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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 ..... Products and of Rs. 1,00,000/- (Rupees One lakh) each on Shri Haridas Gordhandas and Shri Arun Kumar Dattani and of Rs. 2000/- (Rupees Two Thousand) on Shri APM Mammootty. 2. The brief facts are that: (i) Based on the intelligence, the Central Excise officers searched the premises of the appellant namely M/s. Bharath Plywood & Timber Products (P) Ltd. and other related premises on 22.08.86 and seized certain incriminating documents. (ii) The search conducted at other related premises also resulted in seizure of documents. (iii) The search at the factory of the appellant, M/s. Bharath Plywood & Timber Products (P) Ltd. also resulted in seizure of 49 sheets (107 m2) finished commercial plywood, 56 sheets (110.42m2) finished Block Boards, and 101 sheets (212.83m2) of finished veneered particle boards (Total 206 Nos.) valued at Rs. 17,337.55 as these were found in excess of the recorded stock 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 Dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants went in appeal before the Tribunal, where firstly stay order SB/S/Order No. 225/1989 dated 3.7.1989 (Appeal Nos. 847-849 & 1345/89) was passed asking the appellant company to make pre-deposit of a sum of Rs. 6,50,000/- (Rupees Six Lakhs Fifty Thousand only) on or before 16th October, 1989. (ix) But the appellant company filed miscellaneous petition before the Tribunal seeking extension of time to comply with the Tribunal s order dated 3.7.89 regarding pre-deposit. (x) The Tribunal vide its SB/M/ Order No. 191/1989 dated 16.10.1989 granted further extension of time up to 30th January 1989 for complying with the Tribunal s order dated 3.7.1989. (xi) Further on the appellant company s petition, the Tribunal vide its SB/M/Order No. 11/1990 dated 30.1.1990 granted further extension of time for making pre-deposit till 30.04.1990, recording the appellant company s plea that they had already deposited Rs. 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 Rs. 2.5 lakhs and granted extension for complying the order of pre-deposit of Rs. 6.5 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06.2014, wherein the following observations/directions were made: "9. The fact remains that so far the abovementioned appeal has not been decided by any of the authorities. As matters stand now, Ext. P2 is the last communication by which the petitioner was informed that the records are not available. Under such circumstances, it is necessary in the interest of justice that the records are re-constructed and for that purpose, the petitioners as well as respondent authorities shall make necessary arrangement for production of copies of the available records, i.e. memorandum of appeal as well as connected records and the 1st respondent has to consider the matter and pass appropriate orders in accordance with law. Until such time, recovery pursuant to Ext. P7 has to be kept in abeyance." 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t attitude of the appellant seeking adjournment on these frivilous grounds is not acceptable. The sufficiency of the appeal papers, reconstructed documents itself requires examination which can be done when the party present their case for appeal. 4. As a last chance for the appellants, to present their case, the appeals are posted on 29.08.2017. We note that if the appellants are not making appearance to present their case, the Tribunal will be constrained to dispose of the appeals based on available records." 3. With above background of facts, we have heard both, the learned Advocate, Shri Romy Chacko for the appellants and the learned DR, Dr. Ezhilmathi for the Revenue. 4. The learned Advocate inter alia submits as under: (i) The appellants 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 recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s use of electricity for producing such unaccounted goods and so on. However in the case of unaccounted manufacture and clandestine clearances normally there cannot be 100% evidences on record as the persons committing such economic offences make conscious efforts that no footprints are left for their such nefarious activities. We take support in this regard from Hon'ble Supreme Court decision in the case of Collector of Customs, Madras and Others Vs. D. Bhoormull [1983 (13) E.L.T. 1546 (S.C.)]. The Hon'ble Supreme Court in the said case observes as under : "30. It cannot be disputed that in proceedings for imposing penalties under clause (8) of Section 167, to which Section 178A does not apply, the 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 mathem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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., and observations of the Hon'ble Supreme Court made in the above decision 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. We are of the view that 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. 6.2. The appellant also cited the case laws 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 Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a mere preponderance of probability, due regard being had to the burden of proof, is a sufficient basis of decision : but in the latter, especially when the offence charged amounts to treason or felony, a much higher degree of assurance is required. (BEST, S. 95). While civil cases may be proved by a mere preponderance of evidence, in criminal cases the prosecution must prove the charge beyond reasonable doubt. (See Sarkar on Evidence, 15th Edition, pp. 58-59) In the words of Denning LJ (Bater V.B, 1950, 2 All ER 458, 459) It is true that by our law there is a higher standard of proof in criminal cases then in civil cases, but this is subject to the qualification that there is no absolute standard 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal activities or manufacture being done by it. 6.5. CESTAT, Bangalore in the case of Ramachandra Rexins Pvt. Ltd. Vs. Commissioner of Central Excise, Bangalore-I [2012 (295) E.L.T. 116 (Tri.-Bang.) has held that only yardstick is preponderance of probability and not mathematical precision and on this yardstick department s case here has been sustained. It follows from the case law cited above that the department need not prove the case with mathematical accuracy. So long as the department has established the case with such a degree of preponderance the existence of a fact, it is sufficient. 6.6. Based on above discussions and the case laws cited, we are in agreement with the findings 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 wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lating the duty evaded by the Unit, the total production as per their private Production Register was calculated, production noted in RG-1 Register was subtracted and duty worked on the part of production suppressed from entering in RG-1 register. Therefore the amount demanded in this show-cause notice is not limited by any other assessment proceedings. 39. From the fact that they did not pay the EPF contribution to the Government which was collected from the employees is sufficient to prove that the company had total disregard for fulfilling their legal obligations. They also had submitted that they were not giving even a day s credit to their customers though 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluding the clandestinely cleared goods and in disposing the same so efficiently that no trace of evidence could be left out. And therefore he is liable for penal action under Rule 209A of the Central Excise Rules, 1944. 6.7. We are of the considered view that the appellants have not been able to counter any of the evidences against them available on record and discussed earlier above. When it is so, we sustain the confirmation of the demand of duty of Central Excise of Rs. 65,89,432.67 (Rupees Sixty Five Lakhs Eighty Nine Thousand Four Hundred and Thirty Two and Sixty Seven paisa only) as done in the impugned order along with the reasons given 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 Rs. 10,00,000/- (Rupees Ten Lakhs only) to Rs. 25,000/- (Rupees Twenty Five Thousand only) and the penalty imposed on Shri A.P.M. Mammootty from Rs. 2,000/- (Rupees Two Thousand only) to Rs. 1,000/- (Rupees One Thousan ..... 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