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2018 (11) TMI 1749 - HC - Central ExciseClandestine Removal - allegation that excisable goods cleared without maintaining statutory records, without issuance of invoices and without payment of central excise duty - opportunity to cross-examine the witnesses - corroborative evidences or not - retraction of statements - HELD THAT - The Adjudicating Authority as well as the Tribunal after examining the factual matrix of the case have recorded concurrent finding that levy of central excise duty and the consequential interest and penalty on the appellant has rightly been imposed. There was sufficient material for arriving at the finding that the appellant was engaged in clandestine removal of excisable goods. Adjudicating Authority has also levied penalty of ₹ 2,00,000/- on the brother of the appellant Shri Ravish Chandra Gupta, who although preferred appeal thereagainst before the Tribunal, which was also dismissed by common order along with appeal of the appellant herein but he chose not to further challenge the judgment of the Tribunal before this Court. In fact, the assessee-appellant filed application for rectification of mistake before the Tribunal. However, after objection by the respondent before this Court, the appellant did not press that application. Retraction of statements - HELD THAT - Initial retraction was made by the appellant by sending a written letter addressed to the Commissioner, Central Excise dated 30-11-2011 but this was not supported by any affidavit. In this retraction letter, he stated that he gave the statement due to mental pressure created by Officers of Central Excise Department, who called him for about 10-12 times from 6-7-2011 to 29-11-2011. This letter of retraction was given five months after the first statement. The appellant therein did not utter a single word that the transactions were relating to his brother. Even after the letter of retraction was given on 30-11-2011, statement of the appellant assessee was again recorded on 12-12-2011 wherein also he reiterated his earlier statement and stated that he gave the earlier statements without any pressure. Thereafter again on 15-12-2011 his statement was recorded on seventh consecutive occasion, wherein he reiterated his earlier statement and stated that earlier statements were given by him without any pressure - Significantly enough, when the assessee filed reply to show cause notice on 21-1-2013, he for the first time made reference to the affidavit of his brother but did not make any reference to his retraction letter dated 30-11-2011. It is thus clear that the statements of the appellant were recorded on as many as seven occasions during the period of six months, but he could not give any satisfactory answer to the different queries posed to him. It is clear that there was sufficient material available before the Adjudicating Authority to hold that excisable goods were removed clandestinely as non-excisable goods. This is also explained from the voluntarily conduct of the appellant in coming forward to admit so and to pay the excise duty to settle the matter - the matter was remanded back to the Assessing Officer under the Commercial Taxes Department by Rajasthan Tax Board for examination of certain documents produced before it and decide whether the transactions mentioned therein related to the appellant or not and it was concluded that the documents seized by the Commercial Taxes Department belonged to M/s. Future Control Corporation, firm of the appellant s brother and not to the appellant, may be a matter of fact. The Adjudicating Authority found corroboration to his statement from the material gathered during search, post search, statement of driver, some of the customers of the appellant, who admitted that they got their cables manufactured from the assessee; failure of the assessee to file affidavit of any of its helpers, workers, transporters, customers and admission of the assessee that he did not comply the requirement of the Central Excise Department for carrying out job work. All this furnished sufficient basis to the Adjudicating Authority in the present case to pass the impugned order of a reassessment. The Tribunal was fully justified in dismissing the appeal of the appellant. There are no infirmity in the order-in-original passed by the Adjudicating Authority - appeal dismissed - decided against appellant.
Issues Involved:
1. Legitimacy of the documents seized by the Commercial Taxes Department. 2. Alleged clandestine removal of excisable goods by the appellant. 3. Validity of the appellant’s retracted statements. 4. Opportunity to cross-examine witnesses. 5. Imposition of penalty under Section 11AC of the Central Excise Act. 6. Applicability of the Rajasthan Tax Board's findings to the Excise proceedings. Issue-Wise Detailed Analysis: 1. Legitimacy of the documents seized by the Commercial Taxes Department: The appellant contended that the documents seized during the survey by the Commercial Taxes Department belonged to his brother's firm, M/s. Future Control Corporation, and not to him. The Assistant Commissioner, Commercial Taxes, concluded that the documents indeed belonged to the appellant's brother. However, the Tribunal held that the findings of the Commercial Taxes Department did not bind the Excise authorities, who conducted their independent investigation and found sufficient evidence against the appellant. 2. Alleged clandestine removal of excisable goods by the appellant: The appellant was accused of clandestinely removing excisable goods without maintaining statutory records or paying excise duty. The show cause notice demanded recovery of ?1,93,67,191/-. The Adjudicating Authority and the Tribunal upheld the demand based on the evidence gathered during the search, including the appellant’s statements and corroborative material from customers and transporters. 3. Validity of the appellant’s retracted statements: The appellant retracted his statements five months after the initial recording, claiming they were made under duress. However, subsequent statements recorded on 12-12-2011 and 15-12-2011 reaffirmed his earlier admissions. The court emphasized that retraction should be immediate and supported by strong evidence. The delayed retraction was deemed an afterthought and not credible. 4. Opportunity to cross-examine witnesses: The appellant argued that he was denied the opportunity to cross-examine witnesses whose statements were relied upon. This argument was raised for the first time before the High Court and was not considered by the Tribunal. The court noted that the appellant did not take this stand before the Tribunal, and thus, it could not be entertained at this stage. 5. Imposition of penalty under Section 11AC of the Central Excise Act: The appellant challenged the imposition of a penalty equivalent to the duty amount under Section 11AC of the Act. The court upheld the penalty, noting that the appellant’s conduct and the corroborative evidence justified the imposition of the penalty for clandestine removal of goods. 6. Applicability of the Rajasthan Tax Board's findings to the Excise proceedings: The appellant argued that the Rajasthan Tax Board's findings, which concluded that the seized documents belonged to his brother, should influence the Excise proceedings. The court held that the Excise authorities conducted an independent investigation and gathered sufficient evidence to support their findings, independent of the Commercial Taxes Department's inputs. Conclusion: The High Court dismissed the appeal, affirming the Tribunal's judgment and the Adjudicating Authority's order. The court found that there was sufficient material to support the conclusion that the appellant was engaged in clandestine removal of excisable goods and upheld the imposition of duty, interest, and penalty. The appellant's arguments regarding the retracted statements, cross-examination, and reliance on the Rajasthan Tax Board's findings were rejected.
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