COMMISSIONER OF C. EX. Vs. VELAVAN SPINNING MILLS

JUDGEMENT

(1.) THE Revenue is aggrieved with the Commissioner (Appeals) order holding that the department has not let any evidence to come to a conclusion that the assessee had manufactured and cleared cotton yarn. There is no corroboration to all the statements recorded from them including corroboration to the private note books maintained by them. The Commissioner on appreciating the private note books seized, the proof of manufacture and clearance of cotton yarn has come to conclusion that even the seized books does not show the evidence required to confirm the demands to the extent of quantity alleged to have manufactured and cleared. He has noted that there is no mention in the records seized about receipt of labour charges from anybody. He has noted citing the judgment of the Tribunal rendered in the case of Beco Industries Ltd. v. CCE -2000 (121) E.L.T. 650 and that of Deepak Tandon v. CCE - 2000 (126) ELT 1079 that the charge that clandestine removal should be proved beyond doubt by production of affirmative evidence. He has noted that the demand based on note book without any other evidence of production and clandestine removal is not maintainable. He has noted from the citations that the demand cannot be sustained on the basis of private diary without considering production capacity, raw materials purchased, labour employed, power consumed, etc. He has noted citing the judgment of Metal Fitting Pvt. Ltd. v. CCE - 1997 (93) E.L.T. 747 and Krishna and Co. v. CCE - 1998 (97) E.L.T. 74 that private note book raises a doubt but by itself it cannot take a place of proof. He has noted that even the details held out from the note books does not reflect correct picture as alleged as the details entered in the note books have not been maintained systematically. Different records like weigh bridge slips, job work charges, private note books, etc., relied are not conclusive in evidence as the figures differ from each other. He has noted that there was a stock of 43 bales of cotton in the factory at the time of visit to the factory by the officers and in the Form IV account, the closing stock was shown as 7,811 kgs. He has noted that at the same time it is mentioned that the physical stock of accounted cotton was NIL. It is not known as to how the officers have come to the conclusion that the stock available was of unaccounted material received. It is also noted that it is mentioned that cotton issued as per statement is 70,760 kgs and as per Form IV account it is 53,473 kgs and thus unaccounted quantity is 17,287 kgs. He has noted that the period involved is not mentioned. It is not mentioned that the cotton yarn produced as per statement of cotton and waste account is 53,900 kgs, whereas as per RG 1, it is mentioned as 37,750 kgs and thus the unaccounted quantity involved is 16,150 kg. and that the period involved is not reflected. Therefore he has given a categorical conclusion that each documents seized reflect different pictures and which documents reflect correct picture has not been mentioned because the same has not been maintained systematically.

(2.) DR Shri A. Jayachandran took me through the records and also showed the seized the documents. He relied on the ground urged by the Revenue and in the memorandum of appeal. In the memorandum of appeal the grounds raised are based on the statements and the seized records. It is stated in the grounds that the seized records and the statements recorded are sufficient for the purpose of upholding the charge of clandestine manufacture and clearance of goods.

(3.) COUNSEL Shri S. Gokarnesan relied on the findings given by the Commissioner in the impugned order. He has also stated that the seized records does not reflect the correct picture as held by the Commissioner. He relied on the following judgments: (1) Krishna Bottlers (Vijayawada) Pvt. Ltd. v. CCE - 1999 (32) RLT 845; (2) CCE v. Dhanavilas (Madras) Snuff Co. - 2003 (153) E.L.T. 437 (T) -2003 (54) RLT 336; (3) Ambica Chemicals v. CCE - 2002 (148) E.L.T. 101.