Customs, Excise and Gold Tribunal - Mumbai
Prempreet Textile Industries Ltd. And ... vs Commissioner Of Central Excise And ... on 20 April, 2001
ORDER Gowri Shanker, Member (T)
1. The application by Prempreet Textile Industries Limited, the manufacturer (E-Stay-251/2001), is for waiver of deposit of duty of Rs. 1.40 crores approx. and of penalties imposed under Rule 173Q(1) and Section 11AC totalling Rs. 67 lakhs. Applications by Premal Madhusudan Vora (E-Stay-417/2001), director of the manufacturer; Hemendra Laxmichand Shah (E/Stay-418/2001), administrative officer and Parmar Singh (E/Stay-416/2001), technical manager of the manufacturer are for waiver of deposit of penalties imposed on them under Rule 2209A of Rs. 1 lakh, Rs. 50,000/- and Rs. 50,000/- respectively. The duty has been demanded, and penalties imposed, on the finding of the Commissioner that the penalties imposed, on the finding of the Commissioner that the manufacturer cleared approximately 2.43 tonnes of polyester filament yarn (PEY) without paying the duty payable on it.
2. We have heard both sides.
3. The manufacturer is engaged in the manufacturer of polyester filament yarn (PFY for short) by drawing partially oriented yarn (POY for short). He is also engaged in the twisting of either untwisted yarn or yarn which has already been subjected to twisting. For this purpose, he employed a draw-twisting machine and four twisting machines. A draw-twisting machine is capable of drawing yarn as well as imparting twist to such drawn yarn; it can also be used only to twist yarn. Twisting machines are only capable of imparting twist to yarn. The primary evidence on which the department has proceeded is a register maintained by Parmar Singh, referred to as the creel account, with regard to the operation of the draw-twisting machine. The officers, on a visit, found that some of the entries in the register with regard to supply of PFY had been scored off and replaced by letters 'JH', 'JT', 'JKT' and 'JY'. The officers questioned Parmar Singh and other persons with regard to these entries and obtained form them statements in which each of them admitted that entries against these initials referred to quantities of POY which had been used to manufacture PFY which was cleared without payment of duty. It is on the basis of this document and the statements that the Commissioner has come to his finding of manufacture and removal of goods without payment of duty.
4. The contentions of the counsel for the applicants are these: The statements of the three employees were retracted very next day in one case and on the day after in the other two cases, on the ground that they were obtained from them late at night by threats of arrest. Relevant column in the register is not only for POY received which was to be subjected to draw twisting, but also mentions whenever twisted yarn was received for further twisting. These are the entries referred to as TPM i.e., twist per meter. Half of the persons who were named by Sasidharan Menon to have been supplied imported yarn referred to int he register by these entries, whoever contacted by the department have denied any sale of such yarn. The Commissioner does not record whether the other three alleged suppliers were contacted and what they had said. This register alone is therefore insufficient to establish illicit removal. There is no corroboration to this register. Accordingly the decision of the Tribunal in Ebenezer Rubbers Ltd. Vs. CCE 1986 (26) ELT 997 and Premier Packaging Pvt. Ltd. Vs. CCE 1986 (26) ELT 333 and others to the effect that in the absence of corroboration, private record found from the manufacturer's premises is insufficient to establish removal of goods without payment of duty. He says that he facts of these cases are closely aligned to the facts which the Tribunal has considered in its decision in Kirtibhai Maganbhai Patel Vs. CCE 2000 (36) RLT 211 concluding that private records are not enough to prove illicit removal will apply.
5. He says that eh manufacturer has deposited s. 20 lakhs during the course of investigation towards duty in response to a suggest from the department that duty was payable on the twisted yarn. A claim for refund of this amount was filed on the ground that no such duty was payable. He undertakes, on instruction, not to pursue the refund claim during the pendency of the appeal.
6. The departmental representative relies upon the reasons that the Commissioner has advanced. He contends that there is no satisfactory explanation as to the origin of the yarn by reference to these initials and points out although the register contains a column for showing quantities of twisted yarn, no figure has ever been entered against it leading to the conclusion that whatever yarn was received was only drawn.
7. The Commissioner has declined to accept the retractions of the admissions made in the statement of the employees on the ground that they have made only before the Superintendent who recorded statement and not a senior officer. This fact, in our view, is entirely irrelevant. The retraction shows the intention of the person making it to place on record his protest that his recorded statement was not voluntarily given by him, and, the level of the officer to whom it was filed is irrelevant. The fact remains that the retraction was made on the very next day in one case and two days later in the other two cases.
8. It is claimed that these three employees were subsequently summoned up by the department and in their statement reiterated what they said in the retraction of the earlier statement, that there was no manufacture or illicit removal of PFY. Although the Commissioner records that no such statements were recorded copies of these statements form part of an affidavit of that was produced before us. It is therefore difficult prima facie to accept the Commissioner's conclusion that subsequent statements were not recorded. The Commissioner has also not dealt with the claim made by the manufacturer that the entries in the purchase register showing purchase of the twisted yarn were in fact tally with the difference between the quantities shown in the yarn register and the RG-1 register.
9. In the light of these views on our prima facie consideration and on our view that the ratio of the decisions of the Tribunal with regard to evidence corroboration of private records would apply to the facts before us, we do not think any further deposit than what has been made is required. Hence taking note of the undertaking given by the counsel for the applicants, we waive deposit of the remaining amount of duty and penalties imposed.
10. We accept the prayer made by the counsel for the applicants for out of turn hearing and list appeals for hearing on 3rd July, 2001.