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TMI Blog2017 (11) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... e part of the present proceedings are in the nature of unaccounted manufacture and clandestine clearances to evade payment of Central Excise duty and these are definitely in the nature of white collar crimes like smuggling, evasion of taxes/duties of State etc. - the observations of the Hon’ble Supreme Court in the case of Collector of Customs, Madras and Others Vs. D. Bhoormull [1974 (4) TMI 33 - SUPREME COURT OF INDIA] are rightly applicable to the present facts. Therefore, the appellants cannot be allowed to argue that for all the transactions, there is requirement of making 100% proof available - Revenue has made its case of unaccounted manufacture and clandestine removal to sufficient degree of certainty as discussed above as well as in the impugned order. It is not always required that Revenue must establish unaccounted production and clandestine clearances without payment of Central Excise duty on the part of the appellant with mathematical precision. If there are enough evidences on record as well as the statements of the concerned persons to indicate and infer the existence of facts of unaccounted production and clandestine clearance on the yardstick of preponderance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck and kept in the corner of the factory. (iv) The Central Excise officers recorded the statements of the following persons: (a) Shri P. Narayanan Kutty, Excise clerk in M/s. Bharath Plywood Timber Proucts (P) Ltd. (b) Shri Satish Chandra Haridas Dattani S/o Shri Haridas Gordhandas Dattani, Chairman of the appellant company (c) Shri C.P. Sadasivan, Sales Organizer (till 1984) (d) G.A. Achuthan, Supervisor (e) Shri N.P. Balakrishnan, Administrative Officer (f) Smt Hirabai Haridas, Director (g) Shri Arunkumar Lathani, Managing Director (h) APM Mammootty, Partner of M/s. Victory Plywoods, Madras (v) Based on the scrutiny of the documents seized and the statements recorded, the Department issued the show-cause notice (SCN) dated 6.2.1987 to the appellants and others inter alia stating that (a) the appellant, M/s. Bharath Plywood Timber Products (P) Ltd. contravened the provisions of Rules 173C, 173F 173G (I) read with Rule 53 and Rule 226 of Central Excise Rules 1944 inasmuch as the appellant company manufactured wood articles of wood falling under Chapter 44 of Central Excise Tariff Act, 1985 (previously under Item No. 16B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.04.1990, recording the appellant company s plea that they had already deposited ₹ 65,000/-. (x) Further on the misc. application filed by the appellant company, the Tribunal vide its Order No. SB/M/69/1990 dated 30.04.1990 inter alia noted that company had deposited ₹ 2.5 lakhs and granted extension for complying the order of pre-deposit of ₹ 6.5 lakhs till 31.07.1990. (xi) Further the Tribunal vide its Order No. SB/115/1990 dated 31.07.1990 dismissed these appeals No. 847, 848, 849 1345 of the year 1989) inter alia stating that- 3. We do not find any justification for grant of further extension of time. Accordingly, the petitions are dismissed. We also note that we have granted extension of time for making the pre-deposit a number of times. In the circumstances, the appeals are also dismissed in terms of Section 35F of the Central Excise and Salt Act, 1944. The Tribunal in the said order also mentioned that it is open to the appellant company to make the pre-deposit within reasonable time and take out an application for revival of the appeals. (xii) The appellants went before the Hon ble High Court of Kerala through C.M.P No. 144 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 10. In the said circumstances, this writ petition is disposed of as under: (1) Petitioners as well as respondents 3 to 5 shall place all records relating to the appeal referred to in Exts. P1 and P2 before the 1st respondent within a period of one month from the date of receipt of copy of this judgment with notice to either parties. (2) the 1st respondent shall re-construct the case records relating to the aforesaid appeal and shall consider and dispose of the same within a further period of 6 months. (3) Until disposal of the appeal, recovery of amounts pursuant to Ext. P7 shall be kept in abeyance. (xviii) As per the Hon ble High Court s above directions Assistant Registrar CESTAT, Delhi informed Dy Registrar, CESTAT, Bangalore vide letter dated 19.05.2015 that the appeal files had been reconstructed, and as jurisdiction falls with CESTAT, Bangalore, they are being forwarded herewith to CESTAT, Bangalore, for listing at the earliest as the matter is time bound. (xix) Thereafter these appeals appear to have been listed on 22.06.2015, 28.09.2015, 11.02.2016; however not much progress was made for deciding these appeals. (xx) Again the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants no. 2 3 have since died, therefore the proceedings against them will abate. (ii) There is no proof of actual transportation of the unaccounted manufactured and clandestinely removed goods. (iii) The Department has based the case against the appellant on the Stock Register, which is not a Production Register. (iv) The Department does not have evidences in support of raw-materials procured in excess of entries in statutory records, sale of unaccounted finished goods, receipt of sale proceeds, use of excess electricity for production of such goods. (v) In support the following decisions are cited: a) Arya Fibres Pvt. Ltd. Vs. CCE, Ahmedabad-II 2014 (311) E.L.T. 529 (Tri.-Ahmd.) b) Flevel International Vs. CCE, Delhi High Court decision in CEAC 6/2013 dated 17.09.2015 5. The learned DR for the Revenue vehemently reiterates the impugned order and inter alia submits as under: (i) The appellant-company keeps statutory account only of 50% of their production and other 50%, they are not accounting and removing the same clandestinely. (ii) The appellant-company has invented dead stock term as shown in their stock/production register, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrary. But in appreciating its scope and the nature of the onus cast by it, we must pay due regard to other kindred principles, no less fundamental, or universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree; for, in all human affairs absolute certainty is a myth, and as Prof. Brett felicitously puts it- all exactness is a fake . El Dorado of absolute Proof being unattainable, the law, accepts for it, probability as a working substitute in this work-a-day world. The law does not require the prosecution to prove the impossible. All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. Thus legal proof is not necessarily perfect proof often it is nothing more than a prudent man s estimate as to the probabilities of the case. 31 32. Smuggling is clandes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aws to support their submissions and arguments. However these case-laws are not in respect of the goods manufactured by the appellant i.e. wood and wood articles falling under Chapter 44 of Central Excise Tariff Act. These case-laws having different facts and circumstances do not give required support to the defense of the appellants. It may again be noted that it is not always required that Revenue must establish unaccounted production and clandestine clearances without payment of Central Excise duty on the part of the appellant with mathematical precision. If there are enough evidences on record as well as the statements of the concerned persons to indicate and infer the existence of facts of unaccounted production and clandestine clearance on the yardstick of preponderance of probability of happening such fact and which comes to the realm of proved fact beyond reasonable doubt there is no need to look for a fact happening with mathematical precision. In this regard, CESTAT, Mumabi s majority decision in case of Bhagwathi Steelcast Ltd. Vs. Commissioner of Central Excise [2013 (293) E.L.T. 417 (Tri.-Mum.) is referred . The majority decision in the said decision supports our obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andard in either case. In criminal cases the charge must be proved beyond reasonable doubt, but there may be degrees of proof within that standard. So also in civil cases there may be degrees of probability. Agreeing with this statement of law, Hodson, LJ said Just as in civil cases the balance of probability may be more readily fitted in one case than in another, so in criminal cases proof beyond reasonable doubt may more readily be attained in some cases than in others. (Hornal V. Neuberger P. Ltd, 1956 3 All ER 970, 977) . 75.6 .. 75.7 The concepts of reasonable doubt and preponderance of probability have been lucidly explained by the Hon ble Apex Court in the case of State of Rajasthan v. Mohan Lal [2009 (237) E.L.T. 435 (S.C.)] as follows :- 36. Doubts would be called reasonable if they are free from a zest for abstract speculation. Law cannot afford any favourite other than truth. To constitute reasonable doubt, it must be free from overemotional response. Doubts must be actual and substantial doubts as to the guilt of the accused persons arising from the evidence, or from the lack of it, as opposed to mere vague apprehensions. A reasonable doubt is not an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indings of the Commissioner in the impugned order, who in this regard inter alia observes as under: 34.5. It is apparent that the correct production was not entered in the RGI register. The company had suppressed the correct production and as the provisions of proviso to Section 11A(1) of the Central Excises Sale Act, 1944 are applicable. 35.3 It was argued that all the clearance were done in broad day light through only one factory point at the factory gate. This argument has no substance as nobody will clear goods if it is unaccounted by bringing it to the notice of every one. The clearance of unaccounted goods is not supposed to be made through a tunnel. Certainly the goods have to leave through the factory gate only. 36. Even though it is a fact that Departmental officers had several times conducted casual visits to the Unit, it does not absolve the Unit from indulging in clandestine activity. The factory is working under Self Removal Procedure and they are not required to get any prior permission from the Department for clearance. Moreover, no Departmental Officer is posted to the Unit for 24 hours. Here I may also point out that the fact of clearance of the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they always delayed payments for the raw materials purchased from them. Even the fundamental rights of the employees were denied by the company by delaying their monthly salaries, denying gratuity etc. Their argument that if they had really evaded the amount as alleged in the show-cause notice, they would rather had cleared their liabilities as narrated is neither here nor there as every reasonable man knows that the money saved by evading duty would become black money which could not be used for clearing the lawful dues by the company. 40.1. Shri Narayankutty was in-charge of clearance of goods from 1976 and also was incharge of maintaining statutory Central Excise records. Two statements of Sri Narayankutty was recorded in a gap of about 6 days. Therefore, it cannot be said that Narayankutty was forced to give statements. All the statements were written in their own handwriting and the facts given were very specific which nobody-else could have stated. I, therefore, do not accept the contention that the statements were taken under coersion. On the other hand this statement do corroborate the fact of unaccounted clearance as revealed from the Production Register as discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en therein. 7. However considering overall facts on record including the financial difficulties faced by the appellant-company and also the circumstances concerning the appellant company and other appellants, we deem it fit to reduce the penalties imposed on the appellant, M/s. Bharath Plywoods Timber Products (P) Ltd. from ₹ 10,00,000/- (Rupees Ten Lakhs only) to ₹ 25,000/- (Rupees Twenty Five Thousand only) and the penalty imposed on Shri A.P.M. Mammootty from ₹ 2,000/- (Rupees Two Thousand only) to ₹ 1,000/- (Rupees One Thousand only). 7.1. The impugned order also imposes Redemption Fines (RFs) of ₹ 6,000/- (Rupees Six Thousand only) and ₹ 25,000/- (Rupees Twenty Five Thousand only) in lieu of confiscation, which again considering overall facts including the financial difficulties faced by the appellant-company and also the circumstances on record, are reduced from ₹ 6,000/- (Rupees Six Thousand only) to ₹ 1,000/- (Rupees One Thousand only) and from ₹ 25,000/- (Rupees Twenty Five Thousand only) to ₹ 4,000/- (Rupees Four Thousand only). 8. In the case of the appellants namely Shri Haridas Gordhandas, Chairman ..... X X X X Extracts X X X X X X X X Extracts X X X X
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