ORDER
G.N. Srinivasan, Member (J)
1. This is an appeal filed by the appellant against the decision of Collector of Central Excise Nagpur made in Order-in-Original No. 13/89 dt.31.8.89 wherein by which he had confirmed the demand of duty of R.81,285.95 have been imposed a penalty of Rs.50,000/-. This order also confiscated 4340 biris and/or RF of Rs. 30/- was fixed. The case of the department was that for the period from 14.2.86 to 21.11.86, the appellant has been clandestinely manufacturing biris and transporting the same and therefore the appellant was liable for duty.The show cause notice dt.8.5.87 was issued only for penalty and not for duty.Subsequently, by an addendum. On 17.7.87 the show cause notice was issued charging the appellants interalia as under:
“Whereas on collection of intelligence that Shri Kesrimal Babulal Jain resident of Ramnagar, Gondia (Hereinafter called the `Noticee’) was engaged in the manufacture of Hand Made Biris at Ramnagar, Gondia by using fake labels of the different biri manufacturers, without obtaining a Central Excise licence and was removing such biris clandestinely, the Preventive Office of Central Excise, Gondia chased a hand cart carried by the servant of the Notice loaded with some packages on 18.11.86.The said servant stopped his cart in front of the house of Shri Triloknath Tarachand Chouble of Ramnagar, Gondia.He opened one room and stored the packages in the said room. While the packages were being stored in the godown, the Central Excise Office chasing the cart noticed some quantity of Branded Biris and huge stock of biri labels, wrappers, Zhillis and other Biri and huge and printing materials stored in the said room/godown.On enquiry and interrogation it was revealed that the said room/godown was hired by the noticee.Since the Noticee had not obtained any Central Excise Licence for manufacture of biris, it was suspected that the biris stored were surreptiously, manufactured & removed by the Noticee.The said premises were, therefore, searched before Panchas.The Noticee was also present on the spot. During the course of the search 4340 Biris labelled with label of different manufacturers and valued Rs.100/- were recovered from the said premises.
In addition, packing materials such as labels, zhillis, wrappers and printing materials like Blocks and films were also recovered from the said premises.Recovery of huge stock of the packing materials such as labells, zhillis Blocks, wrappers of the noticee was manufacturing branded biris by using fake labels of different manufacturers and disposing of the same clandestinely without payment duty.The biris and all the packing materials were, therefore, seized under panchanama after preparing inventory.
Wherweas Shri Bhaulal S/o Akhadu Dahare servant of the Noticee in his statement recorded by the Supdt. Central Excise (P) Gondia, on 18.11.86, has admitted that he was working in the biri factory of the Noticee and was engaged for transporting the biri
pitaras from the factory to Railway Station.
Whereas, Shri Triliknath S/o Tarachand Choube Landlord in his statement dated 26.11.86, recorded by the Supdt.Central Excise (Prev) Gondia,has admitted that the premises/room which the biris/packing materials were seized, were let out to the Noticee, and were being used by him for godown purposes.
Whereas the consignment Note N.L 73818 dated 25.10.86 of Transport Corporation of India, Shivakasi to Gondia under which a 8 bundles of biri labels were received by the Noticee, showed the false description of the goods as `Biscuits Labels’ which disclosed the modus operandi adopted by the noticee of obtaining fake biri labels of other manufactures by showing detection of his nefarious activities.
Whereas Shri Nanu S/o Surajlal Garade of village Toli in his statement dated 27.11.86, recorded by the Supdt. (Prev) Gondia, has admitted that he was employee in the biri factory of the Noticee for the last 5-6 months and used to maintain accounts of biris manufactured, wages paid to labourers etc.
Whereas from the details of biris Pitaras booked at Railway Station Gondia between 14.2.86 to 21.11.86, in the name of various persons, viz. Nanu Garade, Bhaulal Dahare, Ramesh Jain Ramanlal Jain, S.R. Jain etc., it appears that the noticee the extent of 503 Pitaras =2,11,26,000 biris (42,000 per Pitara taken on an average basis), under the assumed names by hiding his identity to avoid detection”.
In this show cause notice duty has also been demanded and replies were filed.After hearing the party the Commissioner confirmed the duty and imposed penalty.Hence the appeal.
2. Shri Anoop Parihar Ld.Counsel argues on behalf of the appellant states the department has proceeded in this matter on assumption and presumption.As far as the goods from parcel office that is from the Railway Station Gondia is concerned the name of the appellant is nowhere there.The statement of Shri Bhaulal Dahare cannot refer to the labelled biris.He also stressed the point the Affidavit filed by the punch witnesses pages 103 and 107 go to show that Punchas were never present at the time of drawing of Panchnama.He also stated specifically that one of the evidence which sought to be relied on is it transportation document through lorry at page 74 which does not establish the relationship between the appellant and the consignment of reflected in the lorry receipt.He states that rule from which a quantity of 4300 biris were seized was never taken on rent by the appellant.This reflected by the affidavit of the owner at page 113 namely wherein owner Shri Triloknath sates that on 2.1186 the appellant had vacated the house. He states that preponderance of probabilities in the case go only to show that the goods seized were never owned by him and never got manufactured by him, therefore fastening of duty and penalty on him is uncalled for.He also states that even on respect of the statement of Bhaulal Dahare if does not specifically brings out that labelled biris were booked by him at the behest of the appellant.He also pleads limitation.
3. As against this the Ld. JDR Shir AK Jain argues that, as far as punch witnesses are concerned it has been rightly held by the collector that what is contend in Panchanama accepted by the Collector.He states the nature of the statement given by the employees page 66 clearly indicate the trained of the case.He also invited my attention to the statement of Shri Keshrimal jain at page 70 states that his occupation manufactured branded biris.He also invited my attention to the statement of Shri nanu recorded on 27.11.86.He also relies on the impugned order.
4. I have considered the rival submission and facts of the case.If we go through the facts of the case there are many looseends which the department did not choose to plug them. The charge against the appellant was that he has manufacturing branded biris that is reflected in the show cause notice dt.17.7.87 page 79 extracted above. The statement of Bhaulal Dahare only speaks of unbranded biris.Once unbranded biri were stated to have mentioned by Shri bhaulal Dahare, it means for branded biris, there is no connection between the appellant and the seized goods.It is true that when the searchers were made in November 1986 in premises alleged to have taken on rent by the appellant. The Landlord by his Affidavit that on 2.11.86 the relationship between landlord and appellant has ceased as a tenant and landlord. Once that is the case, it is not possible for me to connect the goods seized in the premises of the landlord and the appellant. Moreover punch witnesses by their Affidavits at pages 103 and 107 clearly states that they were never present.The adjudicating authority has confirmed the duty demand on the basis of statement given by Shri Bhaulal Dahare and Shri Nanu. Just because they were working for the appellant it did does not meant the goods under consideration could becan be related to the appellant.Infect in the Znanu’s statement goes against this case of the department as he stated that Keshrimal jaingives tender to labourers for preparation of biris.If it is what is stated therein is correct then goods were not manufactured by the appellant and it was manufactured only by the biri worker.Therefore without looking into this aspect the entire basis of the case has been proceeded by the adjudicating authority under wrong premises.This one sentence in Shri nanu statement clearly kills in the case of the department.There is no evidence as to who procured labels and who packed them with labels.The statement of Bhaulal only mentioned that about unlabelled brirs but it did not highlight label biris.I am conscious of the fact that in quasi-judicial proceedings there need not be mathematical precision between evidence of the case and the conclusion of the commission of the offence.But if there is absence of any material available on evidence connecting between the goods which have violated the provisions of the Act, and the appellant then it is not possible for me to hold that there has been a violation which has taken place. I am therefore of the view that the impugned order is set aside appeal stands allowed.It is represented to me that they have the appellant has paid Rs.40,000/- is predeposit the same is ordered to be refunded to him.
(Pronounced in Court)