2023 (5) TMI 1331 - AT - Central Excise

Clandestine removal - wire rods - corroborative evidence or not - Penalty u/r 26 of CER - penalty imposed merely on the basis of the statement of the co-accused - whether the appellant had conducted himself in a manner to invite the necessary ingredients of Rule 26 of the Central Excise Rules, 2002 and whether, the case laws relied upon in support, come to the rescue of the appellants? - HELD THAT - From the facts on record, it is noticed that the appellant when confronted with computer ledgers retrieved from the hard disk of computers of SPRML showing the details of clandestine supply of wire rods to the appellants, admitted to have been in receipt of goods indicated. This statement said to be given voluntarily, recorded under Section 14 of the Central Excise Act was never retracted nor any intimation sent to any authority alleging co-ercion, threat, duress etc., under the circumstances the voluntary character of the said statement cannot be doubted. The question thus remains whether the appellant can be held liable on the basis of the statement tendered by the coaccused. The Hon ble Rajasthan Court in the case of ACTO, ANTI EVASION-I, ALWAR. VERSUS KHANDELWAL FOODS PRODUCTS, RAJASTHAN TAX BOARD, AJMER 2016 (10) TMI 1010 - RAJASTHAN HIGH COURT had held a delayed retraction and made before appellate authority to be of no avail. The Hon ble Court observed that the onus was on the assessee to bring to the notice of higher officials, if any wrong had happened. It is settled law that retraction is to be filed close on the heels of the statement recorded and not before any other authority but the one before whom the said statement was tendered. Also a statement merely alleging as taken under pressure, without any corroborative evidence carries no weight and has been held to be an afterthought. Thus, it is evident from the facts herein that the appellants dealt with the non-duty paid goods knowingly and was consciously aware of their non-duty paid character. By purchasing and selling such goods and dealing in other related manner the appellants have rendered themselves liable for penal consequences. Appeal dismissed.

Summary

Issues involved: Central Excise duty evasion, Penalty imposition u/r 26 of Central Excise Rules, 2002, Reliance on case laws for defense.

Summary:
The appellant, a proprietary firm engaged in manufacturing and trading activities, was issued a show cause notice for clandestinely procuring wire rods without duty payment. The appellant challenged the orders passed by the Commissioner (A) citing lack of corroborative evidence and failure to establish mens rea for penalty imposition. The appellant relied on case laws to support their defense.

The Anti-Evasion case against the appellant was based on specific intelligence and documents retrieved from another entity. The appellant admitted to receiving wire rods without proper documentation and selling the finished goods in the market. The appellant's involvement in the procurement and sale of non-duty paid goods was established through various pieces of evidence.

The appellant's contention that they cannot be held liable based solely on a co-accused's statement was refuted by the Tribunal. The Tribunal emphasized the voluntary nature of the appellant's admission and the presence of multiple corroborative pieces of evidence supporting the charges.

The Tribunal rejected the appellant's reliance on certain case laws, highlighting the differences in circumstances. Various legal precedents were cited to emphasize the validity of voluntary statements and the consequences of delayed retractions.

Ultimately, the Tribunal found the appellant knowingly dealt with non-duty paid goods and upheld the lower authority's decision to dismiss the appeal. The appellant's actions rendered them liable for penal consequences under Rule 26 of the Central Excise Rules, 2002.

The appeal was dismissed, and the lower authority's order was upheld.