Judgment:
1. This a Revenue appeal against part of the Order-in-Original No.57/96 dated 9.12.96 by which the Commissioner of Central Excises Chennai has dropped part of the proceedings based on entries made in the parcel note book. The Commissioner has noted in paras 18 to 20 of his order that the quantity of clearances without payment of duty has been arrived at by totalling the quantities shown as 'packed' in the parcel note book. However, neither the total quantities packed during the period have been arrived at nor these quantities compared with the RG-1 production record. He has noted that only those entries in the note book which did not tally with the invoices have been taken into account for calculating the demand. He has noted that there are instances where clearances had been made under proper invoices and these have not been deleted. Therefore, he held that it is not conclusively proved that entries in the parcel note book show actual quantities of goods manufactured. He also noted that there is no evidence available on record to establish that excess raw material was procured, additional man-power employed and the goods where actually transported; that some of the customers of respondent company stated that they had received snuff as recorded in the note book but he, however, noted that these statements had not been corroborated by any direct evidence. He also noted that details of payment made by the customers were also not available on record. Hence, for lack of evidence and as the charge had not been conclusively established pertaining to the manufacture or clearance made clandestinely, he dropped the demand in so far as the charge pertaining to clearances said to have been made as noted in the parcel note book.
2. Revenue is challenging this portion of the order and is contending that said "Parcel Note Book" contained details like destination, packing details, total quantity, number of bundles and date. The Accountant of the respondent company, viz. Shri Kunjaram had admitted that he maintained the said note book; that the parcel note book reflects the actual despatches to various customers; that the parcel note book contains particulars of accounted as well as unaccounted removals; that on certain occasions they had despatched snuff without payment of duty; that while the invoices were prepared for lesser quantity, they had in reality despatched larger quantity; that on certain occasions, consignments of unaccounted snuff were despatched through hired vehicles; that on certain occasions parcels were carried by hand and that the sale proceeds in respect of unaccounted despatches were received in cash by the partners. Therefore, it is pleaded that it appeared that entries made in the note book captioned 'parcel note book' are nothing but the actual despatches made by the respondents and not 'packing schedule' as contended by them. It is stated that the entries in the parcel note book are to be taken as details of the quantity despatched only and hence the demands raised are required to be confirmed.
3. Heard Ld, DR Shri A. Jayachandran and Ld. Counsel Shri S.Venkatachalam.
4. La. DR took us through the records and heavily relied on the statement given by the respondent's accountant and others and pleaded that the details recorded in the parcel note book were corroborated and it is sufficient to uphold the charge of clandestine removal.
5. On the other hand, Ld. Counsel points out that the despatches were made to 65 customers. The department had examined only 5 customers.
Only two of them had turned up for cross-examination and had clearly stated that they had received the goods under invoices. Likewise, two of the customers, who had initially stated that they had received the goods, later resiled and also pleaded that those receipt of goods were against invoices. The other customers also had clearly stated that they received the goods under invoices. He submits that the representative dealers, who were examined, have all stated that the goods were received under invoices and as the department has not corroborated the charge, the revenue's appeal cannot be allowed. He relied on large number of judgments to say that entries made in the private note book cannot be considered as conclusive proof of manufacture and clearance of goods clandestinely. He referred to the judgment of this Bench rendered in the case of Krishna Bottlers 1999 (32) RLT 845. He submits that this judgment has clearly laid down that private note books cannot be relied unless it is fully corroborated. He submits that this judgment is based on large number of judgments including the Apex Court judgment rendered in the case of Triveni Plastics 1996 (54) ECC 77 (SC): 1994 (73) ELT 7 (SC); Oudh Sugar Mills v. UOI, 1978 ELT J (172).
He has also filed copies of large number of citations to prove the point in support of the judgment given by the Commissioner.
6. I have carefully considered the submissions made. As has been held in large number of judgments of the Tribunal based on the Apex Court judgment that the Revenue is required to prove the charge of clandestine removal with cogent and sufficient, corroborative evidence.
It has also been now well laid down that mere entries made in the private note book are not sufficient to hold the charge of clandestine removal. In the present case, the Commissioner has scrutinized the entries made in the note book and found that in the note book there are entries made with regard to goods cleared under the invoices and also with regard to amounts received from them. He has also noted that there is no deletion made in the note book in respect of goods despatched under proper invoices. He also noted that there is no clandestine removal to prove that entries in the parcel note book show the actual quantities of goods manufactured. In the grounds of appeal, revenue is relying on the statement of the accountant and the entries. Revenue has only examined 5 customers out of 65 customers to whom the goods were supplied. Out of these 5 customers, two of them had given statements initially in favour of the Revenue. However, same has been resiled and they have clearly stated that they had received the goods under invoices. Likewise two other witnesses did not appear for cross-examination and the one who appeared clearly stated that he had received the goods under invoices and against full payment. In a circumstance like this, it is not possible to hold that Revenue has produced sufficient evidence with regard to manufacture and clearance of goods clandestinely. Revenue ought to have produced the evidence of purchase of raw material, manufacture and clearance of goods clandestinely by examining the workers and also those who have received the goods without payment of duty. In view of lack of evidence, the Commissioner has rightly dropped the proceedings with regard to the charge pertaining to clandestine removal. However, he has upheld the charge pertaining to certain other charges and has confirmed duty and penalties. The party's appeals have already come up before the Tribunal and the Tribunal has upheld that charge and the findings recorded by the Commissioner except for giving benefit of reduction in penalties.
On a total examination of facts and circumstances and in the light of the judgment cited before me, I am satisfied that the order passed by the Commissioner was just and proper and it does not require any interference. For lack of evidence, the Commissioner has dropped the proceedings as before him there was no concrete evidence shown which has escaped the notice of the Commissioner while recording the order.
As there is no merit in the appeal, the same is rejected.