ORDER
Jeet Ram Kait, Member (T)
1. This appeal by revenue is directed against Order-in-Appeal No., 113/2001 (MDU) (GVN) dated 10.10.2001 by which the Id. Commissioner (Appeals) has set aside the Order-in-Original No. 18/2001 dated 18.4.2001 of Additional Commissioner who had confirmed an amount of Rs. 1,61,850/- under provisions of Section 11A (1) of the CE Act and had also imposed penalty of equal amount under Section 1AC and had also asked to pay interest under Section 11AB at appropriate rate. Ld. Commissioner (Appeals) has not found any evidence that there is a clearance of beedies which are non-duty paid and therefore he has held that the order passed by the original authority on the appellant is not sustainable and has set aside the order of imposition of penalty on them.
2. Revenue has come in appeal against this impugned order on the ground that on the basis of the admission statement given by Shri Yesuvadiyan, Proprietor of M/s. VBW to the effect that the unaccounted 4980 kgs. of tobacco biris was used in the manufacture of biris and such biris were cleared without payment of duty and the buyer’s statement to the effect that no bills/invoices were given by VBW for biris supplied to them or they did not have the invoices with them. The further grievance of the revenue is that the Id. Commissioner (Appeals) has failed to appreciate the correctness of the findings of the Addl. Commissioner that Shri Yesuvadiyan, Proprietor had retracted his admission statement given on 29.4.97 before Central Excise Officers only on 28.5.97, that is after lapse of a period of one month and therefore his belated retraction on account of his after-thought did not merit any consideration. In this connection they rely on the Apex Court judgment rendered in the case of Haroon Haji Abdulla Vs. State of Maharashtra as reported in 1999 (110) ELT 309 (SC). In view of cited decision of the Hon’ble Supreme Court, the admission statement given by Shri Yesuvadiyan is relevant and is direct evidence to establish the fact that 4980 kgs. of tobacco biris had been used in the manufacture of 2,49,00,000 Nos. of biris without bringing into statutory account and had cleared them clandestinely without payment of duty. They further submitted that the Commissioner (Appeals) has failed to take not of the fact that M/s. Kerala Transport Company had not mentioned anything about their mode of raising bills while furnishing the list showing the details of supply of tobacco biris to M/s. VBW vide their statement on 3.6.97 but it was only on 24.1.2000 i.e. after lapse of a period of 3 years, vide their letter that purchase is done on ready cash basis, they do not bother about the name and whereabouts of the company, but used to raise the bill for the consignment in the name of the company as told by the purchaser. Therefore, the Commissioner (Appeals) had erred in accepting such a belated explanation given by the supplier of tobacco biris especially when their statement dated 3.6.97 containing the details of supply of tobacco biris is the vital basis for the case. It is also one of the ground of the revenue that the Commissioner (Appeals) has failed to take not of the fact that M/s. Kerala Trading Company had raised a credit bill No. 121 dated 28.3.96 on M/s. Valan Beedi Works and the raw material covered under the said bill had been accounted in their form IV Register. Revenue further submitted that the Commissioner (Appeals) has ignored that fact that M/s. Kerala Trading Company themselves committed in the letter dated 24.1.2000 that they do not bother about name and where about of the purchasers as the sale is done on ready cash basis. In other words, if the sale is on credit basis, they could know the name and whereabouts of the purchaser company. Inasmuch as M/s. Kerala Trading Co. had raised a credit bill on M/s. VBW,they knew the identity of the person who represented M/s. VBW and therefore their version regarding mode of raising bill in respect of sale on ready cash basis and the defense of M/s. VBW that some other persons could have purchased tobacco biris from M/s. Kerala Trading Company in their name are not sustainable. In view of the above submission, revenue prayed that the Order-in-Appeal No. 113/2001 (MDU) (GVN) dated 10.102001 passed by Commissioner (Appeals) may be set aside and the order of the original authority confirming the demand of Rs. 1,61,850/- along with appropriate interest may be sustained.
3. Appearing on behalf of the revenue DR Shri C. Mani has filed written submissions on behalf of the appellant-revenue along with a copy of a letter received from the Office of the Commissioner of Central Excise, Tirunelveli vide their letter No. C.No. IV/16/271/2003-App. dated 20.11.2003. The written submission dated 27.1.2004 filed by the Id. DR on behalf of the appellant-revenue is extracted hereunder.
WRITTEEN SUBMISSIONS FILED ON BEHALF OF THE APPELLANT
1. In the statement recorded from Shri. Yesuvadiyan on 29/4/97 he has admitted that he has manufactured and sold biris in loose quantities or unpacked form. Shri Yesuvadiyan is a registered manufacturer of branded biris. Brand loyalty is an important factor in the marketing of goods and especially smoker are known to be notoriously brand loyal. To cater to their exclusive clientele, therefore, the biris must be connected with the particular manufacturer. It is consequently not possible to release biris without any brand name into the market and expect it the reach the target consumers. The biris cleared by Shri Yesuvadiyan should, even in a loose or unpacked form have carried some indication of the brand. The biris should then for all intents and purposes be treated as branded.
2. The Commissioner (Appeals) has placed more emphasis on the retraction of the statement rather than take into consideration the totality of evidence that established the facts recorded in the statement. The cross examination of the raw-material supplier was also not pressed by the respondent. They had initially asked to cross examine Shri Mujeeb, Proprietor of M/s. KTC and subsequently changed their request to cross examine Shri P T Firoz of M/s. KTC. When Shri Firoz failed to respond to the summons the respondent agreed not to press for the same and this was brought on record.
3. The evidence of purchase of presented in the form of statement of deliveries from the raw material supplies. These being extracts of the sale records maintained by them no documents as such were recovered.
4. No appeal was filed on the point of penalty imposed on the purchaser as the penalty was meager.
5. Considering the totality of evidence it is prayed that the Honourable bench may be pleased to allow the appeal.
4. Appearing on behalf of the respondent, Shri Rajkumar Appasamy Advocated has submitted that there is no evidence of clearance of branded beedies and there is no case at all. He further submitted that the department has not mentioned any bill evidencing purchase of the raw material, the manufacture of the branded beedies and sale of such branded beedies to even a single person in the market. He further submitted that branded beedies have been cleared after payment of duty and the non-branded beedies on which there is no Central Excise duty have also been cleared without payment of duty. He further stated that out of 1 kg. of tobacco biris 5000 beedies are manufactured and he has not admitted that 2,49,00,000 numbers of beedies are manufactured out of 4980 kgs. of tobacco and cleared without payment of duty. He therefore submitted that branded beedies have been cleared after payment of duty and therefore the order of the Id. Commissioner (Appeals) is required to be sustained an the appeal filed by the revenue is required to be rejected.
5. I have carefully gone through the case records and the rival submissions and come to the conclusion that the revenue has failed to produce any evidence about the clearance of branded beedies without payment of duty. They have also failed to produce any invoices/bills evidencing purchase of raw material and manufacture of branded beedies and sale of such branded beedies without payment of any Central Excise Duty. The statements which are not corroborated with documentary evidence or any corroborative statement obtained from the seller of the raw material, purchaser of the raw material, seller of the branded beedies and purchaser of branded beedies without bills cannot be admitted as an evidence to saddle the respondents with the Central Excise duty. The whole case is based on preponderance of probability and on a statement which was also retracted through after a month and no evidence has been produced against the respondents. A perusal of the letter dated 20.11.2003 of Jt. Commissioner (Review), Tirunelveli sent to JDR, it has been admitted in the statement dated 29.4.97 given by Shri Yesuvadiyan that there is no mention about the nature of biris sold, that is branded or unbranded, but what he had admitted what that he has manufactured biris and sold them in loose quantities, that is in unpacked form. Hence the contention of the revenue is that Shri Yesuvadiyan has admitted the unaccounted manufacture and illicit removal of loose biris, that is in unpacked form. It is a common knowledge that loose beedies when they are not packed and labelled are not liable to pay Central Excise duty and are not known as labelled beedies. Loose beedies or unbranded beedies and sale of such beedies without payment of duty is legal and proper. The comments furnished by the Jt. Commissioner and the written submission made by DR are all based on assumption and presumption and therefore, I, do not find any infirmity in the order passed by the Commissioner (Appeals). I, therefore, sustain the order passed by the Commissioner (Appeals) and reject the appeal filed by the revenue. Ordered accordingly.