COMMISSIONER OF C. EX. Vs. MURUGAN ENTERPRISES

JUDGEMENT

(1.) This is a revenue appeal against Order -in -Appeal No. 29/2002 (M -II), dated 2 -4 -2002 passed by Commissioner of Central Excise (Appeals) setting aside the Order -in -Original confirming the demands solely on the basis of statement recorded from the proprietor of the respondent concern with regard to manufacture and clearance of goods clandestinely. Before the Commissioner, the contention raised was that these statements were not voluntary and there was no corroborative evidence to show that there was purchase of raw materials, employment of labour, installation of machinery, manufacture and sale of final product EVA coated fabrics clandestinely. The demands were made on the presumptions and assumptions and demands cannot be confirmed solely based on statements and even in a situation where the statements were contradictory. Commissioner after due consideration and examination of the records accepted the appellant's contention that there were several contradictions in the statement and there was no evidence available to show that there was purchase of raw materials, capacity to produce goods, power consumption, employment of labour, payment made for raw materials, purchase and realisation of sale proceeds of the final product. He has also noted that there was no statement of any customers recorded. He also noted that the reading of the statement in its entirety would show that the persons have contradicted their earlier portion of the statement at the latter portion. He also noticed that the statements are not supported with any corroborative material evidence. He has noted that the case has been built on presumption and assumption on which basis demands cannot be confirmed. He has also quoted large number of judgments rendered by the Tribunal, wherein such demands were all set aside in the absence of corroborative evidence.

(2.) The revenue has not raised any ground on the findings given by the Commissioner except the voluntary statement given by the parties to the Customs/Central Excise officers. The officers need not be proved as there is no presumption that they were made under coersion. In this regard they rely on the judgment rendered by the Apex Court in the case of ACC, Rajamundry v. Duncan Agro Industries Ltd. as reported in 2000 (120) E.L.T. 280 (S.C.). He also relied on the ruling rendered in the case of K. Manickam v. CCE, Coimbatore as reported in 2000 (117) E.L.T. 371, wherein allegation of clandestine removal was held to be substantiated in terms of the statement recorded and the details found in the private account books. The retraction of the statement was not acceptable and the Magistrate had noted that the statement had been given voluntarily. DR Shri A. Jeyachandran prays for accepting the statement for confirming the demands in the light of the Apex Court judgment.

(3.) Counsel Shri T. Ramesh points out that the statement have been found to be contradictory and was not reliable. He points out that the settled law is that the revenue has to place evidence with regard to purchase of raw material, production capacity, power consumption, labour employment, utilisation of funds, sale of goods, etc. which was not available for confirming the demands. He pointed out that in the cited case the revenue referred to a position, where there was no contradiction in the statement and the statements were true and correct. The same position exists in K. Manickam v. CCE, Coimbatore (supra) case. While in the present case it is clearly found that the statements were contradictory and not reliable. Therefore, he submitted that there is no infirmity in the order passed by Commissioner (Appeals).