1991 (9) TMI 76 - HC - Central Excise

Summary

Issues Involved:

1. Admissibility of statements recorded by Central Excise Officers under Section 14 of the Central Excise Act.
2. Voluntariness and admissibility of confessional statements recorded by Central Excise Officers.
3. Evidence supporting the second charge of clandestine manufacture and removal of cigarettes.
4. Evidence supporting the third charge of evading excise duty by deducting post-manufacturing expenses.
5. Evidence supporting the fourth charge of unauthorized storage of cigarettes.
6. Evidence supporting the first charge of criminal conspiracy to evade excise duty.

Detailed Analysis:

1. Admissibility of Statements Recorded by Central Excise Officers:

The trial court rejected the statements recorded by Central Excise Officers under Section 14 of the Central Excise Act, as the witnesses were alive and their statements were deemed irrelevant. The court found that only statements made by deceased individuals could be considered admissible under Section 9D of the Central Excise Act. The court held that the statements of witnesses recorded by Central Excise Officers who are alive cannot be treated as substantial evidence in criminal prosecution.

2. Voluntariness and Admissibility of Confessional Statements:

The trial court discarded the confessional statements recorded by Central Excise Officers from the accused, deeming them involuntary. The court noted that the officers failed to follow the procedure prescribed under Section 164 of the Code of Criminal Procedure, which requires administering a warning that the statements could be used against the accused. The court held that non-compliance with this mandatory provision rendered the statements inadmissible in evidence.

3. Evidence Supporting the Second Charge:

The prosecution alleged that the accused used unaccounted tobacco for clandestine manufacture of cigarettes, evading excise duty. The trial court found no evidence to support this claim, noting that the factory was under the physical control of Central Excise authorities, making it unlikely for unaccounted production or removal of cigarettes. The court concluded that the prosecution failed to prove that unaccounted tobacco was used for manufacturing cigarettes.

4. Evidence Supporting the Third Charge:

The prosecution claimed that the accused evaded excise duty by deducting post-manufacturing expenses. The trial court held that these expenses were not subject to duty, following a Division Bench decision that excluded post-manufacturing expenses from the normal price. The court noted that the assessment of duty was still pending before Central Excise authorities, making the prosecution on this charge premature.

5. Evidence Supporting the Fourth Charge:

The prosecution alleged that 520 cartons of cigarettes were stored in an unauthorized godown with the intent to evade excise duty. The trial court found that merely storing the cartons in an unauthorized godown did not constitute evasion of duty, as no duty was payable at that stage. The court held that the accused had not committed any offense or even attempted to commit an offense by storing the cartons in an unauthorized location.

6. Evidence Supporting the First Charge of Criminal Conspiracy:

The trial court found no evidence to prove the conspiracy to evade excise duty, noting that the prosecution relied primarily on statements recorded by Central Excise officers, which were deemed inadmissible. The court concluded that the prosecution failed to prove the charge of conspiracy.

Conclusion:

The appeal against the acquittal was dismissed, as the trial court had thoroughly considered the evidence and concluded that the prosecution failed to establish the charges. The petition for leave to file the appeal was also dismissed, affirming the trial court's findings.