Customs, Excise and Gold Tribunal - Mumbai
Prempreet Textile Industries Ltd., ... vs Commissioner Of Central Excise, ... on 17 July, 2001
Equivalent citations: 2001(134)ELT691(TRI-MUMBAI)
ORDER
Gowri Shankar, Member (Technical)
1. Prempreet Textile Industries Ltd is engaged in the manufacture of polyester filament yarn (PFI for short) by drawing partially oriented yarn (POY for short). It is also engaged in subjecting either untwisted yarn or yarn that has already been subjected to some degree of twist. The appellant had installed in its factory a draw twisting machine and four twisting machines. Draw Twisting Machine only subject the yarn a process of drawing. The other machines only capable of imparting twist to yarn. Twisted yarn made out of untwisted yarn is exempted by notification 35/95 as amended by notification 8/96. The process of drawing of PFY by drawing POY is liable to duty.
2. The officers of the department, visited the appellant's factory, searched the premise and recovered various records. We are only concerned with one of the documents referred to as creel register. The show cause notice records that this register contends that was recovered from the table of Premar Singh, Technical Manager. He was interrogated with regard to entries in this register. I his statement recorded on 9.3.1997, he explains entries in the register. He said entries relating to PFY drawn out of POY, duty on which had not been paid, and the details are not entered in the RG1 register. H.L. Shah, administrative officer, Shashidharan Menon, sales manager also in their statements confirmed this version. It is on the basis of this evidence that notice was issued demanding duty on goods allegedly removed without payment of duty and proposing penalty resulting in the order of the Commissioner impugned in the appeals before us. The Commissioner finds that the register indeed contain entries relating to manufacture and removal of yarn without payment of duty. For corroboration, he finds the three statements.
3. The senior counsel for the appellant first questions the admissibility of the register as evidence. he says that it is in the nature of some private records, the ownership of which has not been established and it has therefore no evidentiary value. he cites the decision of the Tribunal in Deena Paints vs CCE 2001 (43) RLT 805 and the decisions that this decision rely upon. He alternatively contends that the entries in the register did not in fact support the conclusion that the Commissioner has arrived at. He further contends that Premar Singh, H.L.Shah and Shashidharan Menon retracted their statements the very next day by filing affidavits before the officer who recorded their statements. Their statements therefore cannot be relied upon. He emphasises that there is no other evidence than this. The investigation conducted has not considered an gone into the source of the POY, PFY or disposal of the PFY that is alleged to have been manufactured.
4. The departmental representative's answer is that the creel register contains the details relating to removal of the goods. He questions the retractions filed by the three person who gave there statements on the ground that they have not filed before the authority higher than the officer who recorded that statements.
5. We will proceed to examine first the alternative contention of the appellant. The register contains the following columns - Denier/filament; lot number; receive date; issue date; POY base and merge no.; TPM/POY issue quantity; bottom issue; total; POY/TPM PFY issue; PFY received from plant; PQ; for twisting; bottom received from plant; total PFY; waste.
6. It was explained to us by the senior counsel for the appellant that TPM stands for twist per metres relating to twisted yarn; bottom issue relates to the end portion to the last remaining portion of bobbins yarn which itself is too short to put on the machine. PQ stands for print quality, inferior quality of the PFY; the entries which the Commissioner has found suspicious and relied upon for his conclusion of illicit removal those in this register in which he finds that some abbreviations are used such as TY, JK JT etc. He distinguishes the entries from the other entire sin which the supplier's name is more clearly made Jindal, Petrofils etc.
7. From the statements recorded Parimal Vora, director of the company in the course of investigation. In his statement dated 24.4.1997 he explains that draw twisting machine is used not only for drawing PFY. he says on being asked regarding the purpose behind purchase of twisted yarn retwisting in our factory on the twisting machine and only winding on D.T. machine of our factory, I stat that following are the benefit of retwisting and winding on D.T. machine. This was explained to us by the counsel for the appellant to say that in cases where a particular length of yarn either twisted or untwisted is required to be worn to a smaller one such as cone or bobbin on to larger cups, the drawing machine is employed. Twisting machine do not have the facility to take a larger metal coke. Therefore, the register contains entries not only of PFY from which POY is drawn, but also yarn twisted or otherwise which is unworn. This explains the entry "TPM/POY". The first referred to twisted yarn and the second untwisted polyester yarn. If that is the case, it would then be not possible to come to the conclusion that the Commissioner arrived at from the entries in the register or not. To do so, the entries in the register relating to drawing of the yarn will have to be segregated from other entries relating to twisting. As it stands now, it is not possible to say that any particular entry refers to any one of these two activities. Columns for twisted yarn and untwist yarn it will bear repetition will be the same. This contention reiterating that part of the statement Parimal Vora was raised in the reply filed by the appellant to the notice, as recorded by the Commissioner in his order. He has however not rebutted the value of this register containing entire relating to clandestine manufacture and removal is therefore highly questionable.
8. The Commissioner relies the statement of Parmar Singh and other employees as corroboration. One day after the statements were recorded, each of these person field the retraction of the admission made by him on the ground that they were made following threat of arrest. The Commissioner accepts the fact of such retraction, but declined to accept them on the ground that they were made before the same Superintendent who recorded their statements We are not able to understand how this fact vitiate the value of the retraction that they have made. There is no requirement in law that a retraction has necessarily to be filed before any person other than the person before whom the admission were made. By its very nature, the retraction by a person of his statement is questioning the admission that he earlier made. As long as it is seemed to have been made by him and submitted to the departmental authorities, who has something to do with the investigation, it is irrelevant the level at whom it is made. The Commissioner's view may be correct against conduction an enquiry of the officer. it is however perfectly possible for a person for reasons not to proceed with the complaint of ill treatment or harassment while he wishes to make his own stand clear. This is what all these person have done. There has been no delay in relation to the retraction and they have retracted on the next day after it has been made.
9. The counsel for the appellant contends that in act a statement was subsequently recorded by the officers in which they maintained their stand contending the retraction. The ground for not accepting the retraction is therefore baseless. It would then follow that the attempts made by them also become questionable.
10. In his statement dated 10.3.1997 Shashidharan Menon has named these person as being one who supplied the imported POY and eight persons as the purchaser of the resultant filament yarn which were cleared without payment of duty. The department's investigation included questioning three suppliers out of eight of the POY and Mangalam Industries, Goel Synthetics Pvt. ltd. and Akash texturisers Pvt. Ltd. all in their statements recorded by the officers having denied supply any POY. The department's enquiries did not extend issuing summons to the alleged purchasers of the POY. The Commissioner finds that these person did not respond to the summons within a reasonable period. The counsel of the appellant relies upon their affidavit to say that they turned up. Whatever the position is, the fact remains that the department's enquiries did not extent to obtaining confirmation from the purchasers. The explanation tendered by the Commissioner that they did nt appeal is not acceptable. Once it is accepted that these were and existing entity, it not having responded to summons (if that is the case) should not have stopped the investigation. The department had enough powers in law and other powers and men enforce its will but it has chosen not to do so, which leads to an inference against it.
11. Apart form this, there is merit to be found int he contention of the counsel for the appellant that it has not been established to the degree of probability required, that the register was in fact maintained by or under the orders of the manufacturer.
12. The Commissioner's order though quite lengthy is in fact a repetition of his reliance upon the evidence of the register and the three statements. he accepted that there is no direct evidence of removal of yarn without payment of duty. We are unable to share his perception that the evidence in this case is sufficient to come to the conclusion that he has arrived at. Our analysis of the evidence above leads us to the conclusion that the case against the manufacture has not been established to the required degree of probability.
13. In the light of this finding, we set aside the demand for duty and penalties imposed upon each of the appellant and allow the appeals. Consequential relief.