By TIOL News Service

CHENNAI, OCT 13, 2016: THE appellant is in appeal against demand of duty on account of clandestine removal of final products. It is the contention of the appellant that the demand was based on retracted statements and though they had requested for cross examination of third party statement, Mahazar drawn from the officers of the respondent and witnesses, but it was not considered by both the original authority and the Lower Appellate Authority. Non-consideration of the request of the Appellant is in violation of principles of natural justice.

They further submitted that the investigating officers finding of excess of finished goods and shortage of raw materials in stock was merely by visual examination and not based upon any actual weightment basis. The entire demand based on visual examination for shortage and excess stock of goods without any actual weighment is not sustainable.

After hearing both sides, the Tribunal held:

++ The lower authorities have determined the duty liability of cotton yarn manufactured and cleared illicitly without payment of duty based on recovery of private records such as diaries, daily production reports containing the data of annual production as against the production shown by them in the statutory register. The authorities have confirmed the demand for the reason that the appellant had manufactured and cleared cotton yarn clandestinely without accounting for the same in the statutory records and thereby not following the procedures elaborately set out in law. In the instant case, the appellant has recorded the productions in the private records and it is not known as to why the private records are being used to record their final production. This is not just a case where there is a demand arisen on account of difference between the private records and the RG.1 registers but as per the record that there has also been corroboration with the shortages noticed in the raw material account. In the instant case, there have been confessional statements although there has been a retraction of the said statements. It is to be noted that retractions, as rightly observed by the lower authorities were merely an after-thought and if the case of the department is just based on the retracted statements, the appellant could possibly have a reasonable case to contest but in the instant case, there have been confessional statements, private registers and those private registers also substantially matched with the shortages.

++ The next grievance of the appellant is that their request for cross-examination were not considered by the lower authorities. The observation by the Commissioner (Appeals) to the effect that the material evidences in the form of seized goods, the evidences for non-accountal of raw materials stand further corroborated with the Manager's Diary cannot be faulted with for the reason that if cross-examination is granted, the same would serve no purpose as the facts in the instant case are very much clear and the denial of cross-examination would not result in the violation of principles of natural justice in the facts of the present case.