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TMI Blog2018 (11) TMI 1749X X X X Extracts X X X X X X X X Extracts X X X X ..... t filed application for rectification of mistake before the Tribunal. However, after objection by the respondent before this Court, the appellant did not press that application. Retraction of statements - HELD THAT:- Initial retraction was made by the appellant by sending a written letter addressed to the Commissioner, Central Excise dated 30-11-2011 but this was not supported by any affidavit. In this retraction letter, he stated that he gave the statement due to mental pressure created by Officers of Central Excise Department, who called him for about 10-12 times from 6-7-2011 to 29-11-2011. This letter of retraction was given five months after the first statement. The appellant therein did not utter a single word that the transactions were relating to his brother. Even after the letter of retraction was given on 30-11-2011, statement of the appellant assessee was again recorded on 12-12-2011 wherein also he reiterated his earlier statement and stated that he gave the earlier statements without any pressure. Thereafter again on 15-12-2011 his statement was recorded on seventh consecutive occasion, wherein he reiterated his earlier statement and stated that earlier statements w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt the Act ) seeks to challenge the judgment dated 5-9-2017 passed by the Customs, Excise Service Tax Appellate Tribunal, Principal Bench, Court No. 1, New Delhi (for short the Tribunal ) [2018 (359) E.L.T. 201 (Tri. - Del.)] whereby the appeal filed by the appellant was dismissed. 2. The factual matrix of the case is that the appellant is a sole proprietorship firm owned and managed by Mr. Ravindra Kumar Gupta. Appellant is engaged in the business of manufacturing and trading of Electricals Industrial Cables falling under Chapter 85 of the Act. The appellant is carrying out said business from the premises situated at J-874, Sitapura, Jaipur. The appellant claims to run its business from the ground floor of that premises and asserts that he gave first floor of the same premises on rent to his brother Shri Ravish C. Gupta for his business. Assistant Commercial Taxes Officer, Anti Evasion, Zone-I, Jaipur conducted a survey at the said premises on 29-11-2010. According to the appellant, no incriminating document/material was found from ground floor of registered premises of the firm but later on, when the Officers visited the first floor of the said premises where the brother o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for re-examination of the fact that whether the seized documents belonged to the appellant s brother. The Assistant Commissioner vide assessment order dated 9-6-2015 concluded that seized documents belonged to the appellant s brother and had no relation with the appellant. It is argued that the Tribunal failed to appreciate that the very foundation of the proceedings initiated by the Central Excise Department against the appellant was search proceedings carried out by the Commercial Taxes Department and when the said foundation had ceased to exist, the Tribunal in the present matter could not have mechanically upheld the order-in-original passed by the Adjudicating Authority. In any case, the Officers of the Central Excise Department were relying on the documents seized by the Commercial Taxes Department in which proceedings it was ultimately held that the documents did not belong to the appellant. The appellant also maintained before the authorities below that he is entitled to excise exemption as the goods were manufactured on job work basis. While as per the show cause notice, huge quantity of cable is alleged to have been manufactured by the appellant but production capacity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is argued that statement of the said driver of the vehicle was also relied by the Tribunal but he in his statement not stated that he was delivering the goods of the appellant. He rather stated that vehicle was registered in the name of brother of the appellant. Thus, it is clear that the Tribunal failed to appreciate that further demand of ₹ 1,48,144/- for the period 2011-12 alleging clandestine removal of goods has been made on mere suspicion without any credible/documentary evidence on record establishing the details of raw material purchased, payment made, to whom finished goods were delivered and how the payment was received for the same. Central Excise Authorities have neither investigated nor verified the fact that the popularity of brand name or trade name given on the alleged goods were of other firms. Without investigating the popularity or ownership of the brand name or trade name, the conclusion that said trade name/brand name belongs to others is baseless. Learned Counsel in support of his arguments relied on the judgments of the Supreme Court in Astra Pharmaceuticals (P) Ltd. v. Collector of Central Excise, Chandigarh, (1995) 2 SCC 84 = 1995 (75) E.L.T. 214 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Adjudicating Authority and the judgment passed by the Tribunal. He argued that even though proceedings were instituted by the Excise authorities on the basis of inputs received from the VAT authorities, but thereafter Excise authorities themselves conducted survey of the factory premises of the appellant. Statement of the appellant Ravindra Kumar Gupta under Section 108 of the Act was recorded on as many as seven dates. This statement was not retracted by any procedure known to law. The Excise authorities have found independent corroboration to his testimony from various statements, documents and other material. Learned Counsel, in support of his arguments, has cited judgment of the Supreme Court in Ram Lal v. State of Himachal Pradesh (Criminal Appeal No. 576 of 2010 decided on 3-10-2018) and judgment of this Court in M/s. Bannalal Jat Constructions Pvt. Ltd. v. ACIT, Central Circle-2, Ajmer (D.B. Income Tax Appeal No. 140/2018, decided on 31-8-2018). 9. Upon hearing Learned Counsel for the parties and perusing the material on record, we find that the Adjudicating Authority as well as the Tribunal after examining the factual matrix of the case have recorded concurrent findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a single word that the transactions were relating to his brother. Even after the letter of retraction was given on 30-11-2011, statement of the appellant assessee was again recorded on 12-12-2011 wherein also he reiterated his earlier statement and stated that he gave the earlier statements without any pressure. Thereafter again on 15-12-2011 his statement was recorded on seventh consecutive occasion, wherein he reiterated his earlier statement and stated that earlier statements were given by him without any pressure. 11. This Court in CIT, Bikaner v. Ravi Mathur, 2017 (1) WLC (Raj.) 387, after considering catena of previous decisions, held that the statements recorded under Section 132(4) of the IT Act have great evidentiary value and they cannot be discarded summarily and cryptic manner, by simply observing that the assessee retracted from his statement. One has to come to a definite finding as to the manner in which the retraction takes place. Such retraction should be made as soon as possible and immediately after such statement has been recorded by filing a complaint to the higher officials or otherwise brought to the notice of the higher officials by way of duly sworn affi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements are incorrect/wrong and that burden has to be discharged by an assessee at the earliest point of time and in the instant case we notice that the AO in the Assessment Order observes :- Regarding the amount of ₹ 44.285 lakhs, it is now contended that the statement u/s 132(4) was not correct and these amounts are in ITA No. 720/JP/2017 M/s. Bannalal Jat Construction Pvt. Ltd., Bhilwara v. ACIT, Central Circle-Ajmer thousands, not lakhs i.e. it is now attempted to retract from the statements made at the time of S S operations. Therefore, what we gather from the Assessment Order and on perusal of the above finding that the retraction was at the stage when the assessment proceedings were being finalized i.e. almost after a gap of more than an year. Such a so-called retraction in our view is no retraction in law and is simply a self-serving statement without any material. 12. The Punjab and Haryana High Court in Commissioner of Income-Tax v. Lekh Raj Dhunna - (2012) 344 ITR 352, taking note of the fact that the assessee had made a statement under Section 132(4) of the IT Act whereby a surrender of ₹ 2 lakh was made and further that the assessee had adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon. 14. The High Court of Kerala in The Commissioner of Income Tax v. O. Abdul Razak - (2013) 350 ITR 71, in para nos. 8, 9 and 10 of the report, held as under :- 8. It cannot be doubted for a moment that the burden of proving the undisclosed income is squarely on the shoulders of the department. Acquisition of properties by the assessee are proved with the documents seized in search. Since under statement of consideration in documents is the usual practise the officer questioned the assessee on payments made over and above the amounts stated in the documents. Assessee gave sworn statement honestly disclosing the actual amounts paid. The question now to be considered is whether the sworn statement constitutes evidence of undisclosed income and if so whether it is evidence collected by the department. In our view the burden of proof is discharged by the department when they persuaded the assessee to state details of undisclosed income, which the assessee disclosed in his sworn statement, on being confronted with the title deeds seized in search. 9. Section 132 of the Income-tax Act deals with search and seizure and sub-section (4) of Section 132 empowers the authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive. Therefore, a statement made voluntarily by the assessee could form the basis of assessment. The mere fact that the assessee retracted the statement could not make the statement unacceptable. The burden lay on the assessee to establish that the admission made in the statement at the time of survey was wrong and in fact there was no additional income. This burden does not even seem to have been attempted to be discharged. Similarly, P.K. Palwankar v. CGT, [1979] 117 ITR 768 (MP) and CIT v. Mrs. Doris S. Luiz, [1974] 96 ITR 646 (Ker) on which also Learned Counsel for the assessee placed reliance are of no help to the assessee. The Tribunal s order is concluded by findings of fact and in our view no question of law arises. The applications are, accordingly, rejected. 16. This Court in M/s. Bannalal Jat Constructions Pvt. Ltd. (supra) was also dealing with cases where statement of retraction was made with delay and the same was not accepted and the appeal filed by the assessee-appellant therein was dismissed by this Court. The aforesaid judgment in M/s. Bannalal Jat Constructions Pvt. Ltd. (supra) was further followed by this Court in Pr. Commissioner of Income Tax (Central), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment belonged to his brother or that he was ever under the impression that search was carried out at his brother s premises. 18. With regard to the orders received from other customers, stand of the appellant was that such orders were received on phone and no agreement was entered into between his concern and the customers. He confirmed seizure of the loose slips from his premises by the sales tax authorities as also the fact that goods were being manufactured without paying central excise duty. The assessee in his statement also admitted that raw material of copper wire was purchased in cash and after manufacturing, power cable they were sold without invoices. The details mentioned in the kachi parchies (loose papers) were not accounted for tax. He also admitted that the premises was shown to have been given on rent to Power Flex due to problem in TIN number, whose proprietor was also the assessee. All these factors were posed to the assessee in show cause notice, but he failed to give any satisfactory explanation. His statements were therefore rightly read by the Adjudicating Authority. Post search material also found corroboration from the material gathered from some of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Excise Act, which in the present case, has independently arrived at the conclusion on the basis of material before it. No doubt, such inputs provided by the VAT authorities were also initially looked into by the Excise authorities but they chose to rely on the material and evidence which they themselves gathered independent of the inputs provided to them by the VAT authorities. Therefore, the findings recorded by the Adjudicating Authority in the order-in-original, which were upheld by the Tribunal, cannot be said to be perverse. The so-called retraction by filing an application and that too after five months from recording of statement of the appellant cannot be considered as valid retraction in the eyes of law. It has to be castigated as an afterthought. The shifting stands taken by the appellant and his brother as also the fact that the brother of the appellant despite being summoned by the Adjudicating Authority several times did not appear before it. It was the appellant, who himself filed affidavit of his brother before the Adjudicating Authority on 29-8-2011 wherein he stated that he was carrying out trading and job work but nowhere it was mentioned that he was also en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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