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TMI Blog2015 (4) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... al premises 14 loose sheets written on both sides papers pertaining to the factory accounts were recovered and resumed by the officers for further investigations. The said 14 loose sheets were shown to Shri Parveen Kumar, Proprietor of the Appellant s firm and statement dated 4.10.2001 was recorded under Section 14 of the Act ibid. Wherein he admitted the recovery of the loose sheets from his residential premises and stated that the same contained details of the clearances effected by him in a clandestine manner without discharge of Central Excise duty and without issue of proper document. He also handed over none cheques of Rs. 1,00,000/- each totaling Rs. 9,00,000/- towards Central Excise Duty evaded. Statement of Shri Rajender Kumar, Authorized Signatory was also recorded on 8.10.2001 under Section 14 of the Act ibid. Wherein he admitted the contents of the statement dated 4.10.2001 of Shri Parveen Kumar, Proprietor of the Appellant s firm. The appellant informed the department that he had deposited Rs. 4 Lacs vide TR-6 Challans dated 13.10.2001 and 8.11.2001. Statement of Shri Parveen Kumar, Proprietor was again recorded on 1.8.2003 under Section 14 of the Act ibid. Wherein the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the loose sheets relate to small/big pouches. Small pouch of 1/- or 2/- means one pouch of having MRP 1/- or 2/- whereas a big pouch of 1/- or 2/- means the outer bag wherein 40 pouches of Rs. 1/- or 20 pouches of Rs. 2/- are packed. The various words like Small pouches Big pouches and Lime tubes are clearly mentioned on the loose slips. The loose slip shows the opening balance, the quantity received/ used in particular month and the figure carried forward. This quantity of receipt of pouches or lime tubes is duly available in accounts books. The quantity of pouches used relates to the quantity manufactured, which is duly entered in RG-1 account. However the Central Excise officers made Shri Parveen Kumar to write that the loose sheet contain the details of clearances effected by him in clandestine manner. He denied as the same was against evidence on records. ii) That, the whole case of the department is based on those 14 loose sheets which the department has assumed to contain the details of goods clandestinely removed by him. He denied the allegations categorically. He submitted that the details of empty pouches purchased and used during the relevant period and lime tub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture. He enclosed month wise comparative figures for ready reference. v) That, the statement of Shri Parveen Kumar wherein he is said to has stated that such loose sheets show the figures of removal of finished goods is not correct statement which is contrary to the documentary evidence on record which shows that statement was not recorded voluntarily. He submitted that the sheets contained the details of pouches used during a particular which correspond with each and every entry available in the statutory records which has been ignored and the statement which was contrary to facts on records has been relied upon. He submitted that the uncorroborated statement under no circumstances can be treated as voluntary due to the fact that very contents of the statement are contrary to the facts on record and duly verified by the department. vi) That, it is well settled that where two pieces of evidence are there, one oral and the other documentary, the documentary evidence has to be preferred. He submitted that in their case the oral evidence is uncorroborated by any material evidence whereas the documentary evidence submitted by them is clearly corroborative with the statutory records. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. During the course of investigation, another statement of Shri Parveen Kumar was recorded on 1.08.2003 under Section 14 of the Act ibid. Wherein he associated with the Central Excise Officers in preparing the detailed month wise statement out of the 14 loose sheets and explained the entries in the loose sheets and stated that those loose sheets contained the details of purchase and utilization of pouches of different sizes and lime tubes and tally with its usage in RG-1 and there was very minor difference which is due to loss/wastage occurred during the manufacturing process. The appellant in the reply to the show cause notice relied on the statement dated 1.08.2003 and also submitted detailed comparative charts, copies of the RT-12 Returns and month wise extracts of the RG-1 register along with purchase bills of each and every entry receipt of pouches/lime tubes reflected in the 14 loose sheets and claimed that those accounts hand written in the loose sheets are mere duplicate of the statutory records and all the purchase of small, big pouches and lime tubes have been made against proper invoices and exactly the same quantity of finished goods (except negligible difference in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the show cause notice that any attempt was made to identify the buyers of the excisable goods allegedly been removed clandestinely by the appellant continuously for a huge period of four years. On the contrary the appellant has explained the entries in 14 loose sheets vide his statement recorded on 1.08.2003 under Section 14 of the Act ibid and has also been able to establish that those entries pertain to the receipt and utilization of inputs duly entered in the statutory records and production on that account entered in the RG-1 and declared in the RT-12 Returns submitted to department periodically but the same has been ignored by the adjudicating authority considering them as an after thought. The uncorroborated and bald statement of the appellant in the instant case is an incomplete and inconclusive piece of evidence and cannot be made sole basis for holding the appellant guilty of the manufacture and removal of the finished goods without payment of duty during the relevant period in the absence of any tangible evidence regarding the clandestine removal of finished goods. I further find that it is well settled that the statement which travel beyond the documentary evidence, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ches, big pouches and lime tubes. The Commissioner (Appeals) has examined the said loose sheets and has come to the conclusion that the same relate to the quantity of the packing materials, which is one of the raw materials. The quantities mentioned in the said loose sheets stand verified by him and compared with the recorded entries made in the statutory records. A detailed chart stands prepared which only show the difference of 500 pouches per month, which stands attributed to loss/wastage during the course of manufacture. The revenue in their grounds of appeal have not rebutted the above finding of fact by the appellant authority. There is no ground challenging the findings that the entries made in the said loose sheets, duly tallied with the statutory records. The revenue s only grievance is that Shri Parveen Kumar as also Shri Rajender Kumar, in their initiating statement, given at the time of search have admitted clandestine activities. However, as rightly observed by the Commissioner (Appeals), when there are documentary evidences, which fully corroborated the assessee stand, no adverse inference can be arrived at on the basis of the oral evidences in the shape of statement. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f clearances effected by him in clandestine manner without discharge of central excise duty and without issue of proper documents. 9 Cheques of Rs. 1 lakh each totalling Rs. 9 lakh towards central excise duty evaded, were handed over. Statement of Shri Rajender Kumar, authorised signatory was also recorded on 8.10.01 wherein he admitted contents of the statement dated 4.10.01 of the proprietor Shri praveeen Kumar. He also informed that they have further deposited Rs. 4 lakh by TR-6 challan dated 13.10.01 and 8.11.01. During further statement dated 1.8.2003, appellant raised a question mark on the voluntary statement before adjudicating authority. Commissioner (Appeals) held that findings of the adjudicating authority was based on probability and dropped proceedings. Leaned Member (J) after going through the facts of the case as well as findings of the Commissioner (Appeals) came to the same conclusion that the statements of Shri Praveeen Kumar and Shri Rajender Kumar, authorised signatory could not be made basis of confirmation of duty evaded because these statements were not supplemented with any documentary evidence. I do not agree with the findings recorded by the learned Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and consequently confirmed duty amounting to Rs. 30,74,033/- under section 11A(1) alongwith interest on said duty and equivalent amount of penalty under section 11AC ibid and Rule 173Q of erstwhile Central Excise Rules,1944 and Rule 25 of erstwhile Central Excise (No.2) Rules, 2001. 15. From the SCN issued to the respondent, following evidences came before the adjudicating authority in addition to the points which have been stated in the preceding paragraphs. (a) The officers visited the factory premises of M/s. Praveen Kumar & Co. situated at A-163, Majlis Park, Azadpur, Delhi engaged in the manufacture of Praveen Chhap unmanufactured branded chewing tobacco. The officers conducted physical stocktaking of the finished goods as well as raw materials, lying in the factory premises in the presence of Shri Praveen Kumar, proprietor. As a result of physical stocktaking, 13 bags of Praveen Chhap unmanufactured tobacco weighing 7 kgs containing 500 pouches each of 14 gms. Tobacco valued at Rs. 5,528/- and 20 bags of Praveen Chhap unmanufactured tobacco containing 1500 pouches each 8 gms. Tobacco valued at Rs. 14,000/- were found in excess of the recorded balance in the daily stock reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss each of Rs.One lac were handed over by them for covering removal of Praveen Chhap Tobacco without payment of duty. He confirmed the recovery of 14 hand written pages showing details of production and clearance of Praveen Chhap Tobacco without payment of duty. (d) It is further very relevant to note that the respondent deposited further Rs. 4 lakh which was in addition to the amount already deposited amoauant of Rs. 9,00,000/- This amount was promised to be deposited by Shri Praveen Kumar in his statement dated 4.10.2001. (e) Department has been asking for certain documents relating to income-tax returns of Shri Praveen Kumar, M/s.Rajender General Store and M/s.Mittal Trading Co. for the last five years or since inception but the respondent failed to supply the same. Later on, they only supplied the balance sheet on 14.1.2012. (f) It is also evident from record, that the details of receipt and use/utilization of small and big pouches of Praveen Chhap Tobacco after being filled with unmanufactured tobacco cleared without accounting the same in the daily stock account register and without payment of central excise duty were recorded in the private records. 16. Adjudicating auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atory were made. Further these statements were duly supported with recovery of documents clearly indicating clandestine manufacture and removal without payment of duty. This is fact on record that retraction has been made after two years when deposit of duty on evaded goods have been paid voluntarily without any duress. No protest was lodged. Deposit of further Rs. 4 lakh was made after gap of six months. I am convinced that the conduct of proprietor and his authorised signatory clearly points out that they were not maintaining any record in proper way leading to unaccounted production of Praveen Chhap Tobacco found in the factory. It was also on record that loose sheets quoting the details of pouches which were filled with tobacco later cleared and admitted by both proprietor and authorised signatory clearly indicated that there was non accountal in the statutory records and later Praveen Chhap Tobacco have been cleared without payment of duty. It is very relevant to note that that once these documents were confronted to them, they readily agreed with production and clearance of Praveen Chhap Tobacco and their non accountal and clearance without payment of duty. They immediately g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts will be considered made of their own volition. These findings are further supplemented with the facts that amount of Rs. 9,00,000/- (Rupees nine lakhs) and later on Rs. 4,00,000/- (Rupees Four lakhs) were deposited on their own volition without any duress and pressure. 22. Keeping in view the facts and circumstances relating to all the statements as well as deposit of duty through cheques as well as through cash and clear admittance of clandestine manufacture and clearance by the proprietor and authorised signatory that Pouches filled with Tobacco were cleared details of which were mentioned in seized papers, it is evident that Praveen Kumar & Company has indulged in the clandestine manufacture and removal. Duty has rightly been demanded by the adjudicating authority vide his Order-In-Original. Commissioner (Appeals) has not been able to clearly bring out any satisfactory evidence to demolish the voluntary statement confessing the evasion. 23. Voluntary confessional statement which is retracted after two years without any basis, has no legs to stand. No new facts have come on record to justify retraction short levy was paid consequent upon confession not once but twice. Furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. Actually facts were in their personal knowledge and there was no duress to conclude that confessional statements were not fair. Further there are indication of manipulation of records as after proper confirmation of evasion and alter payment of duty in two instalments, attempt has been made to manipulate the records with clear intention to defraud government revenue. 25. In view above, I respectfully disagree with findings of learned Member(J). I set-aside the findings recorded by Commissioner (Appeals) and upheld the findings recorded by adjudicating authority. (Manmohan Singh) Member (Technical) Difference of Opinion Whether as per findings of Member (Judicial) that mere based on confessional statement, no duty could be demanded as other evidences relating to manufacture, procurement of raw materials and transportation have not been produced by Revenue and such retraction of statement will have effect. Or Whether as per findings of Member (Technical) that based on confessional statement containing facts in their exclusive knowledge and recovery of other evidence and subsequent deposit of short levy, demand was liable to be confirmed alongwith the interest and pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded on 8.10.2001 under Section 14 of the Act ibid. wherein he admitted the contents of the statement dated 4.10.2001 of Shri Praveen Kumar, Proprietor of the Appellant s firm. The appellant informed the department that he had deposited Rs. 4 lakhs vide TR-6 Challans dated 13.10.2001 and 8.11.2001. Statement of Shri Praveen Kumar, Proprietor was again recorded on 1.8.2003 under Section 14 of the Act ibid. wherein he furnished month wise details of production and details covered under the 14 loose sheets recovered from his residence on 4.10.2001 28. During the hearing before me it was conceded by the ld. Advocate for the respondents that the proprietor Shri Praveen Kumar, in his statement recorded on 4.10.2001 admitted that the said 14 loose sheets were recovered from his residential premises, and that the same contained details of the clearances effected by him in a clandestine manner without discharge of Central Excise duty. In his statement Shri Rajender Kumar, authorised signatory, also admitted the contents of the statement of Shri Praveen Kumar. However, it was stated that in a subsequent statement dated 1.8.2003, Shri Praveen Kumar explained that the entries in the loose she ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003 they explained all the entries of the loose sheets vis-a-vis RG-I register which showed only minor month wise difference of 500 whereby claiming that the loose sheets actually contained details of legitimate clearances only. I find that the proprietor was repeatedly summoned on 7.1.2003, 26.3.2003 and 1.8.2003 but he appeared only on 1.8.2003 when he so claimed. In this regard, I have seen the chart in para 5 of the order-in-appeal which is re-produced below : MONTH/YEAR Quantity of small Rs. 1/- Pouches Oct, 1998 255500 255000 500 25100 25000 100 Quantity of small Rs. 2/- Pouches Nov.,1998 254500 254000 500 26500 26000 500 Quantity as per loose papers Dec.,1998 255500 255000 500 26650 26500 150 Quantity as per RG-I Jan.,1999 259000 258500 500 26600 26500 100 Difference Quantity as per loose papers Feb.1999 254500 254000 500 29100 2900 100 Quantity as per RG-I Mar.,1999 265000 264500 500 32700 32500 200 Difference Even a cursory glance at the above chart reveals that for every month mentioned therein, the difference between the quantities shown in the loose sheets and the RG-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed signatory. Thus here is a case of oral evidence (confession) of proprietor as well as the authorised signatory recorded on two different dates and supported by the documentary evidence in the form of 14 loose sheets recovered from the residence of the proprietor. The details contained in these loose sheets were clearly admitted by the proprietor and the authorised signatory to be the details of clandestine clearances. Thus, it is not a case of mere oral evidence unsupported by documents. A much later claim of the proprietor that those 14 loose sheets essentially contained the details of the RG-I register has been shown to be lacking any credibility; more so because there was no RG-I register produced at the time of search nor was it recovered during search and also because if these loose sheets actually contained details of legal clearances, they should have been found in the factory where such details are legally required to be kept 24x7 and produced to Central Excise officers on demand. 32. As far as the reference to the Income Tax assessment is concerned, it is to state that the Income Tax department had not investigated the case at their end and the CESTAT deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son to prove that his statement was obtained by threat inducement or promise. The Hon ble Supreme Court further observed that there is no prohibition under the Evidence Act to rely upon the retracted confession to prove the prosecution case or make the same basis for conviction of the accused. In the case of Collector of Customs Vs. Mahindra Chandra Dey, Calcutta High Court held that principles relating to inadmissibility of confessions under Cr P.C. 1973 are not applicable to confessions made under Section 108 of the Customs Act. Incidental reference can also be made to the case of CCE, Chandigarh Vs. Nabha Steels Ltd. 2004 (169) ELT 345 (Tri.-Del.) where CESTAT held as under : 2. I have heard both the sides. The bare perusal of record shows that the factory premises of the the the Central Excise officers on?respondents was visited by 25-7-2000. On verification of the stock of the raw material and finished goods, shortage of 8.835 MTs of non-alloy steel ingots was detected. Similarly, some shortage of runners and risers was also detected at the spot. These shortages were admitted by Shri Ajay Goyal, Director of the respondents and the entire duty involved on both the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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