1. In these six appeals, arising out of common Order-in-Original No.8/2004 dated 31-3-2004 and filed by M/s. Opel Alloys (P) Ltd. and their Directors and employees, the main issue involved is whether they had manufactured the excisable goods clandestinely and removed the same from their factory premises without discharging the duty liability.
2.1 Shri Pradeep Jain, learned Advocate, mentioned that the Appellants manufacture MS Ingots and avail of the benefit of small scale exemption under Notification No. 9/2001-CE., dated 1-3-2001; that the entire Order-in-Original is based on the alleged private records seized from 301, Devika Chambers, Ghaziabad; that these documents make no mention of the Appellant-Company nor is there anything in those documents which can link them to the Appellant-Company; that the said Devika Chambers was never their premises; that the writer of the documents has not been identified nor any effort has been made to trace them. He, further, mentioned that the only basis on which the Adjudicating Authority has relied on these documents is the statement of Shri Sunil Garg, Director, wherein he had stated that the said documents related to them; that the said statement was retracted on the very next day and Sunil Garg specifically mentioned therein that the statement had been extracted from him using third degree methods; that he had also to be medically treated for the injuries suffered by him; that the Adjudicating Authority has, however, recorded a finding in the impugned order that the documents sent by Shri Sunil Garg were not on record; that this finding is not correct as they have conclusive proof of despatch of the said documents to the Commissioner by registered post.
2.2 He also mentioned that the Commissioner has negatived their plea that 301, Devika Chambers was not their premises on the ground that the Appellant, under their letter dated 30-7-2002, requested for release of documents and computers resumed from Devika Chambers, and had, on 23-9-2002, actually received back these documents and computers and that if Devika Chambers did not belong to the Appellants, why was one of their director Shri Sunil Garg present there. The learned Advocate submitted that there is no force in all these findings as these are against the facts; that Shri Sunil Garg was forcefully taken by the Officers from his factory and this can be borne out from the Panchnama dated 3-5-2001 drawn at Devika Chambers wherein it is mentioned that while search was going on "Shri Sunil Kumar Garg, Director of M/s. Opel Alloys (P) Ltd. also came there -"; that this fact clearly disproves the finding of the Commissioner that Sunil Garg was present at Devika Chambers. He, further, submitted that their letter dated 30-7-2002 makes no reference to Devika Chambers; that they had never requested for return of documents and computers seized by the Officers from Devika Chambers; that this is evident from their letter dated 9-9-2002 wherein they have acknowledged the receipt of "all the unrelied documents resumed as per Panchnama annexure-A dated 3-5-2001 drawn at the factory premises of M/s. Opel Alloys P. Ltd. 9th Km G.T. Road, Chhaprolla, Distt Gautam Budh Nagar". He contended that the Department on its own called upon the Appellant and handed over the LAPTOP which was given to the Department in the Central Excise Office at Meerut by Sunil Garg and while handing over the LAPTOP, the Officers also gave the unrelied documents to them which were recovered from Devika Chambers; that the Department has not brought on record any positive evidence to show that 301, Devika Chambers belongs to the Appellants or the same was their office premises; that they were also not permitted to cross-examine the Panchas in spite of specific request made by them in their preliminary reply dated 28-1-2004; that the Commissioner has given a finding in the impugned Order without ever intimating the Appellants, that there is no need to grant opportunity to cross-examine the Panchas as there is no doubt about the fact that Devika Chambers was the office premises of M/s. Opel Alloys for the purpose of keeping records, etc, that in absence of any material to prove that Devika Chambers was Appellants' office, the Commissioner ought to have allowed the cross examination of the Panchas; that as such the Department has failed to establish that Devika Chambers was the Office premises of the Appellants.
3. The learned Advocate mentioned that in any case the relied upon documents cannot be made the basis for confirming demand as the Appellants' name did not figure any where in the reports such as Chemical Analysis Report, D.G. Set Reports, Mini Ledgers, External Weighment Slips; that further the Chemical Analysis Report were unauthenticated and unsigned and as such are not admissible as evidence; that D.G. Set reports are alleged to have shown quantity of furnace oil purchased by them; that, however, there is no attempt in the show cause notice to correlate this purchase with the production/clearance of ingots; that the Private Registers do not tally with the D.G. Sets reports or the Chemical Analysis Reports; that there is also no attempt made by the Department to correlate the alleged actual amount of scrap purchased shown in these Registers with the production and clearance of M.S. Ingots by them; that none of the pages of these "private registers" were shown to Sunil Garg and his so called admission cannot apply to these registers in any case. He further mentioned that the Revenue has placed reliance on 10 Mini Ledgers; that the figures in these ledgers were inconsistent with those in the Private Registers; that External Weighment Slips are purported to have been issued by Shriram Dharam Kanta and Neelam Dharam Kanta; that no statement had been recorded from any person of Shriram Dharam Kanta; that Shri Vineet Kumar of Neelam Dharam Kanta did not, in his statement, state that the said weighment slips pertained to the Appellants' clearances; that in fact no such question was put to him by the Officers; that it has been held in the case of Rhino Rubber P. Ltd. v. CCE, 1996 (85) E.L.T. 260 that third party records cannot be relied upon to establish an allegation of clandestine removal. He also mentioned that the Department has relied upon certain loose papers allegedly showing payment to certain persons and it has been presumed without any basis that the loose papers showed the cash payments to scrap traders, contractors and truck owners as no statement of any of these persons had been recorded by the Department. He also contended that nothing material has been noticed regarding the statement of Shri Pawan Garg; that the averment that Shri Subhash Garg had, on being shown the Chemical Analysis Reports, accepted the same is entirely incorrect; that Subhash Garg had merely affixed his signature on the said pages in token of having seen them; that he had not admitted the contents of the said reports or even that they applied to the Appellants' production or clearances.
4.1 The learned Advocate thus submitted that this is a case of practically no evidence; that in any case it cannot be said that the degree of evidence required in cases of clandestine removal existed in the present matters; that the Courts and Tribunal have held that in order to sustain the allegation of clandestine removal, some essential aspects are to be proved which are as under : (i) Whether they have the necessary installed capacity to have manufactured and cleared the goods worth Rs. 18 crores, approximately; (ii) Where they obtained the necessary raw materials from in such a huge quantity; (iii) Who were the recipient of allegedly clandestinely removed ingots; (iv) Whether they had the necessary manpower for making such a huge production within the period of 13 months; and (v) From where did the Appellants purchase the necessary furnace oil for running the DG Sets when admittedly there was no electricity connection.
4.2 He contended that the Revenue has failed to correlate any of the documents recovered from Devika Chambers with regard to these aspects; that they have the installed capacity of 3,000 Kgs. only and it is beyond imagination that they can manufacture such a huge quantity of finished products; that the Department has not put any question to any of the person from whom the statements were recorded as to where the Appellants received the material from and no attempt had been made to make any inquiry from the source of the supply of the raw materials; that the Department had not even verified from the recipients of ingots worth Rs. 18 crores alleged to have been manufactured and clandestinely removed by them.
4.3 The learned Advocate emphasised that one of the necessary requirement for running a factory is the manpower employed and for manufacturing alleged huge quantity of ingots, they should have employed a very large manpower; that the Appellants had only 23 persons in their rolls for which the Appellants had made necessary payments to the E.S.I.; that the Department did not make any enquiry as to how much manpower was being employed by them.
4.4 He also mentioned that the furnace oil for running D.G. Sets was obtained by way of permits issued by Oil Corporations; that the Appellants had the permits for only 150 Kl from I.O.C. and B.P.C.L.; that the allegation of the Department on the basis of document recovered from Devika Chambers is that they had consumed a huge quantity of furnace oil as compared to the quantity declared in the statutory records; that the Department had not even enquired either from the Appellants or from the outside source as to from where they could get such a huge quantity of furnace oil; that more over they had only storage capacity of 15 kl at the relevant time and then how could they store such a huge quantity of furnace oil required for running D.G. sets.
4.5 He further mentioned that their contention that Devika Chambers does not belong to them is also substantiated from the fact that they had started their trial production only from 1-3-2000 for which necessary intimation had been given to the Department, then how could they manufacture from February 2000; that further they had given intimations for the closure of their factory for certain periods during March, 2000, December, 2000 and January, 2001 on account of repairs; that even then relied upon documents recovered from Devika Chambers showed production during these periods.
4.6 The learned Advocate contended that there is no room for assumption and presumption in cases of clandestine removal as held in the case of Quality Exports & Chemicals v. CEGAT, 2002 (140) E.L.T. 362 (All.) and Grauer & Weil (India) Ltd. v. CCE, 2000 (116) E.L.T. 618; that the standard of proof in cases of clandestine removal is proof beyond doubt and not that of preponderance of probabilities as held in CCE v.Universal Polythelene Industries,Sharma Chemicals v. CCE, Calcutta-II, 2001 (130) E.L.T. 271 (T); that positive evidence is necessary to sustain a charge of clandestine removal as held in Grauer & Weil (India) case, supra. He also mentioned that it has been held by the Tribunal in the case of CCE, Calcutta-II v. Tube Bend (Cal.) Pvt. Ltd., 2001 (136) E.L.T. 839 (T) that "the charges of clandestine removal are required to be proved beyond doubt by production of evidence and cannot be based upon comparison of entries made in the Khatta and the RGI register"; that entries in private records cannot be held to establish clandestine removal without corroborative evidence; that in the case of CCE, Chandigarh v. Laxmi Engineering Works, 2001 (134) E.L.T. 811 (T), when the charge of clandestine removal was made on the basis of some slips recovered from the assessee's premises, it has been held by the Tribunal that the duty liability cannot be fastened on them as "there is nothing on record to suggest if any corroborative evidence in the form of receipt of raw materials or sale of the electric fans in a clandestine manner to different buyers by the respondents, was collected during the investigations". Reliance has also been placed on the following decisions :-Sober Plastics Pvt. Ltd. v. CCE, Jaipur, 2002 (139) E.L.T. 562 (T)Sharma Chemicals v. CCE. Kolkatta-II, 2001 (130) E.L.T. 271 (T) wherein it has been held that entries in a private note book "at the most, it may raise a doubt but that cannot take the place of proof -- but the charge of clandestine removal cannot be sustained on such suspicion."Gurpreet Rubber Industries v. CCE, Chandigarh, 1996 (82) E.L.T. 347 (T)Rama Shyama Papers Ltd. v. CCE, Lucknow, 2004 (168) E.L.T. 494 (T)Ess Vee Polymers (P) Ltd. v. CCE, 2004 (165) E.L.T. 291 (T) = 2004 (93) ECC 305 (T)Gian Mahtani v. State of Maharashtra, 1999 (110) E.L.T. 400 (S.C.) The Apex Court has held that "according to the system of jurisprudence which we follow, conviction cannot be based on suspicion nor on the conscience of the Court being morally satisfied about the complicity of an accused person. He can be convicted and sentenced only if the prosecution proves its case beyond all reasonable doubt." 5. The learned Advocate, therefore, contended that no case of clandestine manufacture and removal has been established by the Department and the allegations are based merely on surmises and conjectures. He finally submitted that demand of duty has also been confirmed on account of undervaluation by comparing the value as declared by the Appellant with the values as shown in the alleged private records; that as the allegation regarding the "private records" does not survive, the allegation of undervaluation also fails; that the Appellants are not pressing their Appeal against the confirmation of duty amounting to Rs. 1,59,206/- towards shortage of MS Ingots found in the factory premises.
6. Countering the arguments, Shri R.C. Sankhala, learned Senior Departmental Representative, submitted that when Central Excise Officers visited Appellants' factory premises on 3-5-2001, they intercepted a truck at factory gate; that Shri Arun Kumar, Driver of the said truck, has deposed in his statement that the said truck is used by the Appellants for transporting MS Ingots to various destinations with instructions that after delivery of the goods, bills should be returned to Manoj Kumar; that the Driver also produced an invoice bearing serial number 16 dated 2-5-2001; that the Driver further mentioned that the goods were weighed at Neelam Dharam Kanta; that Shri Vineet Kumar, employee of Neelam Weigh Bridge stated, in his statement dated 3-5-2000, that they used to keep two sets of bills - one for regular customers and the other one for customers like OPEL and such bills were not entered in their register. The learned Senior Departmental Representative contended that it is apparent from these statements and the invoice No. 16 dated 2-5-2001 that the Appellants were indulging in suppression of production and subsequent clearance of ingots without payment of duty; that another invoice No. 16 was also recovered; that fake invoices were being destroyed by Manoj; that this is supported by the fact that when officers verified physically, the stock of MS Ingots, they found stock short by 76.248 MTs involving Central Excise duty Rs. 1,59,206/-.
7.1 The learned Senior Departmental Representative, further, submitted that 301, Devika Chambers is the office premises of the Appellants which is evident from the Panchnama dated 3-5-2001 recorded at Devika Chambers after search; that Shri Sunil Kumar Garg had signed the said Panchnama; that Shri Sunil Kumar Garg has clearly mentioned in his statement dated 3-5-2001 that he is the owner of Devika Chamber which is used for storing his old records; computers installed therein contain the accounts of his various units viz., Mohan Metal Works, Prakash Sales Corporation and OPEL; that he also mentioned in his statement that loose papers found in his brief case relate to a bogus firm as it contains details of work done in OPEL; that Shri Sunil Kumar Garg admitted in his statement that the documents/records seized from Devika Chambers pertain to Opel Alloys (P) Ltd.; that the Department did not receive the so called retraction and the prescription of doctor and bills of medical stores for purchase of medicines. The learned Senior Departmental Representative emphasised that though in the Affidavit, Shri S.K. Garg, has alleged of taking his bag containing cash by the officers, keeping him forcibly in Excise Office and thrashing and beating by the Central Excise Officers, he had not filed any FIR or lodged any complaint with the Police against these alleged atrocities; that further the medical examination report also does not support the Affidavit as it mentions of some swelling and pain only and he refused to get himself admitted in the hospital; that in his subsequent statement recorded on 14-8-2001, he does not mention any thing about his being beaten or thrashed at the time of recording his earlier statement dated 3-5-2001; that thus there is no truth in his retraction; that in his further statement on 3-12-2001 also he does not mention about beating or retracting his statement which goes to show that he had deposed voluntarily in his statement dated 3-5-2001; that voluntary statement is admissible in evidence. The learned Senior Departmental Representative relied upon the decision in the case of Assistant Collector of Customs, Madras-I v. Govindasamy Ragupathy, 1998 (98) E.L.T. 50 (Mad.) wherein the Madras High Court has held that "it is only confession made before the Police or in custody in the presence of police which cannot be relied upon within the meaning of Sections 25 and 26 of the Evidence Act excepting for the specific purpose of Sections 27 and 32 of the Evidence Act. No other confession made before any Authority or prosecuting officials could be viewed with suspicion and they have enormous evidentiary value and conviction could be based on the evidence of such confession statement alone as pronounced in various decisions of the Apex Court. Even law does not admit a refractory version of the confession made before the Customs Officer.
In Surjeet Singh Chhabra v. Union of India and others reported in 1997 (89) E.L.T. 646 (S.C.) ...it is held that in an unauthorised import of gold confession by accused before the Customs Officers that though retracted is admissible and binds the accused since Customs Officers are not Police Officers and there is no contravention of the principles of natural justice. It is further held that the 'confession before the Customs Officer is admission and retraction cannot be accepted, 'where there is confession no need to allow cross-examination of Panch Witnesses in view of confession'. It is further held in- the same judgment that 'the confession statement under Section 108 even though later retracted is a voluntary statement and was not influenced by threat duress, or inducement, etc., and is true one'.Anil Das v. CC, New Delhi, 2002 (141) E.L.T. 135 (T) wherein the Tribunal has discarded the retraction of the confessional statement as the retraction was made only "when they had happened to engage a Counsel at the time of their production before the judicial Court later on." The Tribunal regarded the "retraction being belated and after thought." He also referred to the decision in Deputy Director of Enforcement v. A.M.Ceaser, 1999 (113) E.L.T. 804 (Mad.) wherein the Madras High Court has held that unless the threat and coercion from the officers appears to be true, the Courts are not bound to accept the explanation offered by the accused. The Court has further held that "If the statement of the accused is accepted to be voluntary as held above, there is no provision in the Act that such statement shall not be accepted unless corroborated by any independent evidence." The learned Senior Departmental Representative contended that as Shri S.K. Garg has not proved coercion or threat exercised by the officers and his retraction was not received by the Department, his confessional statement is to be relied upon without any other corroboration; that it has been held by the Tribunal in Tara Chand Shival v. CCE, 2003 (158) E.L.T. 699 (T) that as original affidavit retracting from confessional statement was neither submitted to the Commissioner nor there is any evidence on record to show that affidavit was received by the Commisioner, confessional statement is reliable; that as such Devika Chambers is the office premises of the Appellants and documents recovered therefrom reveal the clandestine manufacture and clearance of MS Ingots by them; that once a fact is admitted by the Appellants, "there is no need for the Department to prove the same" as held by the Supreme Court in CCE, Madras v. Systems and Components Pvt. Ltd., 2004 (165) E.L.T. 136 (S.C); that the Supreme Court has held therein that "It is a basic and settled law that what is admitted need not be proved." 7.3 The learned Senior Departmental Representative also mentioned that if circumstantial evidence produced by Revenue shows that the inference of clandestine manufacture and clearance of excisable goods can be drawn, the Revenue has succeeded in proving the case against the Appellants. He relied upon the decision in the case of T. Shankar Prasad v. State of Andhra Pradesh, 2004 (164) E.L.T. 143 (S.C.) wherein the Supreme Court has held that "Proof of the fact depends upon the degree of probability of its having existed. The standard required for reaching the supposition is that of a prudent man acting in any important matter concerning him ..... In reaching the conclusion the Court can use process of inferences to be drawn from facts produced or proved. Such inferences are akin to presumption of law. Law gives absolute discretion to the Court to presume the existence of any fact which it thinks likely to have happened .... While inferring the existence of a fact from another/ the Court is only applying a process of intelligent reasoning which the mind of a prudent man would do under similar circumstances.... Presumption in law of evidence is a Rule indicating the stage of shifting the burden of proof." He contended that the presumption thus can be drawn from the admission made by S.K.Garg, statement of the driver and employee of Neelam Weigh Bridge, recovery of fake invoices/ loose papers recovered from Devika Chambers showing cash payment to scrap traders, contractors and truck owners and records recovered from Devika Chambers that the Appellants had manufactured and cleared Ingots without payment of duty.
8. The learned Senior Departmental Representative also emphasised that the fact that the Appellants received back the documents and computers seized earlier from Devika Chambers goes to establish that the said premises was the Appellants' office premises for the purpose of keeping records, etc.; that for this reason the Commissioner was of the view that there was no need to grant opportunity of cross-examining the panchas. The learned Senior Departmental Representative mentioned that Relied upon documents (RUD) Nos. 17 and 18 clearly bears the name of the Appellants' Company as follows - "Opel Alloys Pvt. Ltd."; that these Registers and one Note book (RUD 68) show actual purchase of M.S.scrap and production and sale of M S ingots; that moreover a number of sheets recovered from Devika Chambers bear stamp mark of the Appellants Company; that these facts clearly go to establish that the documents recovered from Devika Chambers pertain to the Appellants and the said Chambers was their office premises. He mentioned that cross-examination is not necessarily a part of reasonable opportunity as held by the Madras High Court in the case of K. Balan v. Government of India, 1982 (10) E.L.T. 386 (Mad.); that the Tribunal has also held in the case of Calicut Rubber Company v. CCE, Cochin, 1996 (81) E.L.T. 320 (T) that cross-examination is not necessary when the statements are not false and case against the accused is on the basis of their own statements.
Reliance has also been placed on the decision in the case of Liyakat Shah v. CCE, Indore, 2000 (120) E.L.T. 556 (T). Finally the learned Senior Departmental Representative submitted that the decisions relied upon by the learned Advocate are not applicable to the facts of the present matter in view of the evidence brought on record; that in the case of Ureka Polymers Ltd. v. CCE, New Delhi, 2001 (127) E.L.T. 618 (T) the Tribunal has held the charge of clandestine removal of goods as proved on the basis of production slips maintained 15 days showing higher production than those recorded in RG-1 register. He relied upon the decision in Rajasthan Explosives & Chemicals Ltd. v. CCE, Jaipur, 2003 (159) E.L.T. 289 (T) where the Tribunal has upheld the demand as the assessee had resorted to removal of goods by using parallel invoices and contended that in the present matter also the Appellants were using fake invoices. Reliance has also been placed on the following decisions :Hindustan Processors Ltd. v. CCE, Jaipur-II, 2004 (173) E.L.T. 73 (T) = 2004 (95) ECC 265 (T)Asian Plywood Industries (P) Ltd. v. CCE, Patna, 2002 (140) E.L.T. 294 (T) = 2001 (47) RLT 93 (CEGAT)P.K. Ravindran v. CCE Cochin 9. In reply, learned Advocate mentioned that on RUD 17 and 18 the name of the Appellant-Company was written on the day of recovery itself and as such Revenue cannot claim that these two registers bore the name of the Appellant-company; that the Revenue has not succeeded in proving any fact on the basis of which any presumption can be drawn; that there should be at least some corroboration of the charge of clandestine manufacture and clearance by them; that the entire case of the Revenue lacks any corroboration in terms of purchase and receipt of raw materials, sale of finished goods alleged to have been manufactured by them, transport of the said production and above all any corroboration that Devika Chambers belonged to the Appellants; that mere stamping of a few loose papers cannot be made the basis for foisting upon them such a huge liability.
10. We have considered the submissions of both the sides. The Appellants' main contention is that the entire case of the Revenue is based on the records recovered from 301, Devika Chambers which does not belong to them; the Revenue has not brought on record any material to show the purchase of raw materials, transport thereof, sale and transport of the alleged finished goods; non-availability of work force to produce such a huge quantity of ingots and the production capacity of their induction furnace. On the other hand, Revenue has contended that Devika Chambers was the office premises, of the Appellants and on some of the papers and two Registers, the name of the Appellant-Company was mentioned and Shri Sunil Kumar Garg, Director, had admitted that Devika Chambers was their office premises and in view of his admission no further proof was required to be produced by Revenue. After considering the various submissions and decisions relied upon by both the sides, we are of the view that the Revenue has not succeeded in establishing that 301, Devika Chambers was the office premises of the Appellants. No doubt Sunil Garg has mentioned in his statement dated 3-5-2001 that Devika Chambers is his own office where records of his various companies are stored. However, he has retracted same on 5-5-2001 by swearing in his Affidavit in which he has clearly averred that he was forcibly made to accompany the Officers to 301, Devika Chambers which is not the premises of Opel Alloys Pvt. Ltd. He has also complained of taking his statement under duress and coercion. In support of his affidavit, Shri Sunil Garg had also produced medical examination report, bill for the purchase of medicines. The Adjudicating Authority has discarded the said retraction by observing in the impugned order that the same was stated for the first time while submitting the reply to show cause notice under letter dated 13-2-2004 and hence the retraction is an afterthought. The Appellants on the other hand brought on record the postal receipt on record to prove that the Affidavit was despatched to the Commissioner which has not been controverted by Revenue. It is also noted that the Affidavit was duly notarized before the Notary, Ghaziabad on 5-5-2001 which shows that the Affidavit was sworn on 5-5-2001 immediately after he was allowed to go by the officers. Thus the preponderance of probability is in favour of the Appellants that the retraction was made immediately and the same was not an afterthought. There is no force in the submissions of the learned Senior Departmental Representative that in absence of any FIR lodged by Shri Sunil Garg, it cannot be believed that he was manhandled by the Officers. Merely not lodging any complaint with the Police will not take away the fact of retracting the statement and the injuries mentioned in the medical examination report dated 5-5-2001. Similarly there is no substance in the contention of the learned Senior Departmental Representative that if Sunil Garg had retracted his statement dated 3-5-2001 why had he not mentioned this fact in his two subsequent statements recorded by the officers on 14-8-2001 and 3-12-2001. These statements were in the form of questions and answer and he was answering the questions put to him by the Officers and as such he could not have mentioned about the retraction made by him. The decision in the case of Ureka Polymers Ltd. is not applicable as in that case the Revenue has clearly established the fact that the Appellants therein had procured huge quantity of raw material from M/s.
SRF and M/s. R.K. Traders and the affidavits were submitted after lapse of time. In the present matter no statement of any supplier of raw material appears to have ever been recorded as there is no such statement on record. Under the law, the retracted statement is required to be corroborated in material facts. No such corroboration has been brought on record. We observe that the search proceeding in Devika Chambers was conducted in the presence of one D.K. Singh. It is also mentioned in the Panchnama that when officers and Panchas entered the premises of 301 Devika Chambers, they came across one person who told his name as Shri D.K. Singh. Surprisingly the statement of the said D.K. Singh could have thrown light as to who was possessing the said premises and for whom he was working in that premises. There is also nothing on record to show that as to who is the owner of said premises, whether these are owned by the Appellant-Company/any of its director or any members of their families or they have taken the said premises on rent. In absence of any such material brought on record, it cannot be claimed by Revenue, merely on the basis of Sunil Garg's statement alone; that too retracted statement, that Devika Chambers was the office premises of the Appellants.
11. The learned Senior Departmental Representative has relied upon a number of decisions wherein the statement though retracted has been relied upon to substantiate the charge. Those decisions were passed in the facts and circumstances of those cases. It is settled law that reliance on a decision cannot be placed without discussing as to how the factual situations fit in with the factual situation of the decision on which reliance is placed CCE v. Alnoori Tobacco Products, 2004 (170) E.L.T. 135 (S.C). In Surjeet Singh Chhabra case, the petitioner had confessed that he purchased the gold and converted it as a Kara and bringing of gold without permission of the Authority was in contravention of Customs Act and FEEA. In view of these facts the Supreme Court has held that the cross examination of Panchas was not necessary and the retracted statement binds the petitioner. In the present matter, the factual position about the possession of a premises is to be ascertained which cannot be proved only by a retracted statement. In the case of Tara Chand Shival there was no evidence on record to indicate that original affidavit was submitted to the Commissioner whereas in the present matters, the Appellants have brought on record the postal receipt for despatching the retraction.
The facts in the case of Anil Das are entirely different as the retraction was belated. The decision in the case of Systems & Components Pvt. Ltd. is also not applicable as it relates to classification of Parts of Water Chilling Plant. The Supreme Court held that as the party themselves had admitted that parts in question were parts of a Chilling Plant, and had not disputed that such parts had no independent use, there was no need for department to prove the same.
Such is not the situation in the present matters as the Appellants are disputing the fact itself and accordingly Revenue has to prove that 301, Devika Chambers is the office premises of the Appellants. The Adjudicating Authority has also not allowed the cross-examination of witnesses who witnessed the search of Devika Chambers as he felt that there was no room of doubt about the fact that Devika Chambers was the Appellants office premises. Both the decisions in Calicut Rubber case and Liyakat Shah case do not lay down the law that cross-examination has not to be allowed in all cases. The Tribunal has observed in Liyakat Shah case that "the Adjudicating Authority should not dismiss the request for cross-examination arbitrarily or without exercising discretion in the facts of each case". In the present matters, the Adjudicating Authority has, while mentioning the reasons for not allowing cross-examination, mentioned that the Appellants under their letter dated 30-7-2002, had requested for release of unrelied upon documents 'and computers resumed from 'Devika Chambers'. A perusal of said letter dated 30-7-2002 reveals that there is no mention of Devika Chambers in the said letter at all. The learned Advocate has submitted that the Department on its own handed over the Laptop which was given to it by Sunil Garg and while handing over the laptop, the Officers also gave the unrelied documents etc. recovered from Devika Chambers.
There is substance in his submission that this alone cannot determine the fact that Devika Chambers was the Appellants' office. The learned Advocate has also controverted the submission made by learned Senior Departmental Representative that on RUD 17 and RUD 18 the name of the Appellant-Company was written by submitting that the said name was written only on the day of recovery itself. It has not been rebutted by Revenue.
12. The learned Advocate has also emphasised the fact that in respect of all documents recovered from Devika Chambers, the Department has not identified the person or persons who maintained those records, nor any statement from any employee of the Appellants' factory seems to have been recorded by the Department. These averments have also not been rebutted by Revenue. In absence of any statement or enquiry, it is not understood as to how the Adjudicating Authority came to the conclusion that the loose papers recovered from the office premises showed the cash payments to scrap traders, contractors and truck owners, etc. No statement of any of the scrap traders, contractors and truck owners has been brought on record by Revenue nor these have been relied upon in the show cause notice. The stamp mark on a few of the loose papers does not establish the fact that Devika Chambers was the office premises of the Appellants in absence of any positive evidence. The Revenue has not succeeded in establishing that 301, Devika Chambers was used by the Appellants as their office and accordingly the duty cannot be demanded from the Appellants on the basis of the documents recovered therefrom.
The learned Advocate has also relied upon a number of decisions in support of his contention that entries in private records cannot be held to establish clandestine removal without corroborative evidence and the demand cannot be made on assumption and presumption. In CCE, Meerut v. Raman Ispat (P) Ltd., 2000 (121) E.L.T. 46 (T) the Tribunal did not uphold the charge of clandestine removal even though the rough notebooks were recovered from the premises of the Appellants as the persons who had maintained those notebooks were not examined nor shown to have been engaged by the Respondents. The Tribunal has also considered the production capacity of the plant in dismissing the Appeal filed by the Revenue. The learned Advocate has rightly relied upon the decision in the case of Sharma Chemicals, supra, wherein the Tribunal has held, after referring to a number of decisions, that charge of clandestine removal cannot be sustained on suspicion and entries in a private notebook at most raise a doubt but do not prove the charge of clandestine manufacture and removal in absence of other corroborative evidences like installed capacity of the factory, raw materials utilisation, labour employed, power consumed, goods actually manufactured and packed, etc. When Central Excise Officers visited the premises of the Appellant they did not find any excess stock of raw material or finished goods. Infact the officers found shortage in the stock of finished goods vis-a-vis stock shown in statutory record. The statement of driver may again creates a doubt only as no further investigation has been conducted by the Department by bringing on record the statement of the persons whom the unaccounted goods alleged to have been delivered by the said driver. We observe that even the statement of Manoj Kumar whom, as per the statement of driver, Shri Arun Kumar used to return the bills after delivery of the goods. We thus hold that Revenue has not proved the case of clandestine manufacture and removal of goods by the Appellants. Consequently, the demand of duty on account of clandestine removal and undervaluation is set aside. As far as demand of duty on account of shortage of M.S.Ingots in the factory premises is concerned, the Appellants have not made any submission. In fact the learned Advocate has not challenged the said demand of duty. Accordingly we uphold the demand of duty amounting to Rs. 1,59,206/-. Penalty on the appellant-company is also reduced to Rs. 20,000/-. Penalties imposed on other appellants are set aside as the charge of clandestine manufacture and clearance has not been upheld against the appellant-company itself.