Custom, Excise & Service Tax Tribunal
4. Whether Order Is To Be Circulated To ... vs M/S Moontex Dyeing & Printing Works on 30 May, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
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Appeal No.E/826/2001
Arising out of: OIO No.20/MP/2000, dt.29.11.2000
Passed by: Commissioner of Central Excise & Customs, Surat
For approval and signature:
Mr.M.V. Ravindran, Honble Member (Judicial)
Mr. B.S.V. Murthy, Honble Member (Technical)
1. Whether Press Reporters may be allowed to see the No
Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen
the order?
4. Whether order is to be circulated to the Departmental Yes
authorities?
Appellant:
M/s Moontex Dyeing & Printing Works
Respondent:
CCE Surat Represented by:
None: for Assessee.
Shri J.S. Negi, A.R.: for the Revenue.
CORAM:
MR.M.V. RAVINDRAN, HONBLE MEMBER (JUDICIAL) MR. B.S.V. MURTHY, HONBLE MEMBER (TECHNICAL) Date of Hearing/Decision:30.05.12 ORDER No. /WZB/AHD/2012, dt.30.05.12 Per: M.V. Ravindran:
When this matter is called, there is a adjournment request from the advocate on record on the ground that he has to appear in some other part heard matter before Honble Mumbai Tribunal. However, since the matter has been re-listed as per the direction of Honble President and moreover the appeal pertains to the year 2001, we decline the adjournment request and take up the appeal for disposal.
2. This appeal is directed against the order in original No. 20/MP/2000 dated 29.11.2000.
3. The relevant facts that arise for our consideration are that the departmental officers visited the appellants factory premises on 12.04.1995 and carried out searches. During the course of which, they found unaccounted semi-processed fabrics and processed fabrics lying in the premises. The officers, vide Panchnama dated 12.4.1995 seized the said offending goods and also recovered some incriminating documents from the appellants factory premises and they had also recorded the statement of Partner of the appellant, wherein it was admitted by the Partner that there were illicit removal of the goods. Investigating officers further recorded statements of merchant manufacturers who used to send their grey fabrics to the appellant for processing. After completion of the of investigation, show cause notice dated 19.11.1999 was issued to the appellant seeking recovery of duty amount of Rs. 24,70,054/- and interest thereof and also seeking to impose equivalent amount of penalty. The said show cause notice was contested by the appellant before the adjudicating authority who confirmed the demands and also imposed equivalent amount of penalty, against which the appellant preferred an appeal before the Tribunal. The Tribunal, vide order No. A/2093-2094/WZB/AHD/2007 dated 16.08.2007, remanded the matter back to the adjudicating authority. Aggrieved by such an order, the Revenue filed a Tax Appeal, bearing No. 1907 of 2008 before the Hon'ble High Court of Gujarat and their Lordships, vide judgment dated 05.03.2010 held that the order of the Tribunal is devoid of reasons and hence they are not able to appreciate the correctness of the order or otherwise of the conclusion arrived by the Tribunal. Coming to such a conclusion, their Lordship quashed and set-aside the order passed by the Tribunal and remanded the matter back to the Tribunal to decide the issue. Hence this matter is listed today.
4. Learned counsel appearing on behalf of the appellant would submit that adjudicating authority has erred in relying upon the retracted statement of the Partner of the appellant and that, there was reason for delay of six days in retracting the statement, as there were intermittent holidays, on account of Shri Mahavir Jayanti, Dr. Ambedkar Jayanti etc. It is his submission that the department was also informed about the retraction vide letter dated 18.4.1995. Without prejudice to the said submission, he would submit that the demand of duty is on illicit removals of 12,85,361.70 L. Mtrs. of processed fabrics and the statement relied upon by the Revenue, (which has been retracted) dated 12.4.1995 talks about clearances of only 4,22,292.95 L. Mtrs. as illicitly removed. It is his submission that there is inherent contradiction in the confirmation of demand based upon the statement of Partner of the appellant. It is his submission that the merchant manufacturers who sent goods to the appellants for processing were summoned by the departmental authorities. It is his submission that out of 49 merchant manufacturers, statement of 22 persons were recorded whereas the statement of 27 merchant manufacturers were not recorded and there has been various discrepancies in the annexure which has been relied upon by the adjudicating authority for confirmation of demand. It is also his submission that the departments case is based on Kacha/Pakka Challans and two note books purportedly recovered from the appellants factory. It is his submission that there is no proper investigation done of the annexures arising out of the statements recorded from the merchant manufacturers and the instances recorded in the Kacha/Pakka challans and two note books. As an example, he would draw our attention to the entries at serial No. 2 and 14 of the annexure C of the show cause notice and submit that there are no grey challans found from the premises of the appellant in question of these entries and hence there cannot be any allegation that the clearance was without payment of duty. He would also submit as specimen for supporting this argument, the entries at serial Nos. 19, 20 and 21 of the annexure C to the show cause notice and submit that there is no co-relation between the entries in the private note books and in grey challans forming the basis of allegation of clandestine removal by the appellant. It is his submission that there is inherent contradiction in the statements of merchant manufacturers who had admitted that they had sent the grey fabrics to the appellant, as is brought out from the annexure C, it is his submission that there is no corroboration in the merchant manufacturers statements in respect of the demand raised as per the annexure D to the show cause notice. It is his submission that the allegation of clandestine removal cannot be sustained merely on the basis of private records, in the absence of any positive evidence and would submit that the case which has been made out on the basis of Kacha/Pakka challans and unsigned note books has no evidentiary value.
5. Learned DR would reiterate the findings of the adjudicating authority and would submit that there are evidences which indicate that there is clandestine removal from the appellants factory. He would submit that the Hon'ble Apex Court in the case of D. Bhoormull has categorically stated that, if there is presumption that presumption has to be negated by the assessee and department cannot be asked to prove the clandestine removal with mathematical precision.
6. We have considered the submissions made at length and perused the records. We find from the impugned order in original that the adjudicating authority has come to the conclusion as there was a clandestine removal of the goods based upon the following reasoning:-
(i) That Kacha/Pakka grey challans as well as two note books were recovered from the factory premises of the appellant and comparing the particulars with the particulars described in the note book, it is found that there were receipts of grey fabrics, as described in the Kacha/Pakka challans and there was a confessional statement of Partner on 12.4.1995 i.e. on the date of visit of the officers before the Pancha witnesses.
(ii) He has also recorded that the retraction of statement of the Partner of the appellant is in the form of affidavit which was executed before the Deputy Mamalatdar, Surat on 18.4.1995 i.e. six days after the detection of the case and the time taken for retraction from the original Panchnama is an afterthought and there is change in the mind as the statement clearly indicated that there was evasion of duty.
(iii) That the Kacha/ Pakka challans inter-alia contain particulars such as, name of the merchant manufacturer, date, quality of grey fabrics, total meterage and name of the Mills i.e. the appellant, which led him to believe that the same has been issued by the merchant manufacturer after sending the grey fabrics to the Mill for the purpose of processing and the receipt of the said grey fabrics have been noted in the note books which was maintained by the persons in the grey section of the appellants factory premises.
(iv) That the investigation has brought out on record the unauthorised receipt of processing of grey fabrics and clandestine removal of processed MMF in the documents corroborated by the comparison statement of most of the recipients of the processed MMF and also by confessional statement of the Partner.
7. On perusal of the records, we find that the adjudicating authoritys reasoning of the non acceptance of retraction of the statement of the partner seems to be not in accordance with the law. There is a letter at Page No. 96 of the appeal memorandum, which indicates that the departmental officers were informed about the retraction of the statement by the partner by a letter dated 18.4.1995 wherein the affidavit sworn by the partner before the Deputy Malmatdar, Surat was annexed. Instead of dealing with the said affidavit of retraction, the adjudicating authority has summarily dismissed the same as an afterthought. We find that the lower authorities having not recorded any further statement of the appellant after the receipt of letter dated 18.4.1995. We find that in the absence of any further statement, the statement dated 12.4.1995 of the partner of the firm having been retracted, the evidentiary value of it could be in doubt.
8. Further, we find, even assuming that the said statement would be correct, the said statement records, at the most the clearances of approximately 4.22 Lakhs L. Mtrs. of processed MMF, while the demand of duty is on approximately on 12.85Lakhs L.Mtrs. of processed MMF. There is inherent contradiction of the quantity allegedly cleared by the appellant. We also find that the merchant manufacturers whose statements were recorded and those merchant manufacturers whose statements were not recorded were all considered for the purpose of calculation of the alleged clandestine clearances by the appellant, were without any co-relation and without any substantiation, inasmuch as the impugned order gives the reasoning that the Kacha/Pakka challans indicates receipt of grey fabrics, while the statement of approximately 27 merchant manufacturers were not recorded to corroborate. All these inherent commission and omission has to be properly reasoned out by the adjudicating authority in his findings for confirmation of demand against the appellant. We find that the reasoning given by the adjudicating authority is not addressing all these issues, which were raised before him. In the absence of any such co-relation, we are of the considered view that the issue needs to be reconsidered by the adjudicating authority and hence we set-aside the impugned and remit the matter to the adjudicating authority to reconsider the issue afresh after following the principles of natural justice.
9. Appeal allowed by way of remand.
(Operative part of the order pronounced in the Court)
(B.S.V. Murthy) (M.V. Ravindran)
Member (Technical) Member (Judicial)
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