HARICHAND KIDARNATH KHANNA AND Vs. CCE

JUDGEMENT

(1.) THE above captioned appeals have been filed against the common Order -in -original dated 24.2.94 vide which the Commissioner of Central Excise, ordered the confiscation of the seized goods and confirmed duty and imposed penalties on them, as detailed therein.

(2.) APPELLANT No. 1 is a firm, while appellant No. 2 is its partner. They are engaged in the business of processing textile fabrics. On interception of one truck on 6.2.91, near octroi naka thane which was loaded with the goods, the Central Excise officers raided the factory premises of the appellants on the plea that they were indulging in clandestine removal of the gods, without payment of duty. The officers collected record from the transporters through whom grey fabrics used to be received by the appellants and on the basis of that record and other document furnished by the transporters, the officers came to the conclusion that grey fabrics and finished goods were not accounted for, by the appellants. The statements of various representatives of the transporters and also of the appellant nos. 2 firm wee also recorded. On completion of the investigation, show cause notice was served on the appellants and some other notices named therein, proposing confiscation of the man made fabrics seized from the truck, confirmation of duty on the grey fabrics processed and cleared by them during the period April, 89 to February, 91. The imposition of penalty was also proposed in the show cause notice. The appellants, however, controverted the allegations made in the show cause notice. They alleged that the record furnished by the transporters was bogus and lacked material facts, such as, vehicle numbers and other details. They also averred that chits/documents recovered from the house of Jaya chandran wee forged and did not carry any credence. They denied of having ever received grey fabrics and cleared final products, in a clandestine manner. The Adjudicating Authority, however, did into accept the version of the appellants and passed the impugned order.

(3.) THE learned counsel has contended that there is no cogent material evidence on record to substantiate the allegations of clandestine receipt of the grey fabrics and thereafter clearance of processed fabrics in a clandestine manner, by the appellants, during the period in question. The statements of the witnesses and the documents relied upon by the adjudicating authority are inadmissible in evidence and could not be used against the appellants. No shortage of the raw material or finished goods was detected in the factory of the appellants. Even, excepting 61 pieces, no excess stock of processed fabrics was found in the factory of the appellants. Rather, entire fabrics was found entered in lot register and RG -1 of the appellants, at the time of inspection. The counsel has also contended that alleged evasion being only of additional duty of excise under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, neither the goods could be confiscated nor any penalty could be imposed in view of the Apex Court judgment in Pioneer Silk Mills (P) Ltd. Vs. Union of India (2002 -145 ELT -A74). Therefore, the impugned order deserves to be set aside.