2018 (7) TMI 609 - AT - Central Excise

Clandestine removal - Man Made Fabrics - cross-examination of panchas denied - retraction of statements - Held that - Even if, retraction of Shri. Manharlal R. Bhachkaniwala is considered as acceptable, there are ample of evidences such as the Note Book recovered from the appellant s premise under the Panchanama which was further corroborated by the statement of Merchant Manufacturer who admitted that they have received the processed Man Made Fabrics from the appellant to whom the Gray Fabrics was supplied. Further, the Revenue could laid their hands only in respect of 22 Merchant Manufacturer while 27 merchant s manufacturer statement could not be recorded - the demand against appellant in respect of all the Merchant Exporter cannot be confirmed. Confiscation of Land, Building, plant and Machinery - Held that - In consideration of overall facts and circumstances of the case and reduction of demand to substantial extent the confiscation of Land, Building, plant and Machinery is not justified, therefore, the confiscation is set aside. The total demand should be made only on the quality of Man Made Fabrics relates to 22 Merchants Manufacturer, the duty of ₹ 7,55,161/- if paid by Merchant Manufacturer, the same may be reduced from our re-quantified demand against the appellant - matter remanded for re-quantification - appeal allowed by way of remand.

Summary

Issues:
1. Appeal against Order in Original passed by Commissioner in De novo adjudication.
2. Allegations of evasion of Central Excise duty on Man Made Fabrics.
3. Consideration of retraction made by partner of the firm.
4. Discrepancies in investigation and evidence presented.
5. Confiscation of Land, Building, Plant, and Machinery.

Analysis:
1. The appeal was directed against the Order in Original passed by the Commissioner in De novo adjudication, following a remand by the Tribunal in an earlier round. The appellant was engaged in processing Man Made Fabrics on job work basis, with allegations of not accounting for received Grey Fabrics and clearing processed fabrics without duty payment. The adjudicating authority confirmed evasion of duty and imposed penalties, leading to the appeal.

2. The appellant's consultant highlighted deficiencies in the order, including the failure to consider the defence reply, incomplete investigation of merchants, and lack of interrogation of key persons. The appellant argued for reduction of demand based on previous payments made by merchants. The consultant also questioned the capacity of machinery for the alleged production volume.

3. The issue of retraction made by the partner of the firm was a crucial point of contention. The Tribunal's earlier direction emphasized the need for proper consideration of the retraction and related evidence. The Commissioner's decision to uphold the evasion charges was based on various evidences, including recovered Note Books and Challans, and statements from Merchant Manufacturers.

4. Discrepancies in the investigation process were raised, such as contradictions in the quantity cleared, lack of cross-examination of witnesses, and incomplete recording of statements. The appellant argued that demand related to all 27 merchants could not be confirmed without proper evidence and correlation.

5. The judgment addressed the confiscation of Land, Building, Plant, and Machinery, concluding that it was not justified considering the reduced demand. The matter was remanded to the adjudicating authority for re-quantification of the demand based on the findings and observations made during the appeal process.

This detailed analysis of the judgment covers the key issues involved, including the retraction, evidentiary considerations, discrepancies in investigation, and the decision on confiscation, providing a comprehensive overview of the legal proceedings and outcomes.