Commr. Of C. Ex. & Cus. (Appeals), Calicut v. Malabar Plywood Works

[Order per : S.L. Peeran, Member (J)]. - The Revenue is aggrieved with Order-in-Appeal No. 353/02, dated 27-5-2002. The Commissioner in the impugned order has noted that Revenue has not established the under-invoicing of the product and the assessee having received the extra amount. He has noted that the Managing Partner has resiled from the statement promptly and there was corroborative, direct or circumstantial evidence to establish such charge that the assessee had received extra cash in the sales of their products. In this regard, the Commissioner has relied on the judgments of the Tribunal rendered in the cases of Kali Charan v. CCE reported in and Chandrabadan Bavabhai Jadhav v. CC, Ahmedabad reported in which states that reliance cannot be placed on the statement of the sole witness which apart from being vague had been retracted. However, reliance has been placed on the rulings rendered in the case of R.P. Hussain v. CC reported in 1990 (49) E.L.T. 542; Bajaj Auto Ltd. v. CCE reported in and Kerala High Court judgment in the case of Rajendra Prabhu v. UOI reported in (Ker.).

2. The learned SDR pointed out that the initial statement of the Managing Partner stating that he has received extra amount, is sufficient to prove the charge of undervaluation.

3. The learned Counsel submits that there is no ground to substantiate the statement of the Managing Partner. The Managing Partner resiled from the statement and there was no other evidence to establish flow back of the said extra money. Hence order is in term of the cited judgments. He prays for dismissal of the appeal.

4. On a careful consideration, we notice that initially Managing Partner had admitted collecting 50% over and above the invoice value in cash but it was denied later on and the statement was immediately resiled. The Revenue did not proceed to make further Investigation and did not collect evidence directly or circumstantial in nature. Therefore, in the light of the cited Judgments, the Commissioner accepted the assessee’s plea. He has also noted that at the time of preventive operation and also during follow-up action, no cash or any other incriminatory material was found, which would justify the conclusion of the Original Authority. On our careful consideration, we agree with the finding of the Commissioner (Appeals). As there is lack of evidence, the benefit of doubt has been extended to the assessee. There is no merit in this appeal and the same is rejected.

(Operative portion of this Order was pronounced in open court on conclusion of hearing)