TaxTMI 
TaxTMI 
2005 (4) TMI 159
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....ompany and seized certain documents. During the raid, raw-material, printed laminated rolls, were found excess than the balance recorded in the record and the same were seized. Similarly, some pouches were also found excess and unaccounted lying in the factory and the same were also seized. The company had also franchise agreement with M/s. J.M. Advertising & Marketing Co. Ltd. for which the company was paying royalty for using their brand name i.e 'Goa 1000'. The company had also its sales depot at Jalan and the documents seized from that depot revealed the clandestine removal of the goods. Some documents were also seized from the factory premises of the company as well as from the Office of M/s. Sanjay Agencies and Shri Sanjay Shah, who was running that agency as a Partner and who allegedly admitted the clandestine sale of the finished goods manufactured by the appellants/company. Similarly, some documents were seized from the premises of M/s. Sharda Associates, which was the proprietorship concern of Shri Suresh Nagindas Soni, who was also looking after the marketing of the Gutka manufactured by the appellants/company and those documents as well as his statement allegedl....
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....pouches, in a clandestine manner from the market i.e. from authorized or unauthorized dealers during the period in dispute. Regarding procurement of printed laminated plastic rolls, the Revenue has placed reliance on the evidence of Shri Arvind S. Rane, Manager Excise of M/s. Akar Laminates, Aurangabad; Shri Sanjay Gopal Sarode, Production Manager of M/s. Vishnu Vijay Packaging Ltd. (in short VVPL'). Shri Arvind S. Rane, is stated to have disclosed in his statement that M/s. Akar Laminates had 455 printed cylinders for different customers and did not had any cylinders having printing matter relating to Goa Gutka or M/s. Sanket. While Shri Sanjay Goel, Production Manager of M/s. VVPL is said to had admitted that his company had two sets of printing cylinders each for Goa 1000 and Goa Plus and that the printed plastic laminated rolls of 'YAHOO' brand after manufacture were supplied by M/s. VVPL, to M/s. Sanket Industries, Jalan, whereas, in fact, that supply of the value of Rs. 67,47,747/- was received by the appellants/company. But the evidence of both the witnesses legally could not be used against the appellants as none of them stepped into the witness box for cross-ex....
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....t company, who is said to have supplied this raw material to the appellants/company and also further admitted the shortage of this raw material in his own factory, but his evidence is of no help to the Revenue. When stepped into the witness box for cross-examination, he had denied of having supplied this raw material to the appellants/company. He had also denied of having ever supplied this raw material without payment of duty to that company, and further deposed that payments were received by his company only by cheques as and when the supply was made to the appellants/company. His cross-examination has been wrongly ignored and brushed aside by the adjudicating authority on the ground that it was an afterthought. His cross-examination is to be taken as a part of his statement. His examination-in-chief was recorded at the back of the appellants/company during investigation and on the first opportunity available, the appellants/company summoned him for cross-examination to test the veracity of his earlier statement i.e. examination-in-chief, which was recorded at their back. His statement which includes examination-in-chief as well as cross-examination, is to be read as a whole and ....
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....hat the cash recovered from his premises belonged to the appellants/company. From his statement, the adjudicating authority has raised an inference that this cash was the sale proceeds of the Gutka which was supplied to him by the appellants/company. But during the course of cross-examination, Shri Sanjay Shah, virtually retracted his statement and denied that the amount recovered from him was the sale proceeds of the Gutka supplied to him in a clandestine manner by the appellants/company. He had also denied that the papers/record recovered from his premises belonged to the appellants/company. The cash amount had been claimed by the appellants/company and its associate company, M/s. Sanket Industries and they had produced even the copies of their cash books wherein it is duly reflected, but no clear cut finding in this regard has been rendered by the adjudicating authority. Moreover, there is no cogent evidence to prove the actual sale by Shri Sanjay Shah through his firm, M/s. Sanjay Agencies, of the Gutka supplied to him in a clandestine manner by the appellants/company during the period in dispute. No statement of the buyer regarding the purchase of the Gutka from M/s. Sanjay Ag....
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....ages i.e 35 to 38 (copies at pages 112 to 115 of the paper book) filed by the SDR, do not in any manner indicate the receipt of Gutka by M/s. Sanjay Agencies from the appellants/company. The vehicle numbers are no doubt recorded therein, but neither owner nor driver of those vehicles were examined to ascertain if the goods transported were Gutka or something else. Therefore, from these documents, the adjudicating authority has wrongly inferred that M/s. Sanjay Agencies sold the Gutka without payment of duty and the same was received by his agency from the appellants/company. From the statement of Shri Ketan V. Shah, we also find that he had stated that M/s. Sanjay Agencies is trading in different commodities like Tea, Biri, Raw Tobacco, Cloves, Packing Material etc. and that he and Shri Sanjay Shah were also running another company by the name of M/s. Sanjay Industries in which they were Directors and said company deals in flavored drinks, mineral water etc. 12. The file No. 1 and the pages contained therein, referred to above, recovered from the premises of M/s. Sanjay Agencies, also did not bear the name of the appellants/company or signatures of any of its Directors/Employees, ....
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....s of the consignor and the consignee are also not recorded therein. The numbers of the vehicles who transported the goods are also not mentioned therein. Shri Suresh N. Soni had even retracted his earlier statement before the Court where he was produced after arrest. The adjudicating authority itself had released the seized amount of Rs. 2 lakhs for want of any evidence to prove that it was the sale proceeds of the Goa Gutka, disposed of by Shri Suresh N. Soni, on behalf of the appellants/company by not ordering the confiscation of the same. It also does not stand proved that M/s. Sharda Associates did not belong to Shri Suresh N. Soni but to the appellants/company. Under these circumstances, no reliance could be placed by the adjudicating authority on the evidence of Shri Suresh N. Soni and the documents allegedly recovered from his possession for saddling the appellants/company with the duty demand. 14. We find that some documents which had been marked as Pages 52, 67, 97, 106, 112 & 113 of file No. 27, were allegedly recovered from the factory premises of the appellants located at Jalan and the adjudicating authority has relied upon the same also for confirming the duty d....
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....re is also no evidence, as observed above, to prove the clearance of the Goa Gutka in a clandestine manner during the period in dispute, by the company. 16. Likewise, the ocular testimony of Shri Dinesh Gupta, employee of the appellants/company recorded on 21-2-2002 and 26-6-2002, did not advance the case of the Revenue against the appellants/company regarding the clandestine manufacture and removal of the Goa Gutka for lack of any corroborative evidence. 17. From the record, we find that some documents were recovered from the residential premises of Shri Sudhir Khanna which have been referred as Pages 22, 22 & 25 of the file (copies at pages 170 to 172 of Paper Book filed by SDR) and his statement was also recorded in respect thereof wherein he allegedly stated that he was working as marketing representative having base at Delhi for the sale of products manufactured by the appellants' company at Jalan and the documents recovered from the premises of Shri Suresh N. Soni, Marketing Officer also indicated the transportation of the goods from Jalan to New Delhi during the period July, 2001 to September, 2001. He had also disclosed that Gutka sold in Delhi prior to December, 2001....
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.... Receipts (Page 232 of SDRs paper book) through which the goods were allegedly transported from Old Delhi Railway Station to various destinations, it cannot be made out that the goods were Goa Gutka which were manufactured and supplied by the appellants/company. The details of numbers of the GR Book, dates, numbers of railway receipts, names of consignees and of the consignors are no doubt recorded in these copies, but no investigation had been carried out to verify the correctness of the same. No copies of the Railway Receipts had been also brought on record. Shri Sitaram Suri, Railway Booking Agent, was not even tendered for cross-examination from whom the statement pertaining to the booking of the goods was seized. Therefore, this entire evidence did not help the Revenue for proving the charge of clandestine manufacture and clearance of the goods by the appellants during the period in dispute. 19. We thus find that the adjudicating authority has, in fact, confirmed the duty demand and imposed penalties against the appellants only by drawing inferences and placing reliance on inadmissible, inadequate evidence, discussed above. Therefore, the impugned order, in our view, cannot b....