HARYANA PETRO CHEMICALS LTD. AND Vs. CCE

JUDGEMENT

(1.) All the above captioned appeals have been preferred against the common order -in -original dated 23.1.2001 vide which the Commissioner had confirmed the duty demand against the Appellants No. 1, M/s. Haryana Petrochemicals Ltd., along with the penalty and also imposed penalties on the order appellants of various amounts as detailed in the order itself.

(2.) M/s. Haryana Petrochemicals Ltd. (hereinafterreferred to as 'HPL ) is engaged in the manufacture of Polyester Yarn (non -textured) of different deniers and grades. The company during the period April 1994 to June 1995 clandestinely manufactured and cleared 3,82,962 kgs. of Polyester Yarn of different deniers and grades to M/s. Emmtex Synthetics Pvt. Ltd. While during the period January 1995 to June 1995, the company clandestinely cleared these very goods valued at Rs. 41,33,070 to M/s. Globe Synthetics Ltd. (hereinafter referred to as 'GSL'), Appellant No. 2, without the cover of invoices and without paying Central Excise duty in respect thereof. Shri Rajeev Agarwal, Appellant No. 3 was working as a Joint Managing Director of the company, M/s. HPL, during that period and was responsible for the conduct of the business of the company. Similarly, Shri Rakesh Gupta, appellants No. 4 M.D. of the company, GSL, was also involved in the sale of the polyester yarn weighing 422885 kgs. by the company, HPL, to the company, GSL, appellant No. 2, as well as to M/s. Emmtex Synthetics Pvt. Ltd. (not appellant in the present appeal). Shri B.M. Gupta, Appellant No. 5, was then Vice -President of the company, HPL, and he was concerned in the manufacture and clearance of the goods of the company without payment of duty. All the appellants were accordingly served with a show cause notice vide which the duty demand for the clandestine manufacture and removal of the goods was raised from the company, HPL, and penalties were proposed to be imposed on the other appellants under Rule 209 -A. That notice was, however, contested by all the appellants wherein they denied the allegations made against them. Shri B.N. Gupta, appellant, also maintained that his statement wherein he allegedly deposed that entries in the personal diary and loose sheets recovered from him, were made at the instance of Shri Rajeev Agarwal and Shri Rakesh Gupta, appellants, was recorded under duress and he later on retracted the same. The company, HPL, denied of having manufactured and cleared the goods without payment of duty and similarly recipient company, GSL, also denied the receipt of the goods in a clandestine manner from the company, HPL, with the knowledge of having cleared by that company, without payment of duty. The Commissioner however, did not accept the version of any of the appellants and passed the impugned order against them.

(3.) The learned Counsel has contended that there is no reliable evidence on the record to prove that company, HPL, had indulged in the clandestine manufacture and removal of the goods, to the company, GSL. The impugned order had been passed only on assumptions and presumptions drawn from the inconclusive and inadmissible evidence. The statement of Shri B.M. Gupta, appellant, according to the learned Counsel, could not be used against any of the appellants having remained uncross -examined and uncorroborated from other reliable evidence. On the basis of mere entries in the diary and loose sheets found from Shri B.M. Gupta, no legal presumption about the manufacture and clearance of the goods in a clandestine manner by the company, HPL, could be legally drawn for want of corroboration from other evidence, especially when Shri B.M. Gupta retracted his statement having been obtained from him under duress and even failed to disclose the source on the basis of which the entries were made by him in those documents. His statement of having made the entries on the instructions of Shri Rajeev Agarwal and Shri Rakesh Gupta, appellants, stands refuted as they both had denied of having ever instructed him in that regard. Therefore, the impugned order deserves to be set aside against all the appellants.