2021 (8) TMI 1225 - AT - Central Excise

Clandestine removal - cigarettes - corroborative evidence has been produced by the Revenue to allege that clandestine removal of goods or not - statements taken under coercion or not - HELD THAT - The facts of the case which are in dispute are that during the course of investigation, excess tobacco of 210 kg alongwith other material for manufacturers Hitler Black‟ Brand Cigarettes were found at the premises of M/s Karsh Enterprises and production was going on. Further, 4,08,000 cigarettes packets of Hitler Brand of 69mm and unaccounted cash was found at the premises of M/s Shardha Traders, Raipur proprietor of Shri Ajay Adwani. These facts were never disputed by the appellants. Moreover, they have made a inculpatory statements. On the basis of that the statements they have been implicated in the matter by alleging the appellants are involved in clandestine removal manufacture and removal of goods - the Hon‟ble Apex Court in the case of COMMISSIONER OF C. EX., MADRAS VERSUS SYSTEMS COMPONENTS PVT. LTD. 2004 (2) TMI 65 - SUPREME COURT has held that what is admitted need not to be proved. In this case, the appellant has admitted the excess stock found during the course of investigation has been procured through illicit manner, in that circumstances, revenue need not to prove that the raw material and finished goods recovered during the course of investigation were procured through licit manner. As the appellants have been failed to brought on record any documents in their favour, the appeal is dismissed.

Summary

Issues: Appeal against duty demand and penalty for clandestine removal of cigarettes.

Analysis:
1. The case involved appeals against an order demanding duty and imposing penalties for clandestine removal of cigarettes. The search conducted at the premises of the manufacturer revealed excess raw materials and production of specific cigarette brands.

2. The appellants argued that there was no corroborative evidence to prove clandestine removal, and the statements obtained were under coercion, seeking to set aside the impugned order. The Revenue, on the other hand, relied on physical stock found during the investigation and unretired statements to support the duty demand and penalties.

3. The Tribunal considered the submissions and facts in dispute, noting the excess stock of raw materials and finished goods found during the investigation at the manufacturer's premises and unaccounted cigarettes and cash at the trader's premises. The appellants did not dispute these facts.

4. The appellants made inculpatory statements during the investigation, implicating themselves in clandestine activities, and failed to retract them or provide documents proving lawful procurement of the goods. The excess stock found during the investigation served as corroborative evidence for clandestine removal.

5. Referring to the legal precedent set by the Hon'ble Apex Court in a similar case, the Tribunal emphasized that what is admitted need not be proved. Since the appellants admitted to the illicit procurement of excess stock, the Revenue was not required to prove the lawful procurement of goods. As the appellants failed to produce any supporting documents, the impugned order was upheld without any infirmity.

6. Consequently, the Tribunal dismissed the appeals filed by the appellants, affirming the duty demand and penalties imposed. The order was pronounced on 27.08.2021.