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TMI Blog2013 (6) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner. Whether the Tribunal below committed substantial error of law in overlooking the fact that Rule 25 of Central Excise Rules speaks of excisable goods which is not applicable to the case of the petitioner in view of the Notification dated 1st March 2003." 2. We heard learned Advocate Mr. D.K. Trivedi for the appellants in both the Appeals and learned Advocate Mr. Darshan M. Parikh for the respondent-Department, at length. 3. The relevant facts involved in the Appeals may be set out first. M/s. Suntrek Private Limited was engaged in the manufacture of Aluminum Sections, which are excisable items falling under the relevant Heading in the First Schedule of the Central Excise Tariff Act, 1985. The appellant-Company carried on its business as a Small Scale Industry. 3.1 The Officers of the Central Excise Department, acting on intelligence report, visited the factory premises of the appellant on 1st July, 2008. In course of the investigation, on verification of the stock of finished goods lying the factory premises, it was noticed that the appellant had not maintained any books of accounts and the records regarding the stock of the goods lying in the factory as well as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g status of Small Scale industry and its total clearances in a financial year was below the limit of Rs. 1,50,000/- described in the Notification No. 8 of 2003, dated 1st March, 2003 and therefore, the appellant was enjoying the exemption. It was further submitted that in that view, it was not necessary to maintain the accounts for the purpose of central excise. He, however, submitted that under other applicable laws, the accounts were being maintained and they were even audited. It was further submitted that the show cause notice and the consequential order of confiscation and penalty passed only on the basis of statement dated 1st July, 2008 of the Director Sandeep R. Patel got recorded by the officers on the date of inspection. It was submitted that there was no other evidence and that the statement relied upon was validly retracted. 4.1 It was further submitted that the value of goods lying in the factory premises could not have been the basis for coming to the conclusion that the goods were clandestinely cleared, as there was neither any evidence nor were the details of any goods having been actually cleared in illicit manner. The learned advocate for the appellant submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply. The decision of the lower authorities confirmed by the Tribunal rested on the reasoning that the appellant having not maintained the accounts under the excise law and that there was clandestine removal of goods, it was liable to the action of confiscation and penalty. 5.2 Notification No. 8 of 2003 provide for SSI Exemption to the manufactures not availing CENVAT. Relevant part of the said Notification is extracted hereunder : "In exercise of the powers conferred by sub section (1) of section 5A of the Central Excise Act, 1944 (1 of 1994) (herein after referred to as the Central Excise Act) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 8/2002-Central Excise, dated the 1st March, 2002, published in the Gazette of India vide number G.S.R.129(E), dated the 1st March, 2002, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts clearances, specified in column (2) of the Table below (hereinafter referred to as the said Table) for home consumption of excisable goods of the description specified in the Annexure appended to this notification (hereinafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came to be retracted by affidavit dated 26th July, 2008, the relevant portions from the retracting affidavit are reproduced hereinbelow : At the entire of the investigation and after made punchnama as per them version, they called two persons from out side and taken signature of these two persons on punchnama along with me. After completion as above, in my utter surprise they to record my statement at weedy hours without issuing me "SUMMONS" - as required under law - till this date. I politely refused for the same. But they have taken me under coercion and duress for statement proceeding. For buy peace from the officers, I have surrendered myself for strenuous exercise held by officers at weedy ours as to myself was exhausted during the material time. "During the course of statement proceeding, they started to interrogate me in context to our involvement in suppression of production as well as cleared our product without issuing invoices or Bills and thereby our firm has suppressed aggregate clearance value and not followed the C. Ex. Law & procedure and accordingly they have recorded my statement as per them palatable version," is contrary to the correct facts. The statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion made by an accused person is irrelevant in a criminal proceeding, If the making of the confession appears to the court to have been caused by any inducement, threat or promise, having reference to the charge against the accused person, proceeding from a person in authority and sufficient in the opinion of the court, to give the accused person grounds, which would appear to him reasonable, for supposing that by making it he would gain any advantage or avoid any evil of a temporal nature in reference to the proceedings against him." 6.3. Section 14 of the Central Excise Act, 1944 which is similarly worded as Section 108 of the Customs Act, 1962, deals with the powers of the empowered Central excise officers to summon persons to give evidence and produce documents in any inquiry which such officer is making for any purposes of the Act. The principles regarding evidentiary value of confessional statements got recorded under such provision are laid down by the Courts. In CCE v. Duncan Agro Industries Ltd. [(2000) 7 SCC 53 = 2000 (120) E.L.T. 280 (S.C.)] with reference to Section 108 of the Customs Act, the Apex Court opined as under : "12.... The inculpatory statement made by any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uirement is that it may appear to the court as such." "Whereas mere retraction of a confession may not be sufficient to make the confessional statement irrelevant for the purpose of a proceeding in a criminal case or a quasi-criminal case but there cannot be any doubt whatsoever that the court is obligated to take into consideration the pros and cons of both the confession and retraction made by the accused. It is one thing to say that a retracted confession is used as a corroborative piece of evidence to record a finding of guilt but it is another thing to say that such a finding is arrived at only on the basis of such confession although retracted at a later stage." 6.6 The statement in question dated 1-7-2008, if examined closely in light of the above test, as seen from the copy thereof which is on record of the appeal at page 11, it was admittedly written by the Inspector, Central Excise, Morbi and the appellant stated to have put his signature below the same. When the said statement was read, it contained repeatedly made self-incriminatory statements and confessions about receiving of amount in cash through Angadia without receipts in the last financial year. A direct confes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... afterthought. The regular accounts under the excise law were not maintained by the assessee considering that since the exemption limit in the said Notification applied to it, maintaining of accounts for the excise purpose was not required. It is not disputed that the assessee was otherwise maintaining the accounts for the purpose of other laws like Sales Tax Act, Sales Tax Registration and its accounts were audited in accordance with the provisions of the Companies Act, 1956. In the Order-in-Original dated 17-6-2009, the adjudicating authority itself observed that there were no statutory records or excise records as they were dispensed with by the department since 2000 as a measure of simplification and the every manufacturer was required to maintain his own records and to device to his own record keeping method depending upon the accounting requirements. In this view and given the facts and circumstances of the case, the conclusion that the assessee had deliberately not maintained the accounts under the excise law could not stand and such a finding could be said to be baseless. 6.9 Even if the case of the department is taken at its best value, admittedly the total clandestine cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not known and is ambiguous. 7. In light of the foregoing discussion, approach of the Central Excise Authority was erroneous and the findings arrived at by the learned Tribunal were not tenable at law. Once the sole basis of confessional statement adopted by the Authority in basing the case against the assessee was found to be an unreliable piece of evidence, inferences and conclusions about clandestine removal of goods fail to sustain. They were rendered in the realm of propositions and suppositions. It could not be said that the assessee deliberately not maintained the accounts with an intention to evade the duty. 8. Referring to the questions of law formulated, it is held that the Tribunal committed substantial error of law in passing the order impugned in the present Appeals by totally overlooking the effect of Notification No. 8/2003-C.E., dated 1-3-2003 exempting the clearance upto aggregate of Rs. 1,50,000/-, which is applicable to the facts of the appellant. It is further held that the Tribunal committed a substantial error of law by overlooking that in view of Notification No. 8/2003-C.E., dated 1st March, 2003, Rule 25 of the Central Excise Rules, 2002 would not be a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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