2018 (7) TMI 524 - AT - Central Excise

Clandestine manufacture and removal - copper wire - third party evidence - Held that - There was a complete admission on the part of the appellant about the documents as were seized by the Department from premises of M/s.Hind Metals and from his own premises and were put to the appellant, that all those pertains to his business and to the companies with whom he has business relations. Despite the retraction of Mr. Alok Aggarwal that too vide a letter dated 19 June, 2012, there has been three more subsequent statements acknowledging the correctness about the goods seized to be meant for clandestine removal and for the documents recovered from residential and factory premises to be related to his company. Thus, there seems no reason for rejecting the 4 statements acknowledging guilt in the light of one letter of retraction - There is sufficient corroboration qua the document recovered from the cabin of the vehicle which was found parked in the factory premises of the appellant at the time of raid. There is sufficient corroboration to the correctness of the contents thereof in the statement of the driver of the said vehicle itself with simultaneous corroboration from the statement of the worker of appellant namely Mr.Jagat Singh that Mr. Subash Yadav was the driver of the said vehicle who used to deliver goods from appellant s factory at the instance of the appellant. The said vehicle was seized from the factory of the appellant loaded with material but with no bill for the same. There is a clear admission for the alleged clandestine removal by the appellant, who could not produce any evidence on record to prove his innocence. Oral grounds of defence could not be corroborated by any documentary evidence - Since the clandestine removal of metal wires stands established on record and there can be no other objective for the same except, the evasion of duty, the penalty as imposed is also not found to have any infirmity. Appeal dismissed - decided against appellant.

Issues Involved:
1. Validity of the statement of the proprietor recorded under duress and coercion.
2. Admissibility of documents recovered from the cabin of a vehicle.
3. Basis of demand relying on presumption/eye estimation for the weight of copper ingots.

Issue-Wise Detailed Analysis:

1. Validity of the statement of the proprietor recorded under duress and coercion:

The appellant argued that the statement of the proprietor, Mr. Alok Aggarwal, was recorded under duress and coercion and thus should not be sufficient to prove the alleged clandestine removal without sufficient corroboration. However, the Tribunal noted that Mr. Aggarwal's statement was given voluntarily, as there was no evidence of coercion or duress. The Tribunal highlighted that Mr. Aggarwal made subsequent statements on 20th November 2012, 27th November 2012, and 14th March 2013, corroborating his initial statement from 15th June 2012, where he admitted to clandestine removal of copper ingots. The Tribunal referenced legal precedents, including the Supreme Court's rulings in K.I.G. Augustine vs. Commissioner of Customs and K.I. Pavunny vs. Asstt. Collector, which state that retracted statements can still be considered valid if there is no evidence of coercion and if corroborated by other evidence. The Tribunal concluded that Mr. Aggarwal's retraction letter dated 19th June 2012 had no legs to stand upon, given the subsequent corroborative statements and the lack of evidence supporting the claim of coercion.

2. Admissibility of documents recovered from the cabin of a vehicle:

The appellant contended that the documents recovered from the cabin of a vehicle parked in their factory premises should not be read against them. The Tribunal, however, found that the documents were admissible as evidence. The driver of the vehicle, Mr. Subash Yadav, admitted that the documents contained details of raw materials and finished goods related to the appellant's business. Mr. Yadav's statement was corroborated by the statements of Mr. Jagat Singh, a worker in the appellant's factory, and Mr. Alok Aggarwal, who acknowledged the business transactions detailed in the documents. The Tribunal emphasized that the documents recovered from the vehicle were directly linked to the appellant’s business activities and thus were valid evidence.

3. Basis of demand relying on presumption/eye estimation for the weight of copper ingots:

The appellant argued that the demand was based on an eye estimation of the weight of copper ingots, which they claimed was not reasonable evidence. They pointed out contradictions in the recorded evidence regarding the weight of the ingots. However, the Tribunal found that Mr. Aggarwal had admitted to the clandestine removal of copper ingots, and the weight of the ingots was roughly around 136 Kg, as per his own admission. The Tribunal noted that the appellant failed to produce any documentary evidence to rebut the discrepancies between their returns and the resumed documents. The Tribunal concluded that the eye estimation of the ingots' weight by the Department, holding them to be 100 Kg each, was reasonable and upheld the demand based on this estimation.

Conclusion:

The Tribunal upheld the impugned order, confirming the clandestine removal of copper ingots by the appellant and the associated demand for ?66,29,476/- along with interest and an equal penalty under Section 11AC of the Central Excise Act. The Tribunal found no infirmity in the order under challenge, emphasizing that the appellant failed to produce any evidence to prove their innocence and that the penalty imposed was justified. The appeal was accordingly rejected.

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