2014 (10) TMI 16 - AT - Central Excise

Clandestine removal of goods - Misdeclaration of goods - Held that - Shri Laxmi Kant Pandey, brother of Shri K.K. Pandey, proprietor of the said firm confessed that he was the actual person looking after the day to day affairs of the company. It was also confirmed that the production and clearance recorded in their residential premises was correct and he also testified the details of the production and clearances. It was confirmed that the production was cleared clandestinely without payment of duty. It is also evident from the statements of Shri Mahesh Kumar and Shri Shobh Nath that they had supplied the tobacco and supari which were recovered from the residential premises of the appellants. This is a case where there was no contest of the allegations. The actual allegations have been admitted and confessed. The activity of clandestine manufacture and clearances is clearly manifested. It is clear case of misdeclaration and suppression of production with intent to evade central excise duty to cause subterfuge to the revenue and it leaves no scope for interference in the order-in-original passed by the adjudicating authority which is also confirmed by Commissioner (Appeals) - Decided against Assessee.

Summary

Issues: Allegations of clandestine manufacture and evasion of central excise duty.

Analysis:
1. The case involved a detailed examination of the facts surrounding a raid conducted at the manufacturing premises of a tobacco company. The officers found incriminating documents, raw materials, and unaccounted production of gutkha, leading to the detention and seizure of goods valued at a significant amount.

2. Statements from individuals involved, such as the proprietor's brother and father, confirmed the unauthorized production and storage of raw materials for manufacturing gutkha. The proprietor's absence and the operation of machines without proper records indicated a deliberate attempt to evade excise duty.

3. Further investigations revealed confessions from suppliers of tobacco and supari, supporting the allegations of clandestine production. The detailed diary recovered during the raid provided concrete evidence of the unauthorized production and clearance of gutkha without payment of excise duty.

4. The adjudicating authority and the Commissioner (Appeals) upheld the allegations and ordered confiscation based on the evidence presented. The lack of contestation from the appellants and the admission of guilt reinforced the case of misdeclaration and suppression of production to evade excise duty.

5. The tribunal, after reviewing all the evidence and statements, concluded that the appellants were involved in clandestine manufacture and evasion of central excise duty. The rejection of the appeals was based on the clear manifestation of illegal activities and the lack of grounds for interference in the original orders.

This comprehensive analysis of the judgment highlights the key issues of clandestine manufacture and excise duty evasion, emphasizing the importance of evidence, statements, and legal proceedings in determining the guilt of the appellants.