2014 (9) TMI 767 - AT - Central Excise

Clandestine removal - confession statements - corroborative evidences - Confiscation of excisable goods and currency - Redemption fine - imposition of fine and penalties - Held that - In one type of sale he used to prepare sales invoices and delivery challans for sale of goods at the factory gate to the genuine customers and the said sales was duly accounted for in the records. In the second type of sales, they were selling the goods at factory gate to various customers on payment of cash without any sales invoice and bills. In the third type of sales wherever they received orders for supply of goods over phone, the goods were lifted from the factory for delivery under delivery challans made in the name of genuine customers but the goods were sold to needy customers without any sales bills or delivery challans and against payment of hard cash. Thus the modus operandi adopted by the appellant firm stood clearly admitted in the aforesaid statement of Shri Balkrishna Agarwal, who was the Managing Partner of the appellant firm during the relevant period. There is no retraction of the confessional statement by Shri Balkrishna Agarwal. As regards the lack of corroborative evidence, it is a settled position of law that admitted facts need not be proved as held by the Hon ble High Court of Madras in the case of Govindasamy Ragupathy - 1997 (6) TMI 356 - MADRAS HIGH COURT . In a recent decision in the case of Telestar Travels Pvt. Ltd. - 2013 (2) TMI 396 - SUPREME COURT , the Hon ble Apex Court held that reliance can be placed on statement if they are based on consideration of relevant facts and circumstances and found to be voluntary. Similarly in the case of CCE, Mumbai v. Kalvert Foods India Pvt. Ltd. - 2011 (8) TMI 24 - SUPREME COURT OF INDIA the Hon ble Apex Court held that if the statements of the concerned persons are out of their volition and there is no allegation of threat, force, coercion, duress or pressure, such statements can be accepted as a valid piece of evidence. As regards the confiscation of the currency, the same is permissible, in view of the provisions of Section 121 of the Customs Act read with Section 12 of the Central Excise Act, 1944, as the currency was the sale proceeds of the goods clandestinely removed without payment of excise duty - Inasmuch as Shri Balkrishna Agarwal has passed away, the proceedings against him abates and therefore, the penalties imposed on Shri Balkrishna Agarwal is set aside - Decided partly in favour of assessee.

Summary

Issues:
Three appeals - Revenue's appeal against dropping of demand, Appellant's appeal against duty demand, interest, confiscation of goods and currency, penalties.

Analysis:

Confirmation of Duty Demand:
The appellant argued that the confirmation of duty demand was solely based on the statement of Shri Balkrishna Agarwal without corroborative evidence. They contended that being a small-scale manufacturer, they were exempt from registration and record-keeping requirements. The Revenue claimed that the confirmation was valid as Shri Balkrishna Agarwal admitted to clandestine production and removal. The Tribunal found that Shri Balkrishna Agarwal's voluntary statements, admitting to various sales practices, formed a valid basis for the duty demand. Citing legal precedents, the Tribunal upheld the confirmation of duty demand, interest, and penalties.

Confiscation of Currency:
The Revenue argued that the currency seized was the sale proceeds of goods removed clandestinely without duty payment, justifying confiscation under the Customs Act and Central Excise Act. The Tribunal agreed with this argument, allowing the confiscation of the currency.

Abatement of Proceedings:
Since Shri Balkrishna Agarwal had passed away, the Tribunal ruled to set aside the penalties imposed on him, as the proceedings against a deceased individual abate.

Revenue's Appeal:
The Revenue appealed against the dropping of duty demand by the adjudicating authority. The Tribunal found no fault in the dropping of demand without documentary evidence, upholding the adjudicating authority's decision.

Operative Order:
The Tribunal upheld the impugned order, dismissing the appeals of the main appellant and the Revenue, except for setting aside the penalty on Shri Balkrishna Agarwal who had passed away during the proceedings.