2022 (5) TMI 983 - AT - Central Excise

Rectification of Mistake - relevancy of statements relied upon - primary challenge made in the original proceedings as well as the proceedings under rectification of mistake is to the fact that statements of various witnesses have been relied without the said statement being tested for relevance under Section 9D of the Central Excise Act, 1944 - HELD THAT - Since there is some documentary evidence available on record and there are various statements which the appellant claims have been obtained under duress reliance on the said statements cannot be placed in absence of the same being tested under Section 9D of the Central Excise Act, 1944. There are no option but to remand the matter to the original adjudicating authority to examine the relevance of the statements under Section 9D of the Central Excise Act and only thereafter, relied on the said statement - appeal allowed by way of remand.

Summary

Issues:
1. Alleged evasion of Central Excise duty by the appellant.
2. Reliance on statements obtained from witnesses without testing for relevance under Section 9D of the Central Excise Act.
3. Admissibility of documentary evidence recovered during the search.
4. Applicability of penalty under Section 11AC of the Central Excise Act.

Analysis:

1. The appellant, a manufacturer of copper ingots, was under scrutiny due to alleged evasion of Central Excise duty related to clandestine manufacture and clearances of copper wire by another entity. Following a search at the appellant's premises, copper ingots, wire, and documents were seized. Subsequently, a show cause notice was issued, leading to an order demanding a substantial amount along with interest and penalty under Section 11AC of the Central Excise Act.

2. The appellant challenged the order before the Tribunal, primarily contesting the reliance on statements of witnesses without proper testing for relevance under Section 9D of the Central Excise Act. The Tribunal, upon review, noted discrepancies in the statements of the proprietor regarding admission of evasion, retractions made, and the circumstances under which the statements were recorded. The Tribunal emphasized the need for a thorough examination of the statements under Section 9D before relying on them for adjudication.

3. Additionally, the presence of documentary evidence recovered from the factory premises and residences was highlighted. The appellant argued that these documents, along with the statements, were obtained under duress and coercion. The Tribunal acknowledged the existence of documentary evidence but stressed the importance of testing the relevance of statements under Section 9D before considering them as evidence.

4. In light of the above considerations, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority. The Tribunal directed the authority to scrutinize the statements under Section 9D of the Central Excise Act before relying on them for further proceedings. The order emphasized the importance of due process and the need for a comprehensive examination of all evidence before making a final determination, keeping all issues open for further review.