2017 (3) TMI 1350 - AT - Central Excise

Clandestine removal - M/s. HSAL cleared 3419.491MT of SS Flats cleared clandestinely valued at ₹ 8.25 Crores involving Central Excise duty of ₹ 1.19 Crores - Held that - though the statement of Shri Bijendra Kumar Arya stands retracted, its reliability should be evaluated on the basis of corroborating evidences and the conduct of the party. The statement given by him cannot be brushed aside simply because it has been retracted. The investigation has established the modus-operandi adopted for evasion of duty i.e. to use their own trucks to transport the accounted as well as unaccounted and clandestinely cleared goods to the transshipment centre at Wazirpur Industrial Area, New Delhi where Shri Bijendra Kumar Arya will receive all the goods. He then further arranges to dispatch these with the help of various transporters and consignment agents. From the recovered note-books (diaries) it is evident that Shri Bijendra Kumar Arya has been unloading both accounted as well as clandestinely cleared goods. The record of cash receipts indicates that the sale proceeds of unaccounted goods are received in cash. The allegation of clandestine removal has been established by the Revenue against the appellant. While the onus is on the Revenue to establish clandestine removal, they are not required to prove the case with mathematical precision as such a case involves deliberate and well thought out modus-operandi to evade duty. Appeal dismissed - decided against appellant.

Issues Involved:
1. Ownership and attribution of seized documents.
2. Reliability of the retracted statement and cross-examination.
3. Charge of clandestine removal and expert opinions.

Issue-wise Detailed Analysis:

1. Ownership and Attribution of Seized Documents:
The primary issue was whether the documents seized from the premises at A-31, Wazirpur Industrial Area, New Delhi, pertained to M/s. HSAL and if the entries in the five "Neelgagan" diaries and the loose sheets could be attributed to Shri Bijendra Kumar Arya. During the search on 06.10.1994, officers recovered these diaries, and a detailed statement from Arya was recorded, where he explained the entries in the diaries, confirming that they were maintained by him. He identified entries covered by invoices/gate-passes and those indicating evasion of Central Excise duty. The appellant contested this evidence, arguing that Arya retracted his statement and that the handwriting in the diaries did not match Arya's. However, the tribunal found the statement reliable, noting that the detailed entries matched the invoices/gate-passes, lending credibility to the diaries' contents.

2. Reliability of the Retracted Statement and Cross-examination:
The appellant argued that Arya's statement should be ignored as it was retracted and he was not produced for cross-examination. The tribunal noted that Arya's detailed statement, given during the search, was corroborated by other evidence, including matching truck numbers and transport details. The retraction was considered an afterthought, influenced by the appellant. The tribunal also addressed the non-attendance of Arya for cross-examination, noting that summons were issued, but Arya did not present himself, likely under the appellant's influence. Thus, the tribunal upheld the reliability of Arya's statement despite the retraction and absence for cross-examination.

3. Charge of Clandestine Removal and Expert Opinions:
The appellant contested the charge of clandestine removal, presenting expert opinions on electricity consumption and production capacity. They argued that their production was consistent with industry norms and that no unaccounted goods were transported, supported by certificates from local Sales Tax Authorities and Haryana State Electricity Board. However, the tribunal found that the expert opinions did not conclusively prove that the appellant could not have produced the goods alleged to be cleared clandestinely. The tribunal noted that the appellant had additional power sources (DG Sets) not accounted for in the expert reports. The tribunal also addressed the argument regarding cash receipts, stating that the evidence of cash transactions for unaccounted goods could not be ignored, as clandestine removal is inherently difficult to prove with mathematical precision. The tribunal concluded that the case was established on the preponderance of probability, not requiring the same level of proof as criminal proceedings.

Conclusion:
After considering the voluminous records, facts, and circumstances, the tribunal upheld the charge of clandestine removal against the appellant. The tribunal emphasized that in quasi-judicial proceedings, the standard of evidence is based on the preponderance of probability rather than beyond reasonable doubt. The appeal was dismissed, and the impugned order was upheld.

Result:
The appeal is dismissed.

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