K. Prakash Anand, Member (T)

1. In this matter, it has been held that the appellant had cleared 1,50,38,920 Nos. of biris without bringing them into Central Excise accounts and without payment of duty. Accordingly, the department has demanded duty of the order of Rs. 57,812.31 and' a penalty of Rs. 1,000/- has been imposed on A.S. Periasamy, Proprietor of appellant factory. It is against this order that this appeal has been filed before us.

2. We have heard V.K. Dorairaj, Adv., and Balbir Singh, SDR for the department.

3. The learned Adv. submits that the entire case against the appellant is made on the basis of two note-books; one reportedly produced by the informer and another by one Sivalingam. These records, it is submitted, were not recovered from the appellant or from his factory. The informer, it is stated, was a former employee of the factory of the appellant, who had been discharged from service for undertaking "parallel trade in biris". It is submitted that it is therefore that he is trying to wreak vengeance on the appellant by giving the department false information.

4. It is further urged that even if the note-books were to be taken as depicting the manufacture of biris by Sivalingam, this does not establish the receipt of biris by the appellant or his marketing them after labelling.

5. It is also stated that the department recorded some statements from the appellant on 31-12-1985 and 1-1-1986, but these were repudiated by him in a letter dated 7-1-1986. Similarly, Sivalingam, who had given a statement on 31-12-1985 retracted it in a letter which he addressed to the department on 8-1-1986. It is added that a statement was again obtained from Sivalingam on 25-1-1986 to the effect that he had supplied to the appellant a quantity of 1,50,38,920 biris and that these were not brought into Central Excise records. This statement was repudiated on the same date by Sivalingam.

6. Dorairaj mentioned that Sivalingam was an illiterate person who did not know the reading or writing. In any case, since the confessional statements had been retracted, it is submitted, the Collector should not have relied on them unless there was some corroboration by way of other facts and evidence.

7. The learned Adv., in this connection, relied on the ratio of the decision of the Andhra Pradesh High Court in the case of Assistant Collector of Customs Central Excise, Hyderabad v. Parasmal - 1983 ELT 328.

8. It is emphasized on behalf of the appellant that the department has failed to discharge the onus, which must rest on it in a case of this kind, to prove the allegation of clandestine production and removal of goods without due accountal in the statutory records and without payment of duty. The learned Adv. has cited in his favour the decision of this Tribunal in the case of Leather Chemicals Industries Ltd., Calcutta v. Collector of Central Excise, Calcutta[MANU/CE/0317/1983 : 1984 (15) ELT 451 (Trib.)].

9. Finally, it is submitted that the appellant was working under physical control. Therefore, the entire accountal was subject to scrutiny and checking of departmental officers.

10. Briefly responding, Balbir Singh submitted that he would like to reiterate the stand of the department before the lower authority. He adds that it is true that the relevant confessions in this case have been retracted, but this was done not immediately but much later. It is added that the appellant company was involved in two earlier cases of violation of Central Excise Rules. These matters involved shortage of 1,87,000 biris and seizure of 1,01,350 biris.

11. The learned SDR submitted that the explanation given in regard to the note-book recovered on the basis of the department's case is fanciful as there is no evidence as regards inflation of figures to collect more bonus.

12. We have carefully considered the facts of the case and the sub-.missions made before us. We find that the department's case rests on two statements of Sivalingam dated 31-12-1985 and 25-1-198