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2020 ] SHRI KRISHNA INDUSTRIES v. COMMISSIONER OF C. EX. & S.T., VADODARA-II 123

(iii) A demand of Rs. 81,874/- was proposed on the ground that the ap-
pellants have cleared the goods on parallel invoices.
(iv) A demand of Rs. 62,67,000/- was proposed alleging that during the
period 2005-06 to 2008-09, the appellant has wrongly claimed the
benefit of SSI exemption under Notification No. 8/2003, dated 1-3-
2003 as their clearances exceeded the exemption turnover.
The above proposals were made on the ground that the appellants, by way of
undervaluing the finished goods, have cleared the same at much lower rate as
found out from the investigation and interrogation of twenty six major buyers
for the period 2004-05 to 28-2-2010, which covers about 46% of the total clearanc-
es. The buyers have admitted purchase of opaque quality Fritz and paid the
amount in cheque and equal amount of such cheque amount or more in cash
than the declared prices in their invoices to one Shri Hitesh Bhai of the appellant
concern when he used to visit their factory premises. They also stated that the
quality of Fritz being opaque, the price remained the same. That in order to sup-
press the actual cost of production by tiles manufacturers so as to tally the same
with the undervalued cost, they also purchased raw material by undervaluation.
That they have not been supplied any price list or product code catalogue by
their suppliers. There was undervaluation of Fritz by suppliers and after starting
of investigation against the tiles manufacturers and fritz manufacturers, the rate
was increased by these suppliers. The Fritz was cleared by the appellant at the
rate of Rs. 10 per kg. to most of their buyer’s upto May 2008 except 2 or 3 buyers
i.e. M/s. Surani Ceramics, Morbi and others who were supplying goods to estab-
lished concerns on MRP basis. The appellant has cleared the Fritz to said buyers
at the rate of Rs. 19 to 25 per kg. during the period. Therefore the value per kg of
Fritz supplied to other buyers should be near to the highest value charged from
said buyer M/s. Surani Ceramics. Considering the sale value and other buyers as
basis, the duty demand was made for the period 1-3-2005 to 28-8-2010. It was
also alleged the appellant has issued parallel Central Excise invoices involving
duty of Rs. 81,874/-. It was also alleged that the appellant has consumed more
gas than required and thereby has suppressed the production and cleared the
said quantity without payment of duty. The demands were confirmed by the
adjudicating authority vide impugned order dated 31-12-2010. Aggrieved, the
appellant has filed the present appeal.
2. The Ld. Counsel, Shri Deven Pareekh appearing for the appellant
submits that the demand have been made without corroboration of even single
evidence. No amount was found to have been received by the appellant in cash
and no evidence either from the buyers of the goods or the appellant’s end has
been found. They had requested for cross-examination of the buyers of the goods
whose statements have been relied upon. However the same was not allowed. In
absence of cross-examination, the demands cannot be made. Mere oral state-
ments recorded at the back of appellant without any corroborative evidence can-
not be made basis for demand. Not even a single document has been found
which can support the allegation of the show cause notice. He points out that all
the statements of 26 buyers recorded on different dates are word to word same
and the same cannot be a coincidence. It clearly shows that the statements were
obtained as per the dictates of the officers. The statements even did not ascribe
anything in particular to the appellant. The ledgers produced by the buyers do
not show any cash payment to the appellant. He also pointed out that even the
statements of the buyers kept on changing from time to time. That when the sole
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