2015 (2) TMI 1135 - AT - Central Excise

Evasion of Central Excise duty - suppression of production and clandestine removal of its final products - admission made by director of evasion - Held that - As stated earlier Shri Vinod Kumar Yadav Director himself admitted the shortage and the entire impugned duty was also paid at the time. When Director himself admitted the shortage in his voluntary statement which was never retracted it is not understood who was going to cross-examine Shri Shree Ram Khandelwal and the panchas and to what end. The Director himself had admitted in his statement (which was recorded almost a fortnight after 16-8-2007) the contents of the statements of Shri Shree Ram Khandelwal which were recorded after drawing the panchnamas. The Director never retracted his statement nor even allege any threat or inducement. The respondents are bound by the admission made by their Director and could not later on complain that the shortage was not properly arrived at. Even at the time of signing of the panchnama prepared at the spot the Director of the respondents or any other representative never took exception to the mode of verification adopted by the officers for arriving at the quantity of the goods found short.See COMMISSIONER OF CENTRAL EXCISE CHANDIGARH Versus NABHA STEELS LTD. 2004 (4) TMI 143 - CESTAT NEW DELHI . It is evident from the foregoing including the inculpatory statement of Shri Vinod Kumar Yadav Director that he is clearly liable to penalty under Rule 26 ibid. - Decided against assessee

Summary

Issues: Alleged evasion of Central Excise duty through suppression of production and clandestine removal of final products, discrepancies in stock of finished goods, retraction of statements by authorized representative and panchas, denial of cross-examination, evidentiary value of retractions, liability for penalty under Rule 26.

Analysis:

1. Alleged Evasion of Central Excise Duty: The case involves the appellant, engaged in manufacturing M.S. Ingots and Runners & Risers, facing allegations of evading Central Excise duty through suppression and clandestine removal of final products. The officers' visit to the manufacturing unit revealed discrepancies in stock, leading to the detection of shortages in M.S. Ingots and Runners & Risers.

2. Retraction of Statements: The authorized representative admitted shortages initially but later retracted his statement, claiming re-weighment of goods after the officers' visit. However, subsequent admissions by the representative and the Director, acknowledging the initial shortages and false representation, undermined the credibility of the retractions. The retraction affidavits, dated almost nine months after the seizure, were deemed unreliable and manipulative.

3. Denial of Cross-Examination: The appellants contended that denial of cross-examination of the representative and panchas rendered the adjudication unsustainable. However, the Tribunal emphasized the voluntary nature of the statements recorded by Excise officers, even if retracted, citing legal precedents to support the position.

4. Evidentiary Value of Retractions: The Tribunal scrutinized the retractions in light of the Director's admission of shortages and payment of the impugned duty, emphasizing the lack of threats or inducements in obtaining the original statements. The retractions were dismissed as an afterthought, with the Director's inculpatory statement holding significant weight.

5. Liability for Penalty: Considering the Director's admission of shortages and payment of duty, the Tribunal found him liable for penalty under Rule 26. The Tribunal rejected the appeals, concluding that the evidence and circumstances supported sustaining the allegations and penalties imposed.

In conclusion, the judgment upheld the primary order confirming the Central Excise duty demand, penalties, and rejected the appeals based on the evidentiary value of statements, retractions, and admissions made by the parties involved.