1988 (3) TMI 211 - AT - Central Excise

Summary

Issues:
- Duty demand for clearing biris without payment and without bringing them into Central Excise accounts.
- Imposition of penalty on the appellant.
- Reliance on confessional statements and retraction by the appellant and Sivalingam.
- Allegation of clandestine production and removal of goods without due accountal.
- Failure to discharge the onus of proving the allegations.
- Appellant's defense based on retraction of statements and lack of corroboration.
- Previous violations by the appellant company.
- Veracity of statements and supporting documents.
- Validity of retracted statements.
- Appellant's submission regarding physical control over operations.
- Comparison of accounts and discrepancies.

Analysis:

The judgment addresses the issue of duty demand and penalty imposition on the appellant for clearing a significant quantity of biris without payment or proper accountal in Central Excise records. The appellant contested the case primarily based on the retraction of confessional statements by both the appellant and Sivalingam, highlighting lack of corroboration and alleging false information by a disgruntled former employee. The defense also emphasized the failure of the department to conclusively prove clandestine production and removal of goods without due accountal, citing legal precedents and the appellant's operation under physical control.

The tribunal examined the facts, including statements and documents, to determine the veracity of the confessions and retractions. It noted discrepancies in accounts, with significant differences in the quantity of biris supplied by Sivalingam compared to the appellant's records. The detailed statements of Sivalingam and the appellant, supported by documentary evidence, were considered substantial evidence despite later retractions. The tribunal found the retraction to be an afterthought due to the delayed nature and lack of substantial grounds, especially as the statements were corroborated by seized records.

Ultimately, the tribunal upheld the duty demand and penalty imposition, dismissing the appellant's arguments. The decision was based on the credibility of the confessional statements and supporting documents, despite the subsequent retractions. The judgment highlights the importance of corroborative evidence and the timing of retractions in assessing the validity of statements in cases of alleged clandestine activities.