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2019 (5) TMI 508 - HC - Central Excise


Issues Involved:
1. Whether retracted statements recorded under Section 14 of the Central Excise Act, 1994 could have been used as admissions.
2. Whether the Tribunal committed an error in holding that there was no material for making the order and not considering the relevant material produced before the adjudicating authority.

Issue-Wise Detailed Analysis:

Issue 1: Use of Retracted Statements as Admissions
The court examined whether retracted statements recorded under Section 14 of the Central Excise Act, 1994, could be used as admissions. The Tribunal had set aside the Commissioner’s order, which had confirmed the duty and penalties based on these statements. The Commissioner had considered the retracted statements along with corroborating material. The court noted that the retraction of statements by the respondents was not immediate, except for one individual, and many statements were consistent with the evidence found during the searches. The court cited precedents, including the case of K.I. Pavunny Vs. Asstt. Collr. (HQ.), C. EX. Collectorate, Cochin, which established that retracted statements could be used if there was material for general corroboration. The court concluded that the statements could be used as admissions in relation to the material and private documents recovered.

Issue 2: Error by Tribunal in Considering Material Evidence
The court scrutinized whether the Tribunal erred in its judgment by not considering relevant material evidence. The Commissioner had based his findings on extensive evidence, including private documents, statements of witnesses, and records from suppliers. The court listed detailed circumstances and evidence, such as the recovery of unaccounted cash, discrepancies in stock records, and the use of unaccounted raw materials. The Tribunal had failed to appreciate this material evidence, which corroborated the retracted statements. The court emphasized that the Tribunal should have considered the corroborative evidence and given reasons for setting aside the Commissioner’s findings. The court held that the Tribunal’s decision was flawed as it did not consider the substantial material evidence presented.

Conclusion and Order
The court concluded that the statements recorded under Section 14 of the Act could be used as admissions despite retraction, supported by corroborative material. It found that the Tribunal’s decision was legally unsound due to its failure to consider relevant evidence. Consequently, the court set aside the Tribunal’s decision and remanded the matter back to the Customs, Excise, and Service Tax Appellate Tribunal for fresh consideration. The Tribunal was directed to decide the appeal within four months from the receipt of the judgment. Pending civil applications were disposed of.

 

 

 

 

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