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TMI Blog2017 (4) TMI 1162X X X X Extracts X X X X X X X X Extracts X X X X ..... signatory and his brother Shri Pawan Kumar Garg, who is the proprietor of Rudraksha Marketing (hereinafter also known as "RM") were recorded. Goods were seized. 3. It may mention that the main appellant M/s Prabhat Zarda Factory Co. (hereinafter also known as PZFC) was having licence for manufacturing the excisable goods perhaps since 1950 in the name of late Shri Lalit Kumar Arya. The goods manufactured by the main notice, M/s Prabhat Zarda Factory are chewing tobacco falling under Chapter Heading No. 24 of the Schedule to Central Excise Tariff Act, 1985 in the brand name of Ratna Chhap Zafrani Patti, Prabhat Brand Zafrani Patti and Rajratna Sepecial Quiwam etc. It is the contention of the department that with the help of M/s R.M., the appellant has sold clandestinely excisable goods without making any payment. So, the demand of duty was raised as well as penalties were levied on the legal firm and individuals on the basis of statements. Being aggrieved, the appellants have filed the present appeals. 4. With this background, we have heard Shri A.K. Trivedi and Shri Kumar Vikram and Shri H.C. Saini, ld. Counsels for the parties. 5. Shri A.K. Trivedi, Senior Counsel submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire case is based on the statements recorded at the time of search. Ld. Counsel also relied on the following judgements: (i) Rutvi Steel & Alloys Vs. CCE - 2009 (243) ELT 154 (Tri.-Ahmd.) (ii) CCE Vs. Rajaguri Spining Mills (P) Ltd. - 2009 (243) ELT 280 (Tri.-Chennai) (iii) CCE Vs. Saakeen Alloys Pvt. Ltd. - 2014 (308) ELT 655 (Guj.) (iv) Ambica Organics Vs. CCE - 2016 (334) ELT 97 (Tri.- Ahmd.). 7. Shri Kumar Vikram, another ld. Counsel represents M/s RM and Suresh Kumar Garg, authorised signatory submits that as per the ratio laid down by the Hon'ble Supreme Court in the case of CCE Vs. Woodmen Industries - 2004 (170) ELT A307 (SC), penalty can be imposed only on a natural person and not on a firm; so he makes a request that penalty levied on the firm M/s RM of Rs. 25 lakhs may be cancelled. Regarding penalty on Shri Suresh Kumar Garg, authorised signatory, he submits that there is no specific allegation raised in the show cause notice. For the purpose, he read relevant paras 22 and 23 of the Show Cause Notice. Finally, he requests that penalty levied on Shri Suresh Kumar Garg may also be cancelled. 8. On the other hand, ld. DR Shri H.C. Saini for the department r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 14 of Central Excise Act, 1944. I note that Shri Arya tendered his statements on three different dates viz. 29.2.2008, 1.3.2008 and 7.3.2008 and Shri Mehrotra tendered his statement on 29.2.2008 and 7.3.2008 before the proper Central Excise officers. The material details and nature thereof such as pricing policy and discount structure, details of partners, relation with buyers, arrangement of transportation, purchase of raw materials on bills as well as without bills, clearance of goods on bills as well as without bills etc. given by Shri P.K. Arya and Sh. Mehrotra are almost identical to the revelation made by Shri Suresh Kumar Garg under his voluntary statements recorded on 28.2.2008, 29.2.2008 and 3.3.2008. Such minute details do not seem to have been extracted from an unwilling/non-voluntary person. Both the persons had ample opportunity between their different statements, to retract the same but they did not opt for immediate retraction. The allegation of the noticees, in this regard, that statements have been recorded under threat, duress, confinement and are non-voluntary, have not been substantiated by any evidence except that they retracted their respective statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of goods on bills as well as without bills, removal of goods on payment of Central Excise duty as well as without payment of Central Excise duty. Further the statements of Shri Garg, the buyer of the excisable goods (cleared without payment of duty), who also is one of the beneficiaries of the scheme hatched and executed by them for evasion of Central Excise duty, also corroborated the charge of clandestine removal of goods, against M/s PZFC by providing the print outs of the ledger account of Noticee No. 1 containing the details of goods cleared under cover of bills as well as without cover of any bills." 11.1 It is on record that the incriminating documents were recovered under the proper panchnama signed by the independent witnesses and the entries in the documents were explained by the buyer of the excisable goods in his voluntary admittal/statements recorded on different dates. In this regard, the impugned order on pages 36-37 has observed as under: "The ld. Counsel repeatedly contended in his written as well as oral submissions during the personal hearing that no case is made out against a person on the basis of the statement of accounts procured and produced by the thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise. On this issue, the impugned order on pages 37-38 observes as under: "Coming to the retraction of the statements recorded under Section 14 of Central Excise Act, 1944 by Shri P.K. Arya and Shri K.N. Mehrotra vide their letter dated 24.3.2008, I note that the Counsel have heavily relied upon it. Further the counsel also challenged the admissibility and evidentiary value of these statements under Section 25 & 26 of the Indian Evidence Act, 1872. However, I find that the confession once made by the person before the proper Central Excise officer has to be viewed with enormous evidentiary value. In Assistant Collector of Customs, Madras-I Vs. Govindswamy Raghupathy - 1998 (98) ELT 50 (Mad.), the Hon'ble High Court has held that it is only confession made before the police or in custody in the presence of police which cannot be relied upon within the meaning of Section 25 & 26 of the Evidence Act, 1872, excepting for the specific purposes of Section 27 & 32 of the Evidence Act. Barring the above circumstances no other confession made before any authority or prosecuting, official could be viewed with suspicion and they have enormous evidentiary value and conviction could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, mere retraction of confessions is not sufficient to make the statement irrelevant. In Vinod Solanki Vs. UOI - 2009 (233) ELT 157 (SC), it was held that if confession is retracted, it must be corroborated by other independent and cogent evidences. In 'Surjeet Singh Chhabra Vs. UOI - 1997 (89) 157 (SC) it was held that a confession made before Custom officer was held binding even if retracted later." 11.3 In respect of the record resumed during search of the premises of the appellant M/s R.M., it is evident that the goods had been cleared by the assessee M/s PZFC without bills and without payment of duty, and against the said goods, payment was received in cash. The entries of the record resumed was corroborated voluntarily by the partner Shri Purushottam Kumar Arya as well Manager, Shri K.N. Mehrotra of M/s PZFC. When such clandestine removal without payment of duty has been explained in three consecutive statements also by Shri Suresh Kumar Garg, the defence of retraction later by Shri Purushottam Kumar Arya and Shri K.N. Mehrotra cannot succeed. In this regard, the impugned order on page 39 has observed as under : "I find that the records resumed by the department from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussion, we fully agree with the finding of the impugned order where it was observed that present appellants have no defence against the case made out against them. The case laws mentioned by the appellants are not applicable in the present facts. The same are distinguishable on facts and circumstances. 12.1 The Tribunal in the case of Tanna Electronics (supra) has observed that the case where the voluntary deposit of duty has been made by the assessee, the said fact also reflects upon the fact of acceptance of clandestine activities on the part of the assessee. The Tribunal in the said case observes as under: "8. We, however, do not find any merit in the above contention of the ld. Advocate. It is not only the statement of Shri M.M. Tanna which is the only evidence available on record. The modus operandi adopted by the said appellants and as disclosed in the said statement stood corroborated by the recovery of duplicate chits from the appellant's factory as also from the distributor's premises i.e. M/s. Moby Enterprises. Further, the statement of their distributor Shri G.S. Advani also corroborates the department's stand of clandestine clearances of goods by M/s. Tanna Elec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, Bose, J. speaking for Bench of three-Judges laid down the law that the Court requires to marshall the evidence against the accused excluding the confession altogether from consideration. If the evidence de hors the confession proves the guilt of the appellant, the confession of the co-accused could be used to corroborate the prosecution case to lend assurance to the Court to convict the appellant. The Court considered the evidence led by the prosecution, de hors the confession of co-accused and held that the evidence was not sufficient to bring home the guilt of appellant Kashmira Singh of the charge of murder. The appellant was acquitted of an offence under Section 302 IPC but was convicted for the offence under Section 201 IPC for destroying the evidence of murder and sentenced him to seven years rigorous imprisonment. This decision was considered by a four-Judge Bench in Balbir Singh v. State of Punjab - AIR 1957 SC 216 wherein it was held that if there is independent evidence, besides the confession, the rule that the confession could be used only to corroborate the other evidences loses its efficacy. Therefore, it was held that if the retracted confession is believed to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the General Clauses Act, 897, or Section 2(3) of the Act of 1868 would be applicable to the said Acts in both of which `person' has been defined as including any company or association or body of individuals whether incorporated or not. It is of course contended that this definition does not apply to a firm which is not a natural person and has no legal existence, as such clauses (3), (8) and (37) of Section 167 of the Sea Customs Act are inapplicable to the appellant firm. In our view, the explanation to Section 23C clearly negatives this contention. In that a company for the purposes in that section is defined to mean any body corporate and includes a firm or other association of individuals and a Director in relation to a firm means a partner in the firm. The High Court was clearly right in holding that once it is found that there has been a contravention of any of the provisions of the Foreign Exchange Regulation Act read with Sea Customs Act by a firm, the partners of it who are in-charge of its business or are responsible for the conduct of the same, cannot escape liability, unless it is proved by them that the contravention took place without their knowledge or they exerci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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