2014 (7) TMI 926 - HC - Central Excise

Clandestine clearance - onus to prove - tribunal concluded that revenue has failed to establish the clandestine clearance of the goods by the assessee - respondent, inspite of it being admitted in its Settlement Application - application before settlement commission failed - Held that - If the contention on behalf of the appellant is accepted, in that case, there is no question of further adjudication by the Central Excise Officer with respect to the amount admitted by the assessee while submitting the application before the Settlement Commission submitted under Section 32E(1) of the Act. Once the application or proceedings before the Settlement Commission fails, the Central Excise Officer is required to adjudicate the entire proceedings and show cause notice. - appeal dismissed - decided against the assessee.

Summary

Issues involved:
1. Whether the Tribunal was justified in holding that the revenue failed to establish clandestine clearance of goods by the respondent?
2. Whether the Tribunal was justified in holding that certain statements were retracted and cannot be relied upon?
3. Whether the respondent is entitled to the benefit of cum-duty price if the demand is held to be sustainable?
4. Whether penalties and interest may be imposed under specific sections of the Central Excise Act if the demand is held to be sustainable?

Analysis:

Issue 1:
The appellant argued that the Tribunal erred in not considering the admission made by the respondent in the Settlement Application under Section 32E(1) of the Central Excise Act, 1944. The appellant contended that this admission should establish the clandestine clearance of goods. However, the court clarified that such an admission does not automatically establish liability, as the materials and evidence presented before the Settlement Commission are subject to further adjudication by the Central Excise Officer. The court emphasized that the admission before the Settlement Commission does not preclude the need for a full adjudication process by the Central Excise Officer. Consequently, the court dismissed the appeals related to this issue.

Issue 2:
The court admitted certain appeals to consider whether the statements of specific individuals were retracted and if they could be relied upon to establish clandestine clearance of goods by the respondent. The court will assess the credibility of these statements and other corroborating evidence to determine their evidentiary value in the case.

Issue 3:
In one of the admitted appeals, the court will also consider whether the respondent is entitled to the benefit of cum-duty price if the demand is found to be sustainable. This issue will involve an examination of the legal provisions and factual circumstances to determine the applicability of this benefit to the respondent.

Issue 4:
Another admitted appeal raises the question of whether penalties and interest can be imposed under specific sections of the Central Excise Act if the demand is held to be sustainable. The court will assess the legal provisions and factual findings to determine the potential imposition of penalties and interest on the respondent if the demand is upheld.

In summary, the judgment addressed various issues related to the establishment of clandestine clearance of goods, the credibility of statements, entitlement to benefits, and the imposition of penalties and interest under the Central Excise Act. The court provided detailed reasoning for dismissing certain appeals and admitted others for further consideration based on the legal arguments and evidence presented.