Govind Printing Works Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. the above captioned three appeals have been filed against a common order-in-original dated 31-8-2001. the two appeals nos. 2351-2352/2001 had been filed by the assessee firm m/s. govind printing works and its proprietor, shri shiv ratan das kanodia, while the third appeal no.e/2995/2002 had been filed by the revenue.2. shri shiv ratan das kanodia is the sole proprietor of firm of m/s.govind printing works. he is engaged in the processing of grey fabric falling under heading 5207 of the ceta. he also carries out drawing, scouring, padding, bleaching and dyeing of cotton fabrics on job work basis. he had been availing the benefit of notification no. 5/99-c.e., dated 28-2-99, by making declaration under rule 174 of the rules that the work of dyeing and bleaching was not being carried out by him with the aid of power and steam. however, on surprise checking by the central excise officers, of his factory on 21-5-1999, it was revealed that, he was carrying out these processes with the power aided jiggers.however, no finished processed fabric was found lying in his factory.but he in his own statement recorded at the spot on 21-5-99 and thereafter on 14-9-99 admitted that the processes of dyeing, scouring, bleaching and calendering, etc., of cotton fabrics, were being carried out by him with the power aided machines, since 1988. he also got enhanced/increased his earlier electricity load of 90 h.p. to 101 kva.the declaration made by him on 12-4-99 under rule 174 of the rules, was found to be incorrect. the list of the machines and electric motors installed in the factory premises, by him, was also prepared by the officers on 21-5-99. the electricity bills for the period october, 1995 to march, 1999 were also procured from kesa, kanpur which were in his name. on completion of investigation, a show cause notice was served on the firm and its proprietor, shri shiv ratan das kanodia, vide which the duty demand for the period 1-4-94 to 31-5-99 on the fabrics processed by them, was raised and imposition of penalty was also proposed therein. the correctness of the show cause notice was, however, contested by shri shiv ratan das kanodia as proprietor of the firm, by alleging that prior to 26-4-99 he was carrying the process of bleaching and dyeing without the aid of power and that he purchased four power operated jiggers from m/s. roshan trading co. vide bill no.025 dated 26-4-99 against payment which was duly reflected in his books of account. he also averred that those jiggers were second hand and after getting the same repaired, were installed by him actually on 15-5-99. he also pleaded that the alleged confessional statement was procured from him by the officers of central excise by coercion and torture and that he lodged police report in that regard also. he, further, averred that in his statement recorded firstly on 21-5-99 and secondly on 14-9-99, wherein he allegedly disclosed the details regarding the use of power operated jiggers since 1988, and procurement of purchase bill in respect of four second hand power operated jiggers after the visit of the central excise officers, were taken under duress, and that he retracted those statements. he denied of having made false declaration regarding the non-use of power in carrying the processes of dyeing and bleaching of grey fabric, during the period in dispute for which the duty demand was raised from him in the show cause notice. he also denied that the benefit of exemption notification no.5/99-c.e., had been availed wrongly by suppressing and concealing the true facts from the department.3. the adjudicating authority, however, did not accept the version of shri shiv ratan das kanodia, proprietor of the firm and confirmed the duty demand for the period april, 1995 to may, 1999 with penalty under section 11ac against the firm and also imposed separate penalty on the proprietor, shri shiv ratan das kanodia, through impugned order.5. we find that by virtue of notification no. 5/99-c.e., dated 28-2-1999, the processes of drying, scouring, padding of grey fabrics undertaken with or without aid of power, were exempt from payment of duty provided the manufacturer did not had the facility of carrying out the dyeing and bleaching with the aid of power or steam. the benefit of this notification had been denied to the appellants firm and its proprietor, on the ground that they were conducting bleaching and dyeing of the grey fabrics with the aid of power during the period from april, 1995 to may, 1999. to substantiate this ground, reliance had been mainly placed by the adjudicating authority on these facts and circumstances, (i) presence of power operated jiggers in their factory on 21-5-99, the date of visit of the central excise officers, (ii) two confessional statements of shri shiv ratan das kanodia, proprietor of firm, (iii) non-entry in the inward register of their factory regarding the receipt of the power operated jiggers on 26-4-99, (iv) the increase in the electricity load from 91 h.p. to 101 kva, (v) draft ground plan showing the location of the power operated jiggers in the factory, and (vi) statement of one of the 11 suppliers of grey fabrics, namely, shri narendra singh yadav, stating that the fabrics received from the appellants were processed with the and of power.6. the counsel has contended that, the above referred circumstances individually, as well as collectively, could not be taken to be substantial and conclusive evidence against the appellants for bringing home the allegations levelled against them in the show cause notice. on the other hand, the learned sdr has argued that, these circumstances were sufficient to establish the correctness of the allegations made against the appellants in the show cause notice for confirmation of duty and penalty on them.7. we have considered the respective contentions of both the sides and in our view the contention of the learned counsel deserves to be accepted. the factory premises of the appellants were visited for the first time by the central excise officers on 21-5-99. therefore, the presence of four power operated jiggers on that date in the factory premises could not be lead to an irresistible conclusion that the same were installed and put into operation by the appellants in april, 1995 the date from which the duty had been demanded, especially when old hand driven jiggers were also found lying there as is evident from the copy of the list of the machines prepared at the spot by the officers and when there is also no oral or documentary evidence to substantiate this conclusion. no statement of any employee working in the factory premises at that time, was recorded regarding the installation of power operated jiggers by the appellants since april, 1995. shri shiv ratan das kanodia, proprietor at the appellants firm, who allegedly admitted the installation of power operated jiggers since 1988, in a statement recorded on 21-5-99, retracted the same by making the statement before the police on that very date, wherein he explained the circumstances and state of confusion under which the said statement was obtained from him by the central excise officers. he, even later on, produced the copy of the bill no. 025 dated 26-4-99 regarding the purchase of four old jiggers with electric fittings from m/s. roshan trading co.thereafter, again his statement was recorded on 14-9-99 wherein he allegedly stated that, this bill was obtained by him from the said firm after the visit of the central excise officers, but this statement too was retracted by him for having procured from him under duress by the officers.8. it is well settled that the rectracted statement of the maker, cannot be accepted as substantial piece of document, rather it is to be taken as light piece of evidence needing corroboration from the independent sources before relying upon the same, as ruled by the hon'ble calcutta high court in manindra chandra dey v. cegat, 1992 (58) e.l.t. 192 as well as in jitendra kumar ghishulal jain, 1998 (103) e.l.t. 591. similarly in state of maharashtra v. p.k. pathak, 1983 (13) e.l.t. 1628 it has been also observed that, he retracted confession must be corroborated in material particulars. therefore, the retracted confessional statements of shri shiv ratan das kanodia recorded on two different dates referred to above, could not be accepted as substantial piece of evidence for holding that he installed the power operated jiggers for bleaching and dyeing in the year 1988 without seeking corroboration from any other independent oral or documentary evidence.no employee of the appellants admitted the installation of power operated jiggers and their operation since 1988 or from april, 1995 the date from which the duty had been demanded. the alleged statement of shri shiv ratan das kanodia that he was charging the dyeing charges between rs. 2 to rs. 9 per meter from the parties for whom he did the job work and that for scouring and bleaching, he had been charging rs. 10 per kg. has also remained uncorroborated. these charges had never been found to be entered in any record maintained in the factory by him. no employee of the factory had admitted this fact in the statement. there is also nothing on record to suggest if any of the suppliers of grey fabrics, who got done the work of dyeing and bleaching, had admitted of having paid these charges to the appellants and that the jiggers with power were being operated by the appellants since 1988 or from april, 1995, as alleged in the show cause notice.9. similarly, mere increase in the electricity capacity from 91 h.p. to 101 kva obtained by the appellants from kesa, kanpur, could not lead to conclusion that the power operated jiggers were installed by them in 1988 or in april, 1995 the date of demand of duty. the copies of electricity bills no doubt were procured by the department for the period october, 1995 to march, 1999 from the kesa, kanpur as alleged in the show cause notice, but from those bills it does not stand proved that there was increase in the consumption of electricity by the appellants during that period as compared to earlier periods. this circumstance thus goes long way rather to disprove the allegations of the department regarding the installation and operation of power operated jiggers by the appellants since april, 1995 or earlier to that since, 1988.10. the draft ground plan showing the location of electric jiggers in the factory premises of the appellants, also did not provide substantial piece of evidence to the department for proving the actual working of the same by the appellants since 1988 or april, 1995.11. we find that during investigation the statements of suppliers of grey cloth for dyeing and bleaching purposes, to the appellants during the period under dispute, from april, 1995 to may, 1999, were recorded but none excepting one supplier, namely, shri narendra singh yadav of s.b. fabrics, admitted the use of power by the appellants in the operation of jiggers for carrying out the dyeing and bleaching of their fabrics. shri narendra singh yadav had a motive to contradict the other supplier's version as he had dispute with the appellants regarding the money transaction and the appellants had even taken out the court proceedings against him for the recovery of the same. therefore, his uncorroborated statement regarding the use of power operated jiggers by the appellants for dyeing and bleaching purposes since april, 1995 could not be attached any credence. at the time of visit of the officers, no fabric after going through the processes of dyeing and bleaching on the jiggers, was found lying there. the argument of the learned sdr that the fabrics must be in the process in the jiggers at that time could not be accepted for want of evidence to corroborate the same. even in the show cause notice, it had not been so alleged.12. few lapses/deficiencies in the plea of the appellants such as regarding purchase of power operated jiggers only on 26-4-99 from m/s.roshan trading co., non-entry in the inward register showing the receipt of the jiggers on that date in the factory and non-appearance of the proprietor, shri sarfraj ahmed of m/s. roshan trading co. who was mainly scrap trader, to accept the correctness of bill dated 26-4-99 issued by him to the appellants regarding the sale of old power operated jiggers, could not be legally made basis for raising presumption for the backward period to hold that the power operated jiggers were installed and commissioned by the appellants, 5 years back. no such presumption for the back period could be legally drawn, especially when no oral or documentary evidence had been brought on record to justify such a presumption. the electricity bills collected from the electricity authority did not show any substantial increase in the consumption of the electricity from april, 1995 onwards the date from which the duty demand has been raised, no statement of any employee of the factory was recorded regarding installation of the power operated jiggers by the appellants in april, 1995 or earlier to that.13. even excepting one, no other supplier of grey fabrics to the appellants for bleaching and dyeing, has observed above, has corroborated the version of the department, on the installation and working of the power operated jiggers by the appellants since april, 1995 or earlier to that. under these circumstances, the presumption for the back period that the appellants might have installed and commissioned the power operated jiggers either in 1988 or in april, 1995 was not warranted by the law. the initial burden was on the department to prove by cogent, reliable and tangible evidence, the installation of power operated jiggers by the appellants since april, 1995 the date of demand of duty or earlier to that. the holes and deficiencies in the defence of the appellants, could not help the department in discharging this burden. the appellants have produced the copy of the bill showing purchase of jiggers on 26-4-99 from m/s.roshan trading co. and also copy of their cash book entries showing the details of payment, made by them to that firm for the purchase of jiggers. they had also produced the sales-tax assessment order pertaining to that firm and the copy of the statement of account of that firm for the year 1999. the copy of the letter issued by the commissioner of income-tax indicating that shri sarfraj ahmed, proprietor of m/s. roshan trading co., was an old assessee. the copy of the income-tax return for the year, 1998-99 of shri sarfraj ahmed was also produced by the appellants. but if this evidence was taken to be not reliable, still it did not help the department much in discharging their burden of proving the installation and working of the power operated jiggers by the appellants since april, 1995, the date from which the duty demand had been calculated and demanded from them. no presumption, as observed above, could be drawn against the appellants of having carried out dyeing and bleaching of grey fabrics with power operated jiggers and not hand operated jiggers since april, 1995 or earlier to that. the retracted statement of shri shiv ratan das kanodia, proprietor of the appellants firm about the working of power operated jiggers as observed above, did not carry any legal value in the eyes of law for want of corroboration from any other oral or documentary evidence.14. in punjab fibres limited v. cce, delhi, 2002 (141) e.l.t. 819, it has been relied by the tribunal that the clandestine manufacture of goods and clearances thereof cannot be discharged by the department by raising assumptions and presumptions from the stray pieces of evidence.some cogent and tangile evidence is required to be produced for discharging this burden.15. in view of discussion made above, the department has failed to prove that the appellants were carrying out dyeing and bleaching with the power operated jiggers since april, 1995. therefore, the duty from that date could not be legally demanded from them. the appellants, as we find, had paid the duty from 21-5-99, the date of visit of the officers to their factory, till 31-5-99.16. in appeal no. e/2995/02-b filed by the revenue, the learned sdk has contended that the assessee m/s. govind printing works were liable to pay duty on the processes of drawing, scouring, and padding carried out on the grey fabric as they were not entitled to the benefit of exemption notification no. 5/99-c.e., because they were carrying bleaching and dyeing in their factory premises with the aid of power and steam. therefore, the part of the impugned order of the commissioner dropping the duty on the same deserves to be set aside.but this contention of the learned sdr cannot be accepted as no duty demand in respect of these processes has been even raised by the department in the show cause notice. the adjudicating authority has rightly dropped the duty demand on the said processes on the ground that he could not travel beyond the scope of show cause notice.therefore, the impugned order passed by the commissioner in this regard is perfectly valid.17. in the light of discussion made above, the impugned order against appellants firm and its proprietor-appellant, is set aside. the appeals no. 2351-52/01 filed by them are accepted with consequential relief permissible under the law, while appeal no. e/2995/02-a of the revenue is dismissed.

Judgment:
1. The above captioned three appeals have been filed against a common Order-in-Original dated 31-8-2001. The two Appeals Nos. 2351-2352/2001 had been filed by the assessee firm M/s. Govind Printing Works and its proprietor, Shri Shiv Ratan Das Kanodia, while the third Appeal No.E/2995/2002 had been filed by the Revenue.

2. Shri Shiv Ratan Das Kanodia is the sole proprietor of firm of M/s.

Govind Printing Works. He is engaged in the processing of grey fabric falling under Heading 5207 of the CETA. He also carries out drawing, scouring, padding, bleaching and dyeing of cotton fabrics on job work basis. He had been availing the benefit of Notification No. 5/99-C.E., dated 28-2-99, by making declaration under Rule 174 of the Rules that the work of dyeing and bleaching was not being carried out by him with the aid of power and steam. However, on surprise checking by the Central Excise Officers, of his factory on 21-5-1999, it was revealed that, he was carrying out these processes with the power aided jiggers.

However, no finished processed fabric was found lying in his factory.

But he in his own statement recorded at the spot on 21-5-99 and thereafter on 14-9-99 admitted that the processes of dyeing, scouring, bleaching and calendering, etc., of cotton fabrics, were being carried out by him with the power aided machines, since 1988. He also got enhanced/increased his earlier electricity load of 90 H.P. to 101 KVA.The declaration made by him on 12-4-99 under Rule 174 of the Rules, was found to be incorrect. The list of the machines and electric motors installed in the factory premises, by him, was also prepared by the Officers on 21-5-99. The electricity bills for the period October, 1995 to March, 1999 were also procured from KESA, Kanpur which were in his name. On completion of investigation, a show cause notice was served on the firm and its proprietor, Shri Shiv Ratan Das Kanodia, vide which the duty demand for the period 1-4-94 to 31-5-99 on the fabrics processed by them, was raised and imposition of penalty was also proposed therein. The correctness of the show cause notice was, however, contested by Shri Shiv Ratan Das Kanodia as proprietor of the firm, by alleging that prior to 26-4-99 he was carrying the process of bleaching and dyeing without the aid of power and that he purchased four power operated jiggers from M/s. Roshan Trading Co. vide bill No.025 dated 26-4-99 against payment which was duly reflected in his books of account. He also averred that those jiggers were second hand and after getting the same repaired, were installed by him actually on 15-5-99. He also pleaded that the alleged confessional statement was procured from him by the Officers of Central Excise by coercion and torture and that he lodged police report in that regard also. He, further, averred that in his statement recorded firstly on 21-5-99 and secondly on 14-9-99, wherein he allegedly disclosed the details regarding the use of power operated jiggers since 1988, and procurement of purchase bill in respect of four second hand power operated jiggers after the visit of the Central Excise Officers, were taken under duress, and that he retracted those statements. He denied of having made false declaration regarding the non-use of power in carrying the processes of dyeing and bleaching of grey fabric, during the period in dispute for which the duty demand was raised from him in the show cause notice. He also denied that the benefit of exemption Notification No.5/99-C.E., had been availed wrongly by suppressing and concealing the true facts from the Department.

3. The adjudicating authority, however, did not accept the version of Shri Shiv Ratan Das Kanodia, proprietor of the firm and confirmed the duty demand for the period April, 1995 to May, 1999 with penalty under Section 11AC against the firm and also imposed separate penalty on the proprietor, Shri Shiv Ratan Das Kanodia, through impugned Order.

5. We find that by virtue of Notification No. 5/99-C.E., dated 28-2-1999, the processes of drying, scouring, padding of grey fabrics undertaken with or without aid of power, were exempt from payment of duty provided the manufacturer did not had the facility of carrying out the dyeing and bleaching with the aid of power or steam. The benefit of this notification had been denied to the appellants firm and its proprietor, on the ground that they were conducting bleaching and dyeing of the grey fabrics with the aid of power during the period from April, 1995 to May, 1999. To substantiate this ground, reliance had been mainly placed by the adjudicating authority on these facts and circumstances, (i) presence of power operated jiggers in their factory on 21-5-99, the date of visit of the Central Excise Officers, (ii) two confessional statements of Shri Shiv Ratan Das Kanodia, proprietor of firm, (iii) non-entry in the inward register of their factory regarding the receipt of the power operated jiggers on 26-4-99, (iv) the increase in the electricity load from 91 H.P. to 101 KVA, (v) draft ground plan showing the location of the power operated jiggers in the factory, and (vi) statement of one of the 11 suppliers of grey fabrics, namely, Shri Narendra Singh Yadav, stating that the fabrics received from the appellants were processed with the and of power.

6. The Counsel has contended that, the above referred circumstances individually, as well as collectively, could not be taken to be substantial and conclusive evidence against the appellants for bringing home the allegations levelled against them in the show cause notice. On the other hand, the learned SDR has argued that, these circumstances were sufficient to establish the correctness of the allegations made against the appellants in the show cause notice for confirmation of duty and penalty on them.

7. We have considered the respective contentions of both the sides and in our view the contention of the learned Counsel deserves to be accepted. The factory premises of the appellants were visited for the first time by the Central Excise Officers on 21-5-99. Therefore, the presence of four power operated jiggers on that date in the factory premises could not be lead to an irresistible conclusion that the same were installed and put into operation by the appellants in April, 1995 the date from which the duty had been demanded, especially when old hand driven jiggers were also found lying there as is evident from the copy of the list of the machines prepared at the spot by the Officers and when there is also no oral or documentary evidence to substantiate this conclusion. No statement of any employee working in the factory premises at that time, was recorded regarding the installation of power operated jiggers by the appellants since April, 1995. Shri Shiv Ratan Das Kanodia, proprietor at the appellants firm, who allegedly admitted the installation of power operated jiggers since 1988, in a statement recorded on 21-5-99, retracted the same by making the statement before the police on that very date, wherein he explained the circumstances and state of confusion under which the said statement was obtained from him by the Central Excise Officers. He, even later on, produced the copy of the bill No. 025 dated 26-4-99 regarding the purchase of four old jiggers with electric fittings from M/s. Roshan Trading Co.

Thereafter, again his statement was recorded on 14-9-99 wherein he allegedly stated that, this bill was obtained by him from the said firm after the visit of the Central Excise Officers, but this statement too was retracted by him for having procured from him under duress by the Officers.

8. It is well settled that the rectracted statement of the maker, cannot be accepted as substantial piece of document, rather it is to be taken as light piece of evidence needing corroboration from the independent sources before relying upon the same, as ruled by the Hon'ble Calcutta High Court in Manindra Chandra Dey v. CEGAT, 1992 (58) E.L.T. 192 as well as in Jitendra Kumar Ghishulal Jain, 1998 (103) E.L.T. 591. Similarly in State of Maharashtra v. P.K. Pathak, 1983 (13) E.L.T. 1628 it has been also observed that, he retracted confession must be corroborated in material particulars. Therefore, the retracted confessional statements of Shri Shiv Ratan Das Kanodia recorded on two different dates referred to above, could not be accepted as substantial piece of evidence for holding that he installed the power operated jiggers for bleaching and dyeing in the year 1988 without seeking corroboration from any other independent oral or documentary evidence.

No employee of the appellants admitted the installation of power operated jiggers and their operation since 1988 or from April, 1995 the date from which the duty had been demanded. The alleged statement of Shri Shiv Ratan Das Kanodia that he was charging the dyeing charges between Rs. 2 to Rs. 9 per meter from the parties for whom he did the job work and that for scouring and bleaching, he had been charging Rs. 10 per kg. has also remained uncorroborated. These charges had never been found to be entered in any record maintained in the factory by him. No employee of the factory had admitted this fact in the statement. There is also nothing on record to suggest if any of the suppliers of grey fabrics, who got done the work of dyeing and bleaching, had admitted of having paid these charges to the appellants and that the jiggers with power were being operated by the appellants since 1988 or from April, 1995, as alleged in the show cause notice.

9. Similarly, mere increase in the electricity capacity from 91 H.P. to 101 KVA obtained by the appellants from KESA, Kanpur, could not lead to conclusion that the power operated jiggers were installed by them in 1988 or in April, 1995 the date of demand of duty. The copies of electricity bills no doubt were procured by the Department for the period October, 1995 to March, 1999 from the KESA, Kanpur as alleged in the show cause notice, but from those bills it does not stand proved that there was increase in the consumption of electricity by the appellants during that period as compared to earlier periods. This circumstance thus goes long way rather to disprove the allegations of the Department regarding the installation and operation of power operated jiggers by the appellants since April, 1995 or earlier to that since, 1988.

10. The draft ground plan showing the location of electric jiggers in the factory premises of the appellants, also did not provide substantial piece of evidence to the Department for proving the actual working of the same by the appellants since 1988 or April, 1995.

11. We find that during investigation the statements of suppliers of grey cloth for dyeing and bleaching purposes, to the appellants during the period under dispute, from April, 1995 to May, 1999, were recorded but none excepting one supplier, namely, Shri Narendra Singh Yadav of S.B. Fabrics, admitted the use of power by the appellants in the operation of jiggers for carrying out the dyeing and bleaching of their fabrics. Shri Narendra Singh Yadav had a motive to contradict the other supplier's version as he had dispute with the appellants regarding the money transaction and the appellants had even taken out the court proceedings against him for the recovery of the same. Therefore, his uncorroborated statement regarding the use of power operated jiggers by the appellants for dyeing and bleaching purposes since April, 1995 could not be attached any credence. At the time of visit of the Officers, no fabric after going through the processes of dyeing and bleaching on the jiggers, was found lying there. The argument of the learned SDR that the fabrics must be in the process in the jiggers at that time could not be accepted for want of evidence to corroborate the same. Even in the show cause notice, it had not been so alleged.

12. Few lapses/deficiencies in the plea of the appellants such as regarding purchase of power operated jiggers only on 26-4-99 from M/s.

Roshan Trading Co., non-entry in the inward register showing the receipt of the jiggers on that date in the factory and non-appearance of the proprietor, Shri Sarfraj Ahmed of M/s. Roshan Trading Co. who was mainly scrap trader, to accept the correctness of bill dated 26-4-99 issued by him to the appellants regarding the sale of old power operated jiggers, could not be legally made basis for raising presumption for the backward period to hold that the power operated jiggers were installed and commissioned by the appellants, 5 years back. No such presumption for the back period could be legally drawn, especially when no oral or documentary evidence had been brought on record to justify such a presumption. The electricity bills collected from the electricity authority did not show any substantial increase in the consumption of the electricity from April, 1995 onwards the date from which the duty demand has been raised, no statement of any employee of the factory was recorded regarding installation of the power operated jiggers by the appellants in April, 1995 or earlier to that.

13. Even excepting one, no other supplier of grey fabrics to the appellants for bleaching and dyeing, has observed above, has corroborated the version of the department, on the installation and working of the power operated jiggers by the appellants since April, 1995 or earlier to that. Under these circumstances, the presumption for the back period that the appellants might have installed and commissioned the power operated jiggers either in 1988 or in April, 1995 was not warranted by the law. The initial burden was on the Department to prove by cogent, reliable and tangible evidence, the installation of power operated jiggers by the appellants since April, 1995 the date of demand of duty or earlier to that. The holes and deficiencies in the defence of the appellants, could not help the Department in discharging this burden. The appellants have produced the copy of the bill showing purchase of jiggers on 26-4-99 from M/s.

Roshan Trading Co. and also copy of their cash book entries showing the details of payment, made by them to that firm for the purchase of jiggers. They had also produced the Sales-Tax Assessment Order pertaining to that firm and the copy of the statement of account of that firm for the year 1999. The copy of the letter issued by the Commissioner of Income-tax indicating that Shri Sarfraj Ahmed, proprietor of M/s. Roshan Trading Co., was an old assessee. The copy of the Income-tax return for the year, 1998-99 of Shri Sarfraj Ahmed was also produced by the appellants. But if this evidence was taken to be not reliable, still it did not help the Department much in discharging their burden of proving the installation and working of the power operated jiggers by the appellants since April, 1995, the date from which the duty demand had been calculated and demanded from them. No presumption, as observed above, could be drawn against the appellants of having carried out dyeing and bleaching of grey fabrics with power operated jiggers and not hand operated jiggers since April, 1995 or earlier to that. The retracted statement of Shri Shiv Ratan Das Kanodia, proprietor of the appellants firm about the working of power operated jiggers as observed above, did not carry any legal value in the eyes of law for want of corroboration from any other oral or documentary evidence.

14. In Punjab Fibres limited v. CCE, Delhi, 2002 (141) E.L.T. 819, it has been relied by the Tribunal that the clandestine manufacture of goods and clearances thereof cannot be discharged by the Department by raising assumptions and presumptions from the stray pieces of evidence.

Some cogent and tangile evidence is required to be produced for discharging this burden.

15. In view of discussion made above, the Department has failed to prove that the appellants were carrying out dyeing and bleaching with the power operated jiggers since April, 1995. Therefore, the duty from that date could not be legally demanded from them. The appellants, as we find, had paid the duty from 21-5-99, the date of visit of the Officers to their factory, till 31-5-99.

16. In Appeal No. E/2995/02-B filed by the Revenue, the learned SDK has contended that the assessee M/s. Govind Printing Works were liable to pay duty on the processes of drawing, scouring, and padding carried out on the grey fabric as they were not entitled to the benefit of exemption Notification No. 5/99-C.E., because they were carrying bleaching and dyeing in their factory premises with the aid of power and steam. Therefore, the part of the impugned order of the Commissioner dropping the duty on the same deserves to be set aside.

But this contention of the learned SDR cannot be accepted as no duty demand in respect of these processes has been even raised by the department in the show cause notice. The adjudicating authority has rightly dropped the duty demand on the said processes on the ground that he could not travel beyond the scope of show cause notice.

Therefore, the impugned order passed by the Commissioner in this regard is perfectly valid.

17. In the light of discussion made above, the impugned order against appellants firm and its proprietor-appellant, is set aside. The Appeals No. 2351-52/01 filed by them are accepted with consequential relief permissible under the law, while Appeal No. E/2995/02-A of the Revenue is dismissed.