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basis of allegation of undervaluation of goods was only statement of buyers, in
that case the appellant should have been allowed to cross-examine such persons.
Pointing out the discrepancies in some statements for instance he shows that Shri
Ashok K. Savsani in his statement dated 16-9-2009 had stated that quality of frit
varied from manufacturer to manufacturer; and that undervalued price was paid
out of cash collected from dealers. He did not quantify amount of cash. However
in his further statement dated 24-12-2009, he stated that he paid Rs. 10/- per kg.
in cash and that he did not know the name of person who collected the cash. It is
unimaginable that such huge amount of cash can be paid to an unknown person.
Similarly Shri Nirav C. Sojitra of M/s. Fashion Ceramics stated in his first state-
ment dated 2-3-2008 that actual value ranged from Rs. 20 to Rs. 24/-; and that
payment was made by their tile dealers on their behalf and sometimes through
Angadias. However in second statement he has stated that cash payment was
made to Shri Hiteshbhai Parekh. Clearly it shows that when no evidence of cash
paid through dealers or Angadias were found the officers made him to state that
cash was paid to Shri Hiteshbhai and statement was modified. Shri Haribhai K.
Patel of M/s. Shreeji group statements were recorded on 5-3-2009, 29-12-2009
and 26-3-2010. On 5-3-2009, he stated that the cash amount was paid Rs. 3/- to
Rs. 4/- per kg.; that cash was collected by appellant’s person; that sometimes
they asked their dealers to directly pay the cash to frit manufacturers on their
behalf. However in statement dated 29-12-2009 he again stated that the cash paid
was @ Rs. 3/- per kg. and he did not know the name of person who collected the
cash. But in statement dated 26-3-2010 he stated that undervaluation was to the
extent of 60%. The revision of such cash portion/undervaluation stated by him is
without any rhyme or reason which is clearly on the insistence of the officers. Yet
another buyer Shri Lalji V. Patel of Swagat Ceramics in his statement dated 28-2-
2009 stated that actual price of frit was Rs. 21/- to Rs. 24/- per kg.; that differen-
tial amount was paid in cash and that cash payment was made sometimes
through dealers and sometimes directly. However in statement dated 15-1-2010
he stated that cash was paid to Shri Hitesh Parekh. He points out same instances
in case of buyers Shri Arvind D. Patel, Shri Savjibhai K. Sanaria, Shri Hirenbhai J.
Salvadiya and others. He submits that the statements of the buyers are not cor-
roborated by a single physical evidence which clearly shows that the statements
were given as per dictates of investigating officers.
3. He submits that in his statement Shri Hiteshbhai Parekh who has
been stated by various buyers to have collected cash, has refused to comment
upon the statements of the buyers. Further the proprietor of appellant Unit, Shri
Samir Parekh in his statements has refused the allegations. The show cause no-
tice has relied upon instance of Rs. 19,49,200/- having been transferred from
Morbi to factory for payment of salary and other expenses. Shri Hitesh Parekh in
his statement dated 23-2-2010 has clearly stated that such amount was not trans-
ferred by him. As regard allegation of gradual increase in price of frit after initia-
tion of investigation, he submits that it is apparent from the statement of several
buyers that frit was not only of poor quality but was also used for preparing ‘en-
gobe mixture’ which is used for inner coating of tiles. The quality of the product
was low and did not fetch good prices. The appellant increased the quality grad-
ually and thus prices were increased. He also draws attention to the fact that cost
of raw material Borax almost got doubled from US $ 355 per MT to 600/- per MT
and relies upon purchase Bill of Entries for different period i.e. Nov., 2006 to Au-
gust 2008 and Feb., 2009 annexed to the appeal memo. That with the above in-

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