2008 (7) TMI 220 - AT - Central Excise

Clandestine removal statements of partners admitting the fact, are supported by corroborative evidence which were recovered from the factory - traders have admitted that they have given only bills/invoices and bills/invoices of fictitious firms and have not supplied the goods no explanation from appellant - denial of Cross-examination has not adversely affected the defence of appellant no violation of natural justice demand is sustainable appeal of assessee is rejected

Summary

Issues involved:
- Failure to provide cross-examination and extension of time for reply
- Allegations of suppressed production and illicit clearance
- Denial of statements made under pressure
- Involvement of separate entities in the case
- Retractions of statements and evidentiary value

Analysis:
1. Failure to provide cross-examination and extension of time for reply:
The appellants contended that they were deprived of their right to cross-examine and request an extension of time to file a reply. However, the tribunal noted that the appellants did request additional time, but the reasons provided for the delay were not satisfactory. The tribunal found that the purpose of cross-examination was not clearly explained by the appellants, and the delay in submitting the reply without a valid explanation did not support their claim of denial of natural justice.

2. Allegations of suppressed production and illicit clearance:
The case involved allegations of suppressed production and illicit clearance by the appellants to stay within the exemption limit for small-scale units. The tribunal confirmed the demand of duty and penalties based on preventive checks and document verification. The appellants contested the demand and penalties imposed, leading to the tribunal's review of the case.

3. Denial of statements made under pressure:
The appellants claimed that certain statements were made under pressure and later retracted. However, the tribunal found that the retractions made after the issuance of the show cause notice held no value, citing precedents where such retractions were deemed insignificant. The tribunal emphasized that the statements were supported by corroborative evidence found at the factory, which undermined the retraction's credibility.

4. Involvement of separate entities in the case:
The distinction between Laxmi Tex Chem and Laxmi Chemicals as separate entities was raised. The department alleged that Laxmi Chemicals sold unaccounted goods manufactured by Laxmi Tex Chem. The tribunal found that the evidence, including bills/invoices from fictitious firms and traders, supported the department's case, despite the appellants' denial of the partnership between the two entities.

5. Retractions of statements and evidentiary value:
The tribunal highlighted that the retraction of statements by the appellants did not diminish the evidentiary value of the statements, as they were supported by recovered documents and corroborative evidence. Citing legal precedents, the tribunal emphasized that retractions made post-show cause notice issuance were not considered valid, reinforcing the credibility of the original statements.

In conclusion, the tribunal rejected the appeals filed by the appellants based on the detailed analysis of the issues raised, including the failure to provide cross-examination, allegations of suppressed production, denial of statements made under pressure, involvement of separate entities, and the evidentiary value of retractions. The judgment emphasized the importance of corroborative evidence and adherence to legal principles in adjudicating the case.