1998 (10) TMI 366 - AT - Central Excise

Summary

Issues:
1. Central Excise duty demand and penalty imposition based on alleged non-payment and non-compliance.
2. Validity of statements recorded and subsequent retractions by individuals involved.
3. Evaluation of the retraction plea and its impact on the Commissioner's decision.
4. Assessment of the evidence presented and its credibility in determining the duty demand and penalty imposition.

Central Excise Duty Demand and Penalty Imposition:
The appeal before the Appellate Tribunal challenged the Order-in-Original demanding Central Excise duty of Rs. 74,844.20 and imposing a penalty of Rs. 50,000 on the appellant for allegedly manufacturing and removing Biris without payment of duty and without proper registration. The Commissioner's decision was based on statements obtained from the appellant and two individuals involved in supplying Biris. The appellant's defense argued that the statements were not voluntary and true, emphasizing that the individuals had retracted their statements by filing sworn affidavits claiming their signatures were taken on blank papers. Despite the retraction, the Departmental Representative cited a Supreme Court judgment to support the admissibility of the original statements, highlighting the belated nature of the retractions. The Commissioner's order was upheld concerning the duty demand, but the penalty was reduced to Rs. 10,000 by the Appellate Tribunal.

Validity of Statements and Subsequent Retractions:
The crux of the appeal revolved around the validity of the statements recorded from the appellant and the individuals supplying Biris. The appellant's contention that the statements were coerced and not genuine was supported by the individuals' retractions through sworn affidavits. However, the Departmental Representative argued that the belated retractions, occurring nearly two years after the original statements, lacked credibility. The Appellate Tribunal considered the timing of the retractions and the manner in which the statements were obtained, ultimately upholding the Commissioner's reliance on the original statements despite the retraction attempts.

Evaluation of Retraction Plea and Impact on Commissioner's Decision:
The Appellate Tribunal scrutinized the retraction plea made by the individuals supplying Biris and its impact on the Commissioner's decision. The delay in retracting the statements, coupled with the lack of prompt disclosure regarding the alleged coercion during the original statement recording, weakened the credibility of the retractions. The Tribunal emphasized that the individuals' failure to raise concerns about signing blank papers promptly undermined the validity of their later claims. Consequently, the Appellate Tribunal upheld the Commissioner's decision based on the original statements rather than the subsequent retractions.

Assessment of Evidence and Credibility in Duty Demand and Penalty Imposition:
In assessing the evidence presented, the Appellate Tribunal considered the circumstances surrounding the statements obtained from the appellant and the individuals supplying Biris. Despite the defense's argument that the statements were fabricated, the Tribunal found the original statements to be credible, given the lack of immediate objection or disclosure regarding coercion during their recording. The positioning of signatures on the statements and the absence of a compelling reason for officers to fabricate evidence against the appellant further supported the Tribunal's decision to uphold the duty demand while reducing the penalty imposed by the Commissioner.

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