- (1.) This appeal filed under Section 35G of the Central Excise and Salt Act, 1944 challenges order dated 2-8-2004 passed by the Customs Excise and Service Tax Appellate Tribunal, New Delhi in Appeal No. E/977-979/04 NB(C). The Revenue has claimed that following two questions of law would emerge from the order of the Tribunal for our determination : (a) Whether CESTAT was correct in holding that there was lack of evidence in the matter ? (b) Was the proof led by the department not sufficient to establish the probability, to a required degree, to prove that respondent no.1 was manufacturing and removing the excisable goods clandestinely; and since the respondent no.1 has not effectively disproved the evidence led by the department, was the Tribunal legally correct to arrive upon the decision delivered vide the impugned order in divergence of earlier decision taken in the case of Roxy Enterprises Pvt. Ltd. v CCE, Delhi,1992 4 ECR 361(R)?"
(2.) Facts are not in dispute. The assessee is engaged in the processing of Cotton and Man-Made Fabrics and is based at Faridabad. The officers of the Directorate General of Anti Invasion visited the factory premises of the petitioner on 14-9-1999 and they recovered certain records/documents alleging the same to be incriminating in nature. Some small size note books allegedly showing the details of fabrics cleared by the assessee to various customers is also stated to have been recovered which covers the period commencing from 14-9-1998 to 29-10- 1998. It was further alleged that some medium size note books each containing 1 to 100 pages (carbon copies) were also recovered which allegedly revealed the details of clearance to various customers. In a statement recorded under Section 14 of the Central Excise Act, 1944 on 14-9-1999, Shri Rahul Keshwani, authorised signatory is alleged to have stated that the note books show the details of the party-wise work done in their factory which would tally with their despatch and other statutory records. He was again examined on 9-8-2000 when he alleged to have re-tracted from his earlier statement by stating that the note books did not pertain to their unit. It is further alleged that name of the firm M/s. N.G. Enterprises, Delhi appeared in the nolo books and on 17-8-2000 the statement of Mr. Nikhil Kumar Govila, proprietor of the firm was recorded. In his statement he had inter alia stated that he used to get the gray/man-made/ coton fabrics dyed from the assessee. The adjudicating authority found that the central excise duty of Rs. 41,34,850/- had not been paid and confirmed the demand vide order in original dated 4-12-2003 (Annexure A.1). The assessee filed appeal before the Tribunal. The order in original dated 4-12-2003 was set aside by the Tribunal vide order dated 29-7-2004 (Annexure A 2) primarily, on the basis of the finding that the note books recovered on 4-9-1999 did not belong to the assessee (Annexure A.3). The view of the Tribunal is discernible from para 4 of its order which reads as under : "We have considered the submissions of both the sides. The demand of duty has been confirmed against the appellants and the penalties have been imposed on them on the basis of the entries of the goods manufactured and cleared mentioned in the note books. It has not been disputed by the Revenue that the Panchnama dated 14-9-1999 mentions seizure of 5 numbers of Jindal duplicate Note books' whereas note books supplied to the appellants are Bindle duplicate notebooks'. It has also not been disputed by the Revenue that none of these note books were carrying the signature of any of the persons in whose presence these note books were seized i.e. neither the signature of the panchas nor any officer of the appellant-company nor the signature of Central Excise Officers who had seized the same. The Appellants main contention is that these note books do not belong to them. In view of the fact that the name of the note books mentioned in Panchnama differs from the notebook supplied to the appellants and there being no signature of any person to show that these were the same books which were seized from the factory premises of the appellant-company, a reasonable doubt has been created about the genuineness of these notebooks. In the impugned Order a reference has been made that Rahul Keshwani in his statement dated 14-9- 1999 has deposed that clearances mentioned in the seized books would tally with the clearances mentioned in RG I register, and it is also mentioned in the impugned order that as the statutory record i.e. RG I register was not submitted by the Appellant at the time no cross checking of the seized private records with the RG I could be done at that time. A perusal of the statement of Rahul Keshwani reveals that it was with reference to books recovered from the factory premises. It was not with reference to any specific register or record. It was merely a general statement. Further, he has specifically mentioned that the details therein would tally with their statutory records. The learned Advocate has rightly emphasised that the RG I register was also seized on 14-9-1999 itself as it appears that as one of the seized register at srl. no. 24 of the Annexure to Panchnama. We also find force in the submissions of the learned Advocate that none of the customers mentioned in the note book was contacted by the Department nor any evidence had been brought on record as to how the alleged goods were sent to them. No question seems to have been put to Shri J.P.Keshwani, Director, about the entries made in the note books nor his statement was recorded on 14-9-1999 itself. No material evidence has been brought on record as to the procurement of the raw material for effecting the alleged production in respect of which duty has been demanded from the appellants. It has been consistently held by the Tribunal that the clandestine removal has to be proved by evidence such as purchase and utilisation of raw material, labour employed, power consumption etc. The learned Advocate has referred to some such decisions. The statement of Shri N.K. Govila can also not be relied as he was not made available for cross examination by the Appellants. In the absence of any corroborated material brought on record by the department, the demand of duty on the basis of note books alone cannot be sustained more so when the appellants has created a reasonable doubt about these beings the same note books which were seized from their premises during search on 14-9-1998. Thus the Revenue has not succeeded in establishing the clandestine manufacture and clearance by the appellants. Accordingly we set aside the impugned order and allow all the three appeals."
(3.) We have heard learned Counsel for the parties at a considerable length and find that no question of law would emerge for our determination. The Tribunal has found it as a fact that the alleged note books did not find mention in the panchnama and infact differ from the note books supplied to the assessee. It was further found that no signatures of any person to show that these were the same note books which were seized from the factory premises of the assessee. The Tribunal resultantly entertained a doubt about the genuineness of the note books. The Tribunal also examined in detail the statement of Rahul Keshwani by concluding that no question was put to him about the entries made in the note books nor his statement was recorded on 14-9-1999 itself. The Tribunal concluded that clandestine removal has to be proved by evidence such as purchase and utilisation of raw material, labour employed, power consumption etc. The statement made by Shri N.K. Govila was also ignored as he was not made available for cross-examination of the assessee. Accordingly additional demand of duty on the basis of notebooks was not sustained by the Tribunal.;