1. The above appeal arises out of the order of the Additional Collector of Central Excise, Jaipur imposing a penalty of Rs. 5,000/- on the appellant under Rule 209A of the Central Excise Rules, 1944 for acquiring possession of and being concerned in purchasing, keeping, selling and dealing with excisable goods with the knowledge and reasonable belief of their liability to confiscation.
2. The brief facts of the case are that on 3-4-1991 the Central Excise officers visited the godown premises of M/s. Gill Sandhu Haryana Transport Company, Jaipur and detected 23 bundles of copper circles and 7 bundles of copper utensils lying inside the Transport Company's godown. The Manager of the Transport Company, Manmohan produced a GR No. 555 dated 2-4-1981 and a bill of the same date for the copper circles. But there was no duty paying documents in the form of GP-I, etc. accompanying the consignment. Except the goods covered by the GR No. 555 and the bill, the remaining goods were seized in the absence of proof of their duty paid character. Statement of the Manager of the Transport Company was recorded on 3-7-1981 in which he deposed that a total of 61 bundles of copper circles/utensils were brought by Shri Nazar Singh, Driver of a truck from Rewari and unloaded in the premises of the Transport Company in Jaipur on 3-4-1981, in his absence and no documents were handed over to him. He added that out of this consignment 31 bundles of copper circles were taken delivery of by Shiv Shankar and Sitaram, the present appellant, Manager and Partner respectively of M/s. Babulal Ramesh Chand, Jaipur and these two persons paid the freight charges. The statement of the appellant was recorded in which he denied having received any copper circles on 3-4-1981 from M/s. Gill Sandhu Haryana Transport Company and he also stated that no goods were delivered to him by Shri Nazar Singh. Shri Gopal Lal, who according to Shri Manmohan, had booked the goods at Rewari denied having booked any goods with M/s. Gill Sandhu Haryana Transport Company. Nazar Singh's whereabouts could not be traced. In subsequent follow-up action, the Departmental Officers visited the Railway Station, Chomu and on examination of the Railway parcel records it was revealed that the 11 bundles of non-duty paid copper circles, the railway receipts of which were endorsed in favour of the appellant were taken delivery of by the appellant on 4-8-1981. Show cause notices were issued on 18-9-1981 to M/s. Babulal Ramesh Chand and others proposing confiscation of the seized goods and levy of duty on them. The Additional Collector of Central Excise, Jaipur passed an order of confiscation on 27-4-1983 in respect of the seized goods other than 31 bundles of brass circles forming part of the total consignment of 61 bundles which had been transported from Rewari to Jaipur on 2-4-1981 and which had been taken delivery of by M/s. Babulal Ramesh Chand on 3-4-1981 from Gill Sandhu Haryana Transport Corporation and 11 bundles of brass circles delivered to Babulal Ramesh Chand from the Chomu Railway Station.
3. A notice dated 25-2-1985, was issued to the appellant herein regarding compounding of the case under Rule 210A on payment of Rs. 1,500/- in lieu of punishment for breach of the relevant rules, and the Additional Collector passed an adjudication order on 6-8-1986 by which he imposed a penalty of Rs. 5,000/- on the present appellant. This order of the Additional Collector was set aside by the Tribunal by order No. A/269-270/87-NRB, dated 12-5-1987 and the matter was remanded to the adjudicating authority to decide the case afresh after supply of relevant documents and after considering the reply to the show cause notice and affording adequate opportunity for hearing to the noticees.
In pursuance of the Tribunal's order a copy of the statement of Nazar Singh was sent to the appellant's counsel who replied to it, denying all connection with the seized goods in question. Vide the present impugned order dated 22-10-1990, the Additional Collector has once again imposed a personal penalty of Rs. 5,000/- and being aggrieved by this, the appellant has preferred the above appeal.
4. Shri G.K. Rana, learned Counsel for the appellant submits that the entire case is based only upon statements of Nazar Singh, Sultan Singh and Bhola Singh (which statements were furnished to the appellant after the remand order of the Tribunal and which have been allowed as additional evidence), but none of them were produced for cross-examination. Therefore, their statements cannot be relied upon and as a consequence the entire foundation of the Department's case crumbles to the ground. He further submits that the statement dated 3-7-1981 of Manmohan should not be relied upon for the reasons that in his first statement in April 1981, he had not stated anything about the goods in question having been taken delivery of by the appellant and also for the reason that in his cross-examination on 6-9-1990, Shri Manmohan has stated that no goods were taken from his transport company by the appellant. He, therefore, prays for setting aside of the penalty, as the Department has not discharged the burden of proving that the appellant was liable to penal action.
5. Learned DR, Shri B.D. Bhagat submits that admittedly the 42 bundles which are the subject matter of this case were not covered by any duty paying documents and, therefore, were rightly seized and the appellant has been penalised for dealing in goods which he knew or had reasonable ground to believe that they are liable to confiscation. In addition, he reiterates the findings of the adjudicating authority.
6. We have carefully considered the submissions of both sides. The entire case is based upon the statements of Manmohan Singh, Manager of the Transport Company, Nazar Singh, driver of the truck and Sultan Singh and Bhola Singh who are reported to have transported the goods from the transport company to the firm of Babulal Ramesh Chand. Nazar Singh, Sultan Singh and Bhola Singh were not produced for cross-examination as summons issued to them were returned undelivered, and hence their statements cannot be relied upon as they have not stood the test of cross-examination. As regards statement of Manmohan Singh, we find that in his first statement recorded on 3-4-1981, he has in no way implicated the appellant as he has not stated anything about the appellant taking delivery of the goods involved in the case and it is only in his subsequent statement recorded 4 months later i.e. in July 1981 that he admitted that 31 bundles of copper circles had been delivered to M/s. Babulal Ramesh Chand, the firm in which the appellant herein is a partner. In his cross-examination conducted on 6-9-1990, he has resiled from the statement recorded in July 1981 and has stated that no goods were taken delivery of from his company by the appellant, or the Manager of M/s. Babulal Ramesh Chand. The record of the cross-examination is reproduced below :- "I do not remember about the details of the case which the Excise officers had seized the circles on 3rd April 1981. When I reached the office at 10 O'clock, the Excise officers were already present there. The goods in respect of which the case was booked were not received in my presence. I cannot say as to how much quantity was off-loaded by the driver of the truck. My statement was recorded on the same day. I have seen the signatures as appearing in the statement dated 3-4-1981 and these are my signatures. I have been shown the letters - one written by Shri Sitaram of M/s. Babulal Ramesh Chand, ad-dressed to the Manager, Gill Sandhu Haryana Transport Co. an acknowledgment addressed to the Manager and a letter addressed to M/s. Babulal Ramesh Chand, signed by me on 15-4-1981. The signatures appearing on the letter as well as on the acknowledgment are mine. To my knowledge, no goods were taken from my company by S/Shri Sitaram and Shiv Shankar. Nobody had taken the goods in my presence as when I arrived in the office, the Central Excise officers were already present there and they had taken charge of the goods. We do not let anybody take the goods without obtaining a receipt from him. There is also a chowkidar in the company. Once the goods are entered in the godown, the goods cannot be allowed to be removed. The only possibility is in case the goods are off-loaded outside. No goods were off-loaded in my presence. In respect of the goods which are off-loaded outside we are not responsible. Nazir Singh does not work in our company. He has never worked in our company. I neither know Shri Nazir Singh nor have I ever seen him.
Whenever the goods are received in the company, they are accompanied by the G.R. Unless the goods are accompanied by the G.R., the same are not accepted in the company. I do not know Shri Sultan Singh and Bhule Singh they are not our employees. They are like Rehriwalas who keep standing outside. On being questioned that when he has not been told about the profession of these two fellows, then how could he mention about the fact that these were Rehriwalas to keep standing outside. He had no satisfactory answer to that." 7. Regarding the statement of Om Prakash even the adjudicating authority has held that he has only deposed regarding the markings on the 61 sealed bundles containing copper circles at Rewari and that the fact of markings does not in any way affect the role of the appellant in so far as the allegations against him in the show cause notice are concerned. Therefore, there is nothing in the statements of either Manmohan Singh or Om Prakash which links the appellant with the alleged offence. Apart from the above, there is no other evidence to establish that the appellant removed 31 bundles of non-duty paid goods either from the transport company. The charge regarding removal by the appellant of 11 bundles of non-duty paid goods from the Railway Station at Chomu is based only on the penalty imposed by the Sales Tax Department which has since been set aside and, therefore, this charge also falls .to the ground. Therefore, we are of the view that the Department has not discharged the burden of proof of removal of non-duty paid goods by the appellants. Accoordingly, we extend the benefit of doubt to the appellant, set aside the impugned order and allow the appeal with consequential relief, if any, due to the appellant.