Custom, Excise & Service Tax Tribunal
M/S K.K. Spinners Pvt. Ltd vs Cce, Rohtak on 1 September, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. II DATE OF HEARING : 01/9/09. Excise Appeal No. 515 of 2006 M/s K.K. Spinners Pvt. Ltd. Appellant Versus CCE, Rohtak Respondent Excise Appeal No. 516 of 2006 Shri B.L. Bansal, Director Appellant Versus CCE, Rohtak Respondent Appearance Shri Atul Gupta, C.S. for the appellant. Shri Vijay Kumar, Authorized Representative (SDR) for the Respondent. CORAM : Honble Shri D.N. Panda, Judicial Member Honble Shri Rakesh Kumar, Technical Member Order No. ________________ Dated : ,,,,,,,,,,,_____________ ORDER
Per. D.N. Panda :-
Shri Atul Gupta, learned C.S., submits that the appellant had cleared the goods in reel hanks as well as in cone. But Department has made allegation that the goods were cleared as yarn in cones to make undue gain out of benefit given by Notification No. 8/96-CE dated 23/07/1996. There was no evidence against the appellant to suggest that the appellant had cleared the goods in such manner. Whenever there was requirement, goods were also cleared in accordance with customers requirement. Revenue has used oral evidence of Shri Rakesh Kumar and Shri Sunil Kumar to come to the conclusion that the goods were cleared in the cone form. The appellant had grievance before the authority for an opportunity to cross examine these two witnesses of revenue. But that was not allowed. He submits that appellants own statement recorded does not speak against the appellant and that should have been considered. The appellant has explained manner of clearance of the goods depending on the facts and circumstances of clearance and need of buyers. Therefore, he submits that mere reliance on the statements of above two witnesses of revenue shall not bring a case against the appellant to hold clearance made in plain reel hanks. He further submits that when basis of entire allegation was a diary and that diary was not relied by the authority below, no statement of witnesses of revenue can be used against the appellant. He relies on the decision of the Tribunal in the appeal case of M/s H.B. Wooltex (P) Ltd. vs. CCE, Gurgaon disposed by final order No. 304/08-SM (BR) dated 28/01/08 [appeal No. E/2182 of 2006 (SM)] and also the decision of the Honble High Court of Punjab and Haryana in the case of CCE, Rohtak vs. M/s H.B. Wooltex (P) Ltd. in C.E.A. No. 7 of 2009.
2. Learned DR Shri Vijay Kumar submits that oral evidence of Shri Rakesh Kumar and Shri Sunil Kumar appearing at page 2 and 3 of the order-in-original brings out the trade practice and the manner how goods are bought and sold. Goods sold are only used when that is in cone. Therefore no buyer would prefer to purchase the goods in hanks. Learned Commissioner (Appeals) in para 10 has brought out the modus operandi that has been followed to suppress the fact and mislead investigation. Therefore the appellant was rightly dealt by the order-in-original.
3. Heard both sides and also we have gone through various documents referred to by both the sides in the course of hearing. At the very outset we have noticed that in the decision of the Honble High Court of Punjab and Haryana, there was no question of law involved. The matter involved in that case being question of fact, revenues appeal was dismissed. We examined submission of both sides on the light of Tribunals decision in the case of H.B. Wooltex (P) Ltd. and found the decision had fully based on the evidence recorded. Evidence being weighing consideration in that case, we have looked present case on the basis of material on records.
4. There is no material on record to suggest that the statements recorded from Shri Rakesh Kumar and Shri Sunil Kumar going against the appellant is impeachable in absence of any allegation of malafide when the appellant submits that statement recorded under Section 14 of Central Excise Act, 1944 is reliable.
5. There is nothing malafide brought out by the appellant to show that the statement recorded from Shri Rakesh Kumar and Shri Sunil Kumar was not reliable. When the appellant claims that his own statement was recorded properly by revenue authority, there cannot be any grievance as to manner of recording of evidence from the two witnesses of revenue. In absence of any malafide or any element of bias, oral evidence of Shri Rakesh Kumar appearing at page 2 and evidence of Shri Sunil Kumar appearing at page 3 of the order-in-original are credible. Shri Rakesh Kumar has categorically stated his better experience about the necessity of the textile industry in that paragraph and has brought out that cotton yarn were purchased by mills including the present appellant and those are in cone form only. Similarly, Shri Sunil Kumar at page 3 of the order-in-original has spoken that the goods are received in the cone form. For convenience of reading, relevant portion of statement recorded from Shri Rakesh Kumar is reproduced, as under :-
Shri Rakesh Kumar, Prop. Of M/s Tushar Textiles, Muradnagar and also the owner of Godown situated at Kashba Road, Krishna Colony, Muradnagar in his statement dated 23.05.2000, inter-alia, deposed that he was the Proprietor of M/s Tushar Textiles, Muradnagar, a power loom unit for weaving of cotton fabric. He further stated that their family members were having six powerloom units viz. M/s Tushar Textiles, Muradnagar (Prop. Rakesh Kumar), M/s Aarti Handloom (Owned by Sh. Subhash Chandra elder brother of Rakesh Kumar), M/s Aarti Textile (Owned by Atul Garg, Nephew of Rakesh Kumar), M/s Shivam fabric (Owned by Smt. Sunita W/o Younger Brother of Sh. Rakesh Kumar), M/s Sumitra Textile (Partner are Ashok Kumar, brother of Rakesh Kumar and his wife Sumitra Devi) and M/s International Fabric (Owned by Sunil Kumar, younger brother of Sh. Rakesh Kumar), all located in Muradnagar. Sh. Rakesh Kumar further clarified that the Cotton yarn was purchased by the aforesaid mills from various yarn manufacturers of Panipat including M/s KKSPL. Further, the yarns purchased and received by all aforesaid Mills were always in the cone form. In addition of aforesaid powerloom units they owned a yarn doubling unit in the name and style of M/s Sheela Spinning Mills, Muradnagar (owned by Smt. Sheela Devi mother of Rakesh Kumar) and also a trading unit M/s Garg Yarn Traders, Muradnagar (Owned by Sh. Jagdish Garg, father of Rakesh garg.) Also for advantage of reading, it would be proper to reproduce relevant portion of the oral evidence of Shri Sunil Kumar, which reads as under :-
Shri Sunil Kumar S/o Smt. Sheela Devi (Prop. Of M/s Sheela Spinning Mills, Muradnagar) Manager of M/s Sheela Spinning Mils, while listing out various power loom units owned by their family members in his statement dated 23.05.2001 deposed that he was Prop. Of M/s International Fabrics; that they were engaged in the manufacture of cotton fabric on power loom for the purpose of which manufacture, the yarn in cone form was received from various yarn manufacture of Panipat, including M/s KKSPL, even though in the covering invoices, the description of yarn were shown as yarn in PRH; that the yarn suppliers had in the beginning put a condition that they would supply yarn in cone but the bills would be for yarn in PRH. He further clarified that M/s Sheela Spinning Mills, Muradnagar was engaged in doubling of yarn; that the yarn for doubling was received in cone and sold in cone after doubling; that in doubling, yarn in PRH cannot be used. He also stated that M/s Garg Yarn Trader was their trading firm, had traded yarn from the firms in UP only i.e. M/s UPSTC Ltd., Kanpur and M/s Alps Industries, Mohan Nagar on commission basis.
4. Reading of the oral evidence of Shri Sunil Kumar, a man of ordinary prudence and diligence can appreciate how the industry better works with yarn in cone only. He has categorically stated that the yarn is supplied in cones while bills show the yarn sale in PRH. Such a significant evidence received attention of the learned Commissioner at para 10 of the Appellate order and remained unrebutted. When such material evidence is on record we are unable to appreciate that activity of the appellant was as claimed by him but remained questionable. It can be held that the buyers require goods in cone only for the advantage of manufacture and economic operation. Therefore, the appellant has no scope to succeed in its appeal in view of evidence on record going against it.
5. For the findings and observations made above, we do not interfere to the order passed by the learned Commissioner (Appeals), for which, that order sustains.
6. In the result, both the appeals are dismissed.
(Dictated and pronounced in open court) (D.N. Panda) Judicial Member (Rakesh Kumar) Technical Member PK