ORDER
S.L. Peeran, Member (J)
1. The misc. application seeks for change of cause title in terms of the Certificate issued by the Registrar of Companies. The appellant shall be known as Arch Pharmalabs Limited.
2. This appeal arises from OIA No. 118/2002, dated 22-10-2002 confirming the demands on the allegation of clandestine removal of goods manufactured and cleared on the basis of delivery challans and commercial invoices. There is also reliance on the statements and on the private diaries maintained by Mr. G.V.S. Subramanyam, Assistant Manager (Quality Control). It is the contention of the appellants that there was neither purchase of inputs nor manufacture of the goods. The commercial invoices and delivery challans were all prepared solely for the purpose of taking enhanced bank loans. There was no financial flow back or receipt of funds for manufacture of the goods nor there was receipt of any consideration. The appellants had only prepared these documents for seeking higher bank loans. It is submitted that the private diaries cannot be a consideration for confirming the demands. There were contradictions in the statements of Shri Subramanyam and even the demands have not been raised on the basis of the statements. In view of the contradictory statements of Shri Subramanyam, the finding arrived at by the Commissioner are assumptions and is not correct in law.
3. The learned Counsel arguing for the appellants submitted that it is now well settled that entries made in private diaries cannot be the ground to confirm demands. He relied on the judgment rendered in the case of M.T.K. Gurusamy v. CCE, Madurai – 2001 (130) E.L.T. 344 (Tri. – Chennai). He submits that the Tribunal had looked into all the earlier judgments and recorded findings in this case rejecting the reliance on private records for the purpose of confirmation of demands. The next judgment relied is that of T.G.L. Poshak Corporation v. CCE, Hyderabad – 2002 (140) E.L.T. 187 (Tri. – Chennai) wherein also demands raised solely on the basis of private accounts and notebooks maintained by workers and other private accounts without corroborative evidence has been set aside. Further reliance was also placed on the Essvee Polymers (P) Ltd. v. CCE, Chennai – 2004 (165) E.L.T. 291 (Tri. – Chennai) on the same proposition and that of Super Pipes (P) Ltd. v. CCE, Kanpur – 2001 (138) E.L.T. 1047 (Tri.) = 2002 (48) RLT 23 (CEGAT -Del.). Reliance was also placed on the judgment rendered in the case of CCE, Coimbatore v. Sangamitra Cotton Mills (P) Ltd. – 2004 (163) E.L.T. 472 (Tri. – Chennai). The learned Counsel submits that in view of lack of corroborative evidence by the investigating authorities, the demands are required to be set aside.
4. The learned SDR submits that the appellants had admitted the offence and they have paid duty on such admissions. Therefore, the demands are required to be confirmed.
5. We have carefully considered the submissions and perused the records. The appellants have explained at the earliest time that all the commercial invoices and the delivery challans were all fictitious documents prepared solely for the purpose of taking enahanced bank loans. The Revenue ought to have produced evidence pertaining to manufacture of goods by way of purchase of raw materials and further supported by financial flow back. The Revenue has not examined the parties to whom the delivery challans were issued to corroborate the fact that the goods had been received by them in terms of the commercial invoices and delivery challans. This itself is fatal to the Revenue’s case. It is now well settled position that entries made in private diaries cannot be considered as a conclusive evidence for confirming the demands on the allegation of clandestine removal. Furthermore, on going through the submissions made by Shri G.V.S. Subramanyam, we notice that there are lot of discrepancies and contradictions. The authorities have not taken into consideration the explanation given by the appellants on this aspect of the matter. On an overall appreciation of the entire facts and circumstances of the case and the findings on record, it is clear that the Revenue has not established the receipt of inputs or manufacture of goods and removal of the same to the concerned purchasers. There is absence of corroborative evidence from the purchasers and the receipt of money. The aspect pertaining to the appellants having produced the documents solely for raising higher bank loans appears to be sustainable. In view of lack of corroborative evidence, the demands raised in the show cause notice is required to be set aside, in the light of the large number of judgments cited by the appellants in similar facts and circumstances of the case. Following the ratio of the same judgments, the impugned order is set aside and the appeal is allowed.