materials, utilization of such raw materials, consumption of electricity, receipt of sale proceeds, labour employed, etc. are required to be proved. The burden is on the department. However, in t....
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.... to the business transactions carried on by them and none else. This it could have established in a variety of ways viz. (1) by adducing satisfactory proof to the effect that the place from which the secret books of account were seized formed part of the place of business of the accused or was in their exclusive possession and control. (2) that the secret books of account were maintained by or under their orders. (3) that the said books of account were in the handwriting of either of the accused or their accountant, or clerk or some other person employed by them. The third method indicated above could have been adopted by following one or more of the ordinary modes provided in the Evidence Act for proving the handwriting i.e., (i) by calling the Accountant or Clerk or some other employee of the accused who is supposed to have posted the entries in the account books, (ii) by calling a person in whose presence the account books were written, (iii) by calling a handwriting expert to testify that the entries in the secret books of account tallied with the admitted specimen writing of the accused or any of their employees, (iv) by calling a person acquainted with the handwriting of the ....
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.... corroborative evidence. What is meant by 'Corroboration'? "Corroborate" means to provide evidence or information that supports a statement, theory etc. [Oxfords Advanced Learner's Dictionary]. Is this case merely based on statements? Let us refer to the SCN. 8. The SCN relies on several documents. 16 panchanamas were drawn at various places. It is not in dispute, when the stock was ascertained at the factory there were discrepancies. When the vehicle was intercepted, the same was carrying non-duty paid goods. The duplicate copy of invoice did not accompany the goods. Both Shri Gopal Gupta and his Accountant Shri Bhavani Kishore clearly explained the modus operandi of manipulating the figures in the invoice which resulted in payment of duty only on one-tenth of the goods cleared. The statements of Shri Gopal Gupta and Bhavani Kishore provide a wealth of details which in our opinion could not have been dictated or taken under duress. In fact Gopal Gupta has given his statement in his own handwriting. His retraction was also not immediate. Even in the dealer's premises, unaccounted non-duty paid goods were found and the dealers also gave statements to the effect th....
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....received from M/s. GSML. The consignment will be sent on a kutcha bill showing the quantity of processed fabrics and number of packages. Such type of kutcha bills are available from the files recovered from his residence under panchanama dated 15-5-1997. On few occasions they have received the processed fabrics along with Central Excise invoice. So the practice of sending non-duty paid goods from M/s. GSML is very evident not only from the statements of the various persons, but also the incriminating documents. In any type of clandestine activity, the persons try their best not to leave any evidence. We cannot expect persons indulging in clandestine clearance to faithfully put the details of all such clearances in some register and append their signature. This is never done. Hence, clandestine activity at best can be established only by circumstantial evidence. It should also be borne in mind that it will be humanly impossible to establish every link in the chain of clandestine activity. For example, in this case, the recovery of unaccounted goods, the admissions of the persons involved, the recovery of goods/incriminating documents in the dealers' premises, the statement of th....