2014 (11) TMI 203 - AT - Central Excise

Clandestine removal of goods - Investigation not conducted by Revenue - Held that - It is observed from the statements of Respondents recorded in the show cause notices that Respondents themselves have confirmed the factual details regarding clandestine activities given in the registers recovered from their premises. The statements given were voluntary as the same were not retracted for nearly four years. It can not be expected from the Revenue to investigate for alternate evidences when respondents did not retract the statements during investigation/ adjudications. It is also evident from the records that no purchase bills were found with respect to purchase of scrap shown in the registers recovered from the premises of the respondents for which payments were only made in cash as admitted. Clandestine activities are corroborated by the transporters. When respondents did not give details of the buyers of the goods clandestinely removed Revenue cannot be faulted with for not investigating the area of extra raw materials purchased or extending investigation into the buyers of the goods clandestinely removed etc. In view of the above appeals filed by the Revenue are required to be allowed by setting aside the orders passed by the first appellate authority - Decided in favour of revenue.

Summary

Issues involved:
- Appeal against OIA No. 157-158/2007-AHD-II-CE/RAJU/COMMR-A dated 01.11.2007
- Allegations of clandestine removal of goods without payment of duty
- Adequacy of documentary evidence against the Respondent
- Retraction of confessional statements by key individuals
- Corroboration of clandestine activities by transporters
- Compliance with legal precedents in similar cases

Analysis:
1. The appeals were filed by the Revenue against the Order-in-Appeal (OIA) issued by the first appellate authority, which was a result of a remand order. The case involved allegations of clandestine removal of goods without payment of duty by the Respondent, engaged in the manufacture of CTD Bars and Round Bars. The first appellate authority had ruled in favor of the Respondent, citing inadequate documentary evidence against them.

2. During the hearings, the Respondents did not appear, while the Revenue argued that the confessional statements of key individuals were retracted only after a significant time gap. The Revenue emphasized that these statements provided crucial details corroborating the clandestine activities, supported by legal precedents such as Surjeet Singh Chhabra vs. UOI and CCE Mumbai vs. M/s. Kalvert Foods India Pvt. Limited.

3. Upon reviewing the case records, the Tribunal observed that the statements of the individuals from related industries confirmed the factual details of clandestine activities mentioned in the recovered registers. The Tribunal noted that the statements were voluntary and not retracted for a considerable period, indicating the personal knowledge of the Respondents in the matter. Additionally, the absence of purchase bills for scrap purchases, payments made in cash, and corroboration by transporters further supported the Revenue's case.

4. The Tribunal referenced legal precedents to emphasize the admissibility of voluntary statements containing detailed operational insights, which could only be known to those involved in the clandestine activities. The lack of details provided by the Respondents regarding buyers of the goods removed clandestinely was highlighted, indicating the Revenue's inability to investigate further without cooperation. Ultimately, the appeals filed by the Revenue were allowed, setting aside the orders of the first appellate authority and restoring the decisions of the adjudicating authority.

5. The judgment, delivered by Mr. H.K. Thakur, concluded on 26.09.2014, highlighted the importance of voluntary statements, corroborative evidence, and compliance with legal precedents in cases involving clandestine activities and duty evasion.