2019 (5) TMI 220 - HC - Central Excise

Clandestine removal - retraction of statements - burden of proof - cross-examination of persons denied - it was also alleged that Tribunal did not consider the movement of the goods, passing of consideration, which are contemporaneous records maintained and filed by the appellant by following mercantile system of accounting - HELD THAT - It has to be pointed out that the appellant assessee, vide statement dated 14.9.2012, admitted the guilt. In fact, the CENVAT credit, which was availed, was reversed voluntarily. After about three years, the appellant assessee retracted the statement on 19.2.2015. In the interregnum, the appellant assessee did not raise any plea with regard to the allegation of coercion and duress while recording the statement dated 14.9.2012. Therefore, the Adjudicating Authority, the Appellate Authority and the Tribunal were right in rejecting the retracted statement dated 19.2.2015. The Tribunal considered the contentions raised by the appellant assessee and assigned reasons as to why the contentions advanced by the assessee do not merit consideration. Thus, the Tribunal passed a speaking order and by way of this appeal filed by the assessee under Section 35G of the Central Excise Act, 1944, we cannot be called upon to reappreciate the evidence, which was considered and appreciated by the Adjudicating Authority, the First Appellate Authority and the Tribunal. No substantial question of law arises for consideration in this appeal - appeal dismissed.

Summary

Issues:
- Burden of proof for penalty based on retracted statement
- Opportunity for cross-examination in findings against appellant
- Consideration of contemporaneous records in mercantile system of accounting

Burden of Proof for Penalty Based on Retracted Statement:
The appellant challenged the Tribunal's decision regarding the burden of proof for imposing a penalty based on a retracted statement. The statement in question was given by the appellant's proprietor on 14.9.2012, admitting guilt, which was later retracted on 19.2.2015. The Adjudicating Authority, Appellate Authority, and Tribunal rejected the retracted statement, as the appellant did not raise coercion or duress claims when initially admitting guilt. Therefore, the rejection of the retracted statement was deemed justified by the courts.

Opportunity for Cross-Examination in Findings Against Appellant:
The appellant raised concerns about not being given an opportunity to cross-examine the person whose statement was relied upon against them. The appellant contended that this violated their rights to a fair hearing. However, the courts upheld the decisions of the lower authorities, emphasizing that the Tribunal provided reasons for not considering the appellant's contentions, and the appellant's appeal did not warrant reevaluation of the evidence already considered by the Adjudicating Authority, Appellate Authority, and Tribunal.

Consideration of Contemporaneous Records in Mercantile System of Accounting:
The appellant argued that the movement of goods and the passing of consideration were evidenced by contemporaneous records maintained in accordance with the mercantile system of accounting. Despite the appellant's submissions, the Adjudicating Authority, Appellate Authority, and Tribunal found discrepancies between the invoices submitted and the bank statements, concluding that the appellant failed to establish a correlation between the amounts received and the invoices raised. Consequently, the courts dismissed the appellant's appeal, stating that no substantial question of law arose for consideration in this case.

In conclusion, the High Court of Madras upheld the decisions of the lower authorities, dismissing the appellant's appeal against the penalty imposed, as the courts found no merit in the appellant's contentions regarding the burden of proof, cross-examination, and consideration of contemporaneous records.