Order date – 09 December 2022

Facts –

• The Appellant, M/s.Shree Raj Exports Ltd. were manufacturing Guthkha in their factory at Jodhpur during the period 2008. They were paying royalty @1% for using the brand name “Goa 1000” to its brand name owner, Raj Group. There were other manufacturers also of Guthkha, which were being marketed under the very same brand name at the relevant time.
• An investigation was conducted suspecting evasion of duty by resorting to clandestine removal of Guthkha manufactured by the appellant, searched the appellant’s factory at Jodhpur, premises of the transporter, M/s.G.M. Carriers and premises of Raj Group. Upon completion of investigation, a show cause notice dated 11.05.2011 was issued to the appellant demanding central excise duty for the period Feb, 2008 based on entries in a Note Book recovered from the premises of M/s. G.M. Carriers.

Issue –

• Whether the Excise Duty imposed on the appellant based on the entries in a Note Book recovered from the premises of M/s. G.M. Carriers is in order?

Order –

• The Tribunal finds that the whole case of Revenue is made on the basis of the third party statements and some records and a note book recovered from the premises of M/s. G.M. Carriers. The entries in the said note book (private documents) are purported to have been made by Mr. Javed Gamir Sheikh an employee of M/s.G.M. Carriers as stated by him in his statement and he was not produced for cross examination by the Revenue.
• It is also finds that the said statement of Mr. Javed Gamir Sheikh contradicted by the partner of M/s. G.M. Carriers. Thus, held that the said note book is not a reliable piece of evidence and further, the statement of Mr. Javed Gamir Sheikh is not admissible evidence, as he was not produced for cross examination in violation of Section 9 D of the Act.
• The partner of M/s. G.M. Carriers has denied having transported any goods from the factory of the appellant at Jodhpur and has also categorically stated that they do not have any booking office at Jodhpur.
• The transporter of the appellant, M/s. KGN Transporter has not been investigated, at any stage. Further, admittedly, only minor /negligible variations have been found in the stock of the raw materials and finished goods in the course of inspection at the factory at Jodhpur.
• The Tribunal also finds that no receiver of finished goods or buyer of finished goods in question have been identified and /or investigated. In spite of there being other manufacturers also of the same brand of guthkha, no investigation was done by Revenue. The statements of the witnesses, which were relied upon by the Revenue have not stood the test of cross examination. Thus, the whole demand has been made on assumptions and presumptions.
• Hence the appeal is allowed.