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TMI Blog2014 (2) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... r the fact that Shri Pradeep Khanna was sometimes looking after the affairs of the units belonging to his wife which, as already discussed by us, cannot be made the basis for clubbing the clearances of the units owned by husband and wife. - Benefit of SSI exemption allowed - Decided in favor of assessee. Clandestine Removal - Air-Conditioners / Compressors - sale through dealers - accounting entries of the dealers considered - realizations of unaccounted money - Held that:- When there are dealers appointed by the manufacturers with appropriate price margins who are engaged in such trading activity, an OEM could not have indulged in parallel sales of such large number of compressors because of the market forces and if they indulge in such activity it would have come to the notice of the manufacturer and the representative of the manufacturer testifies that no such trading had come to their notice. So this claim of trading in compressors is a very weak defence. Contention of the appellant that the case is made on assumptions and surmises is not acceptable. Every case is to be decided based on inference to be drawn by a prudent judge from the evidence available. - In a clandesti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers under the name and style of M/s. Thermoking. The said unit of M/s. Thermoking is operating from the year 1977 onwards. Another unit under the name and style of M/s. Flevel International, is also engaged in the manufacture of air conditioners since 1986. 3. The cases against the said appellants M/s. Thermotech originated with the interception of one vehicle loaded with three room air conditioners with grill and filter (Kirloskar compressor) and two room air conditioners with Shreeram compressors. The said vehicle was intercepted on 27-2-1992 and the driver of the vehicle produced invoice dated 27-2-1992 issued by M/s. Thermotech. As there was no duty paying documents accompanying the said goods, the officers detained the goods along with vehicle. In a follow up action, the premises of M/s. Thermotech were put to search. Two room air conditioners in packed and ready to dispatch condition, one air conditioners in packed and ready to dispatch condition, one air conditioner in semi-assembled condition and 15 washing machines in semi-finished condition along with other raw material like sheet metal, bodies of washing machine etc. were found and seized. Various records kept by the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the benefit of Notification No. 175/86. The appellants contended that earlier similar charges of clubbing of clearances among all the manufacturing units were initiated against M/s. Jass Kann International proposing the denial of benefit of Notification No. 175/86 and such proceedings against M/s. Jass Kann International were adjudicated by the Commissioner who vide his Order-in-Original No. CCE/ADJ/JDS/02, dated 30-9-2002 held that the clearances of M/s. Thermoking which is a proprietary unit of Shri Pradeep Khanna cannot be clubbed with the other three units owned by Ms. Neera Khanna. Accordingly, Commissioner extended the benefit of Notification No. 175/86 to M/s. Jass Kann International. It was their contention that the entire facts were in the knowledge of the Revenue and as such it was not open to the Revenue to initiate the same very proceedings against the same appellants, on the same very ground. 6. They also contended that the clearances effected by M/s. Jass Kann International have been held to be falling within the SSI Notification, and the issue on the clubbing stands decided by the Commissioner, the benefit of Notification cannot be denied to the present appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturing air conditioners, cannot be accepted. As regards the manufacturing and clearances of washing machines (609 in no.), confirming demand of Rs. 3,18,946/-, ld. Advocate draws our attention to the cross-examination of Shri Rajesh Kumar laying down that all the goods were cleared on proper invoices. As regards the allegation of manufacture of air conditioners, he submits that Revenue has proceeded on the ground that the description given by them in their invoices relates to the air conditioners. He clarifies that they have cleared room air coolers and the description RAC in their invoices relates to room air coolers whereas Commissioner has held that the same are room air conditioners. By referring to the value as reflected in the invoices, he submits that it is not possible to clear air conditioners at such a low value as reflected in the invoices. Further, there is no evidence of any customer who has received air conditioners from the appellants. 8. As against the above argument, ld. A.R. Shri R.K. Varma appearing for the Revenue submits that admittedly M/s. Thermoking which is a proprietorship concern of Ms. Neera Khanna was using the brand name of Thermoking which admit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. AR further submits that the fact that three units were owned by Ms. Neera Khanna and the fourth was owned by Shri Pradeep Khanna husband of Ms. Neera Khanna and the fact that all were manufacturing more or less same type of goods, would be a relevant criteria to club the clearances of all the four units. The special relationship cannot be ignored for the purpose of Notification No. 175/86. Inasmuch as the total clearances from all the four units have exceeded the eligibility criteria of Rs. 1.50 crores or Rs. 2 crores, the benefit of Notification is required to be denied. 11. As regards the allegation of clearance of air conditioners, he submits that the appellants contention that the same were manufactured on job work basis, cannot be accepted. The job work bills of some of job workers produced by the appellants, in support of their contention reveal that all of them have been prepared by one person in one sitting and there is no variation in the style and tenure of writing. Even at the time of investigation, neither Shri Pradeep Khanna nor Ms. Neera Khanna had ever mentioned about these documents. Further in the sale bills issued by M/s. Thermoking to M/s. Thermotech, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ech. The said clubbing has been done on the ground that Shri Pradeep Khanna was involved in the functioning of two units of Ms. Neera Khanna. The Commissioner in his impugned order has observed that Shri Pradeep Khanna was assisting other unit in procuring raw materials as also sale of the final products of these units. The profit sharing from all the units remained confined to husband and wife and nobody else. As such, he has observed that there remain no room for doubt that the entire operation of the four units has to be seen as a special relationship which cannot be ignored for the purpose of benefit of Notification No. 175/86. 15. We find no merits in the above reasoning of the adjudicating authority. Admittedly he has nowhere referred to any mutuality of interest between the units of husband and units owned by wife. He has observed that lack of mutuality of interest or financial flow back can be only one of the important consideration but cannot be made sole basis for arriving at the decision. Merely because the two owners of the units were husband and wife and the profits earned by them came into same household, does not mean that clearances of all the units is required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants stands not accepted by the Commissioner by observing that as all the units are owned either by wife of Shri Pradeep Khanna or by Ms. Neera Khanna, issuance of separate notice to the other units was not required. We find no merits in the above arguments. Admittedly all the units were working separately and the Revenue is proposing the clubbing of clearances with the clearances of M/s. Thermotech. The minimum legal requirement is to put the other units on notice. Mere fact that the said other units were under the proprietorship of Ms. Neera Khanna or under the ownership of husband of Ms. Neera Khanna cannot absolve the Revenue from putting the other units to notice. It is well settled law that in case of clubbing of clearances of various units, the notices are required to be issued to all, inasmuch as the clearances of other units is sought to be clubbed with clearances of a particular unit. To club the clearances of other units with M/s. Thermotech without even putting the other units on notice and without even letting them know about the same is against the settled principle of law. 19. In view of our foregoing discussion, we hold that the findings arrived at by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of air conditioners is not called for. We accordingly set aside the same. 21. Similarly confiscation of the excisable goods, semi-finished goods and the raw material seized from the factory premises of the appellants M/s. Thermotech with an option to them to redeem the same on payment of redemption fine of Rs. 1 lakh, is not called for inasmuch as the goods were still in the factory premises and were admittedly either in the semi-finished stage or still raw material. Even where the goods were finally packed, i.e., room air conditioners, we have already accepted the appellants contention that the same were not manufactured by them and were either being traded or got manufactured from other workers. We accordingly set aside the confiscation of the same. 22. Further the imposition of penalty on Shri Pradeep Khanna under Rule 209A of Central Excise Rules is required to be set aside as we have already set aside the duty demand and imposition of penalty in respect of M/s. Thermotech. His appeal is accordingly allowed. Appeal No. 4903 of 2004 Vide Order-in-Original No. ADJ/1/3-2004, dated 14-1-2004 in appeal No. 4903 of 2004, Commissioner has held as under :- (i) confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o engaged in the manufacture of air conditioners. It was disclosed that the said manufacturing were got done through a contractor, Shri Devender Oberoi, proprietor of M/s. Nikhil Refrigeration. A copy of the contract entered into by M/s. Nikhil Refrigeration was also put on record. 25. On the above basis, show cause notice dated 26-8-1992 was issued proposing confiscation of the 36 air conditioners valued at Rs. 7,92,000/-, 4 fan motors valued at Rs. 1600/- and 4 deep freezers valued at Rs. 41,500/- on the ground that the same were not entered in the RG-1 register. 24 air conditioners recovered from the residential premises were also proposed to be confiscated along with confirmation of duty of Rs. 3,16,800/-. The notice also proposed confirmation of duty of Rs. 12,80,542.50 by denying the benefit of Notification No. 75/87 on the ground that on clubbing the clearances of all the three units under the proprietorship of Smt. Neera Khanna, the same exceeded the eligibility criteria of the said notification, the demand of Rs. 58,44,825/- was proposed to be confirmed for the period 1988-99 to 1989-90 on the allegation of clandestine removal of 606 air conditioners. The said notice cul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the same if not been paid by the appellants at the time of clearance, they are directed to enter the said air conditioners in RG-1 registers on the release and clear the same on payment of duty, if not already paid. 29. As regards, 4 fan motors and 4 deep freezers, the appellants have taken a stand that the basement of the appellants factory was temporarily taken by M/s. Thermoking on rent and the said goods were manufactured on behalf of M/s. Thermoking, by a contractor. It is a fact that at the time of visit by the officers, a contractor, Devender Oberoi was found engaged in fabrication of deep freezers and the statement recorded on the spot revealed that he was working for M/s. Thermoking. The Commissioner has observed that no permission to shift factory premises temporarily to the basement of the factory of M/s. Flevel International was taken by M/s. Thermoking. We are of the view that the same may be reason for imposition of penalty for non-obtaining permission but cannot lead to conclusion that the said deep freezers and fan motors were manufactured by the appellants. As such, we set aside the confiscation of the same. 30. As regards confiscation of the 24 air conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vender Oberoi, proprietor of Nikhil Refrigeration. The above evidence of the appellant stands rejected by the adjudicating authority on the ground that the address given in the agreement does not belong to Shri Devender Oberoi as reported by the enquiry conducted by the department. The appellant s contention is that they are not concerned with the correctness of the address given by Shri Devender Oberoi and the agreement executed between Thermoking and Nikhil Refrigeration is sufficient to reveal the fact that the air conditioners were got manufactured by Thermoking through Nikhil Refrigeration. 34. We find that the allegation in respect of 24 air conditioners is clandestine removal of the same by the appellants. Apart from the statement of Shri Pradeep Khanna, there is no other evidence reflected upon such activity. The said statement of Shri Pradeep Khanna stands retracted subsequently and alternative stand taken by them is supported by the agreement between Thermoking and Nikhil Refrigeration. His subsequent statement also stands corroborated by the fact that Shri Devender Oberoi was found in the factory on the date of visit of the officers. The Revenue s stand that Devender O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given to the other two units cannot act as a deterrent for examining the availability of exemption Notification to the present appellants. Accordingly, we note that the appellants have taken a stand that the clearances of the seized goods have also been taken into consideration while computing the clearances of Rs. 50 lakhs. Otherwise also, we find that some of the demands stands confirmed against the appellants in the findings of the clandestine manufacture stands dropped by us. It is not clear whether such clearances have been taken into consideration or not? Accordingly we direct the Commissioner to examine the said aspect and arrive at a total figure of clearances of Ms. Neera Khanna for the purposes of extending the benefit of Notification. Needless to say that the appellants would be given an opportunity to putforth their case. 39. We further note that the demand of Rs. 58,44,825/- stands confirmed against the appellant on the finding of clandestine manufacture of 606 ACs and clearance of the same without payment of duty during the period 1988-89 and 1989-90. The said finding are based upon the entries made in the ledger account maintained by the appellant. It was allege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants contention is that his statement has to be excluded. 41. The Commissioner has strongly relied upon the statement of Shri Bhargava. However, we find that apart from the said statement as also the statement of representative of Kirloskar Brothers that the compressors were being sold to Thermoking, there is no direct evidence of manufacture of such huge quantity of ACs in the appellant s factory. No doubt for trading in the identical type of goods permission under Rule 51A of Central Excise Rules is required. However, the fact of non-obtaining permission cannot lead to conclusion that the goods traded in the market were not compressors but the ACs which were manufactured by the appellants and cleared clandestinely. 42. It is also seen that the appellants had given a list of their buyers to whom the compressors have been sold along with value. The said value relate to the value of compressors and not that of ACs. The Adjudicating authority has not given any credence to such list provided by the appellants by simply observing that these bills were in the names of surnames of the persons whose very existence is, ex facie, doubtful. He has accordingly observed that he is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Third Member :- 25. I find that the Hon ble President has correctly relied on the judgment of Hon ble Supreme Court in the matter of Nagubai Ammal and Others v. B. Shama Rao, AIR 1956 SC 593 wherein it was held that- an admission is not conclusive as to the truth of the matters stated therein. It is only a piece of evidence, the weight to be attached to which matters depends on the circumstances under which it is made. I am unable to find these retracted oral testimonies as credible piece of evidence to sustain the charge against the Appellant Company. 26. It would be necessary to analyze whether the evidences, other than the retracted oral evidences, are credible for being used as corroborative evidence. The Hon ble Supreme Court in case of Sitaram Sao v. State of Jhar-khand - (2007) 12 SCC 630, pithily encapsulated the idea of corroborative evidence, in the following words : 34. The Word corroboration means not mere evidence tending to confirm other evidence. In DPP v. Hester - (1972) 3 All ER 10.16, Lord Morris said : The purpose of corroboration is not to give validity or credence to evidence which is deficient or suspect or incredible but only to confirm and su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06 ACs. As such, we find no reason to confirm the demand against the appellants on the said ground. In the absence of confirmation of demand, no penalty is liable to be imposed. 46. In view of the foregoing discussion, the appeals of M/s. Thermotech and Shri Pradeep Khanna are allowed. The appeal of M/s. Flevel International is partially allowed and partially remanded as indicated in the orders. (Pronounced in the open court on _________) Sd/- (Archana Wadhwa) Member (judicial) 47. [Per : Rakesh Kumar, Member (T)]. - I have gone through the order proposed by my learned sister. While I agree with the order in respect of appeal No. E/4885-4886/2004, I do not agree with her conclusions, in respect of the following points in the order in respect of appeal No. E/4903/2004 - (i) liability to confiscation of 24 room air conditioners seized from the residential premises of Shri Pradeep Khanna/Mrs. Neera Khanna and duty demand of Rs. 3,16,800/- in respect of the same from M/s. Flevel International. (ii) duty demand of Rs. 58,44,825/- in respect of alleged clandestine manufacture and clearance of 606 air conditioner during 1988-1989 and 1989-1990. 48. Coming first to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 24 of the Evidence Act, the statement would not be admissible as evidence. It is in view of this, that the Apex Court in a series of judgments - (a) Naresh J. Sukhawani v. Union of India reported in 1996 (83) E.L.T. 258 (S.C.) (b) Surjeet Singh Chhabra v. Union of India reported in 1997 (89) E.L.T. 646 (S.C.) (c) K.I. Pavunny v. Asstt. Collr. (HQ.), C. Ex. Collectorate, Cochin reported in 1997 (90) E.L.T. 241 (S.C.) (d) Asstt. Collr. of C. Ex., Rajamundry v. Duncan Agro Industries Ltd. reported in 2000 (120) E.L.T. 280 (S.C.), has held that statement recorded by a gazetted officer of Customs under Section 108 of Customs Act, 1962 (identical to the provisions of Section 14 of the Central Excise Act, 1944) is not hit by the provisions of Section 25 of the Evidence Act and the same is admissible as evidence, if it has been made voluntarily and is not vitiated on account of any threat, inducement etc. envisaged in Section 24 of the Evidence Act. For invoking the provision of Section 24, there must be evidence from which it appears that the factor mentioned in it exist, without which, a bald retraction of the statement has to be rejected as an after th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Thermoking that the compressors were being received by M/s. Thermoking under Chapter X procedure from M/s. Shree Ram Refrigeration and M/s. Kirloskar Brothers for manufacture of water coolers, but the same were being diverted to M/s. Flevel who manufactured air conditioners out of the same. 49.1 There also statements of the representatives of M/s. Shree Ram Refrigeration and M/s. Kirloskar confirming sale of compressor to M/s. Thermoking. From the records, it appears that a separate show cause notice dated 30-7-1992 has been issued to M/s. Thermoking for demand of duty on illicitly diverted compressors, as the compressor had been received at concessional rate of duty under Chapter X procedure for use in the manufacture of water coolers. According to M/s. Flevel, the entries in the ledger are regarding sale of compressors as such, not sale of Air conditioners. According to Department, however, the price of the goods sold indicates that the goods sold were Air Conditioners, not compressors and the compressors illicitly diverted by M/s. Thermoking were used by M/s. Flevel in manufacture of ACs. 49.2 In my view the statements of Shri Pradeep Bhangara, which are key evidence in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y view, the evidence on record in this case is sufficient to establish the preponderance of probability in support of the allegation of duty evasion of Rs. 58,44,825/- by M/s. Flevel by clandestine clearance of 606 air conditioner without payment of duty. 50. I, therefore, - (a) uphold the confiscation of 24 air-conditioners seized from the residential premises of Shri Pradeep Khanna/Mrs. Neera Khanna on 28-2-1992, the duty demand of Rs. 3,16,800/- in respect of the same and imposition of penalty on M/s. Flevel under Rule 173Q(1) for removal of these air- conditioners without payment of duty; and (b) uphold the duty demand of Rs. 58,44,825/- against M/s. Flevel in respect of clandestine clearance of 606 air-conditioners during 1988-1989 and 1989-1990 and also imposition of penalty on M/s. Flevel for this under Rule 173Q(1). On the remaining points of dispute in these appeals, I agree with the order proposed by my learned sister. Sd/- (Rakesh Kumar) Member (Technical) 51. Since in respect of appeal No. E/4903/2004 of M/s. Flevel, there is difference between Member (Technical) and Member (Judicial) on certain points, the Registry, in accordance with the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctured by M/s. Thermoking through M/s. Nikhil Refrigeration and were not manufactured by M/s. Flevel International. 55. The fact that the goods were seized from the residence of the Khannas is not disputed. It was also stated by Shri Pradeep Khanna on 28-2-1992 that the goods were manufactured at C-106/1, Naraina, New Delhi on 27-2-1992 and cleared without payment of duty. It is admitted that the premises at C-106/1 was the usual manufacturing premises of M/s. Flevel International. 56. On 8-3-1992 Mr. Khanna sent a letter under the letterhead of M/s. Thermoking informing that the 24 air conditioners were purchased from Nikhil Refrigeration. In this letter he stated that since the goods were not manufactured at his factory at C-106/1, Naraina Industrial Area the question of payment of Central Excise duty does not arise. 57. The defence that the basement of the premises at C-106/1, Naraina was taken on rent by M/s. Thermoking was taken by Shri Khanna in his statement dated 17-3-1992. The pleading during hearing before me was that M/s. Thermoking had taken the basement of C-106/1, Naraina on temporary possession because the regular manufacturing premises of M/s. Thermoking at A- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax evader. The facts of this case does not justify giving such benefit. 60. So I agree with the view taken by Hon ble Member (Technical) in the matter of 24 air conditioners seized from the residence of the Khannas. In the matter of 606 Air-Conditioners cleared during the period 1988-89 and 1989-90. 61. During the relevant time there was a concessional rate of duty for compressors used for manufacture of water coolers. A case made out by Revenue that 1022 compressors bought by M/s. Thermoking, under concessional rate of duty, subject to proper end-use for manufacture of water coolers, were diverted for manufacture of air-conditioners by M/s. Flevel International is pending in appeal by M/s. Thermoking. The present proceeding is in respect of 606 air-conditioners manufactured by M/s. Flevel International. The summary of the demand is as under : S. No. Type of realization in ledgers which are alleged to relate to clandestine removals For 1988-89 For 1989-90 1 Total number of compressors sold for which an amount of Rs. 7700 to 8800 was booked in the ledger 182 121 2 Total Number of Air Condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared in the guise of gas compressor. (3) Shri S.K. Duggal, r/o 33-B, Pt-II, Mayour Vihar, Delhi in his statement dated 22-5-1992 had stated that one compressor was bought by him from M/s. Flevel International on 22-4-1989 against party s bill No. 23 for Rs. 8,800/- which was paid by cheque No. 586075 dated 23-4-1989. M/s. Flevel International later on manufactured air-conditioners for Shri Duggal, S.K. and fitted the compressor sold to him in the said air-conditioner for which Rs. 6,300/- was charged from him. The said M/s. Flevel International did not issue any central excise gate pass for the air-conditioner manufactured and cleared for Mrs. S.K. Duggal. 63. Further the statements given by the following persons also are relied upon as evidence : (i) Statements of Shri Pradeep Bhargava who was an accountant looking after matters relating to accounts, excise, banking, sales tax and income tax matters of M/s. Flevel Industries; (ii) Statement of Shri Shiv Prasad Manager of M/s. Kirloskar Brothers, who were supplying compressors to the appellants. 64. The Counsel for appellant submits the following arguments : (i) the department is trying to charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r accounts, the price works out to Rs. 8,000/- to 10,000/-. This cannot be the price of Air-Conditioner as per the yardstick drawn of Air-Conditioners to be from Rs. 12,000/- to Rs. 18,000/-. (ix) The claim of the Appellants of having traded in Compressors has not been accepted by the Commissioner (Adj) and also by Hon ble Member (T) on one of the grounds that the statement of Shri Shiv Prasad recorded on 9-6-1992 (Manager of M/s. Kirloskar Brothers appearing at page 176 to page 181 of the paper book) states that the O.E. are not required to trade in compressors. It is submitted that at page 178 of the paper book, Shri Shiv Prasad stated as under :- However if any, O.E.M. is trading in Compressors, we do not have any control on them . The above portion of the statement of Shri Shiv Prasad has not been appreciated and even overlooked therefore, statement of Shri Shiv Prasad cannot become a ground in denying trading. In any case such trading is in respect of compressors which the Appellants themselves bought as per para-20 of Show Cause Notice. This accounts for 303 numbers. (x) As per para-41 of the order of the Commissioner the trading i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant in an embezzlement (sometime in January 1989) cannot be reason to discard his statement given in April 1992. Quite often such grudge results in disclosure of truths which are not pleasant to the person who alleges embezzlement. 69. The statement of Shri Bhargava has to be seen with reference to other corroborative evidences. When the statement of Shri Bhargava is seen in conjunction with the statement of Shri Shiv Prasad and the facts that the sales of compressors were to individuals and not to other manufacturers it is very obvious that the appellants were selling air-conditioners and showing such sale as sale of compressors. 70. If the statement of Shri Bhargava about diversion of compressors meant for manufacturing water coolers for manufacturing air-conditioners was not true it would be easy to demonstrate the actual sale of water-coolers at least in majority of those cases. Of course evidence in this regard is to be adduced by M/s. Thermoking, the firm of the husband, Shri Pradeep Khanna. But it is to be noted that since the affairs of both the firms were being managed by Shri Pradeep Khanna it was easy to take this defence, if only it was true, rather than t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case, when prosecution succeeded in establishing the afore narrated circumstances, the court has to presume the existence of certain facts. Presumption is a course recognised by the law for the court to rely on in conditions such as this. Presumption of fact is an inference as to the existence of one fact from the existence of some other facts, unless the truth of such inference is disproved. Presumption of fact is a rule in law of evidence that a fact otherwise doubtful may be inferred from certain other proved facts. When inferring the existence of a fact from other set of proved facts, the court exercises a process of reasoning and reach a logical conclusion as the most probable position. The above principle has gained legislative recognition in India when Section 114 is incorporated in the Evidence Act. It empowers the court to presume the existence of any fact which it thinks likely to have happened. In that process court shall have regard to the common course of natural events, human conduct etc. in relation to the facts of the case. 72. The standard of proof required for proving evasion of taxes is of a much lesser degree as held in the following cases : (i) Colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely foolproof. The function of the criminal courts should not be wasted in picking out the lapses in investigation and by expressing unsavoury criticism against investigating officers. If offenders are acquitted only on account of flaws or defects in investigation, the cause of criminal justice becomes the victim. Effort should be made by courts to see that criminal justice is salvaged despite such defects in investigation. Courts should bear in mind the time constraints of the police officers in the present system, the ill-equipped machinery they have to cope with, and the traditional apathy of respectable persons to come forward for giving evidence in criminal cases which are realities the police force have to confront with while conducting investigation in almost every case. Before an investigating officer is imputed with castigating remarks the courts should not overlook the fact that usually such an officer is not heard in respect of such remarks made against them. In our view the court need make such deprecatory remarks only when it is absolutely necessary in a particular case, and that too by keeping in mind the broad realities indicated above. 75. In the facts and circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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