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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 ..... oor 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 of the appellant was running his business, they seized various documents from there. Since the authorisation of the survey was in the name of the appellant, therefore, the seizure memos were also prepared in its name. On the basis of those documents, proceedings were initiated against the appellant by the Commercial Taxes Department, Jaipur. Later on, these very documents were also handed over to the Central Excise Department by the Commercial Taxes Department. Officers of Anti Evasion Wing, Central Excise, Jaipur-I also conducted survey at the registered premises of the appellant on 6-7-2011. During survey, certain additional documents from the registered premises of the appellant as well as from the room of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and power consumption of his factory was very low therefore the said allegation is baseless. 5. It is argued that the Tribunal committed grave illegality in holding that the decision of the Rajasthan Tax Board in the proceedings under the Rajasthan VAT Act would not have any bearing on the proceedings under the Excise Act. This finding of the Tribunal is wholly perversse. The Rajasthan Tax Board has taken a view about these very documents that matter required whether they pertained to the firm of the brother of the appellant M/s. Future Control Corporation and remanded the matter back to the Assessing Officer in the VAT Act. The Assessing Officer under the VAT Act accepted the plea of the appellant-asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied 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 (S.C.); Commissioner of Central Excise v. Sandhi Threads, 2015 (321) E.L.T. 180 (S.C.) and judgment of the Customs, Excise and Gold (Control) Appellate Tribunal South Zonal Bench, Chennai in Commissioner of C. Ex. v. Turnbull Control System (I) Ltd., 2001 (97) ECR 146 (Tri.-Chennai). 7. Mr. Sanjay Jhanwar, Learned Counsel submitted that the Tribunal has also failed to appreciate that if the extent of production is estimated on the basis of power consumption in the factory premises of the appellant, its worth would be less than 1.5 crores in each financial year, which also proves that there was no clandestine removal of goods. It is argued that the appellant was not afforded opportunity to cross-examine the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 finding that levy of central excise duty and the consequential interest and penalty on the appellant has rightly been imposed. There was sufficient material for arriving at the finding that the appellant was engaged in clandestine removal of excisable goods. Adjudicating Authority has also levied penalty of Rs. 2,00,000/- on the brother of the appellant Shri Ravish Chandra Gupta, who although preferred appeal thereagainst before the Tribunal, which was also dismissed by common order along with appeal of the appellant herein but he chose not to further challenge the judgment of the Tribunal before this Court. In fact, the assessee-appellant filed application for rectification of mistake before the Tribunal. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 affidavit or statement supported by convincing evidence, stating that the earlier statement was recorded under pressure, coercion or compulsion. We deem it appropriate to reproduce para 15 of the said judgment, which reads thus, "15. In our view, the statements recorded under Section 132(4) have great evidentiary value and it cannot be discarded as in the instant case ITA No. 720/JP/2017, M/s. Bannalal Jat Construction Pvt. Ltd., Bhilwara v. ACIT, Central Circle-Ajmer by the Tribunal in a summary or in a cryptic manner. Statements recorded under Section 132(4) cannot be discarded by simply observing that the assessee retracted the statements. One has to come to a definite finding as to the manner in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Rs. 2 lakh was made and further that the assessee had admitted that he had earned commission from a party, which was not disclosed in the return filed by him and certain documents were seized which bore the signature of the assessee, in para 16 of the report held as under :- "16. Thus, in view of sub-sections (4) and (4A) of Section 132 of the Act, the Assessing Officer was justified in drawing presumption against the assessee and had made addition of Rs. 9 lakhs in his income under Section 68 of the Act. The onus was upon the assessee to have produced cogent material to rebut the aforesaid presumption which he had failed to displace. The assessee retracted from the said statement, vide letters dated November 24, 1998, and March 11, 1999, during the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 authorised officer during the course of the search and seizure to examine on oath any person who is found to be in possession or control of any books of account, documents, money or valuable articles or things etc. and record a statement made by such person which can be used in evidence in any proceedings under the Income-tax Act. The explanation appended to Clause (4) also makes it clear that such examination can be in respect of any matters relevant for the purpose of any investigation and need not be confined to matters pertaining to the material found as a result of the search. A plain reading of Section 132(4) would clearly show that what was intended by empowering an officer conducting the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct 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), Jaipur v. Shri Roshal Lal Sancheti (D.B. Income Tax Appeal No. 47/2018, decided on 30-10-2018) and the appeal filed by the appellant therein was also dismissed. 17. Significantly enough, when the assessee filed reply to show cause notice on 21-1-2013, he for the first time made reference to the affidavit of his brother but did not make any reference to his retraction letter dated 30-11-2011. It is thus clear that the statements of the appellant were recorded on as many as seven occasions during the period of six months, but he could not give any satisfactory answer to the different queries posed to him. If at all he was not doing this kind of business, he could have plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 the customers, who accepted manufacturing of their brand by the assessee. The assessee could not contradict these facts, as he failed to file affidavit of his helpers, transporters and customers. On the contrary, in his statement he agreed that he did not comply with the Central Excise Rules for the job work carried by him. 19. The judgments relied by Learned Counsel for the appellant do not afford any assistance to the appellant. The assessee has raised the argument of opportunity of cross-examination having not been provided to him for the first time before this Court and did not raise such argument before the Tribunal, which cannot be accepted. Argument of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot 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 engaged in manufacturing activities. It is also a fact that even after letter of retraction given by the appellant on 30-11-2011, his statements were recorded on 12-12-2011 and 15-12-2011 wherein also the appellant reiterated earlier statements and the fact that he gave earlier statements without any pressure. The Adjudicating Authority found corroboration to his statement from the material gathered during search, post search, statement of driver, some of the customers of the appellant, who admitted that they got their cables manufactured from the assessee; failure of the assessee to file affidavit of any of its helpers, workers, transporters, customers and admiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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