TMI Blog2013 (6) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... cation applied to it, maintaining of accounts for the excise purpose was not required. It is not disputed that the assessee was otherwise maintaining the accounts for the purpose of other laws like Sales Tax Act, Sales Tax Registration and its accounts were audited in accordance with the provisions of the Companies Act, 1956. In the Order-in-Original dated 17-6-2009, the adjudicating authority itself observed that there were no statutory records or excise records as they were dispensed with by the department since 2000 as a measure of simplification and the every manufacturer was required to maintain his own records and to device to his own record keeping method depending upon the accounting requirements. In this view and given the facts and circumstances of the case, the conclusion that the assessee had deliberately not maintained the accounts under the excise law could not stand and such a finding could be said to be baseless. Value of clearance - held that:- Even if the case of the department is taken at its best value, admittedly the total clandestine clearance was below the limit of 1.5 crores specified in the notification dated 1-3-2003. The approach of the Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the stock of finished goods lying the factory premises, it was noticed that the appellant had not maintained any books of accounts and the records regarding the stock of the goods lying in the factory as well as of the goods cleared. The stock of goods so detected, weighed 28,785.710 kgs. Valued at Rs. 46,05,714/- at Rs. 160/- per kg. The panchnama dated 1st July, 2008 was recorded. Amongst the two Directors of the company present at that time, the Investigating Officer recorded statement of Sandeep Ratibhai Patel, the appellant of Appeal No. 35 of 2012, under Section 14 of the Central Excise Act, 1944 (hereinafter referred to as the Act for sake of brevity). The stock of goods were seized. 3.2 The investigation resulted into issuance of a show cause notice dated 23rd December, 2008 by the competent Authority, the Assistant Commissioner, Central Excise Bhavan-II, Rajkot. The said notice was addressed to both the appellants herein in their respective capacities, and they were called upon to show cause as to why the seized goods of the value of Rs. 46,05,714/- should not be confiscated under Rule 25 of the Central Excise Rules, 2002 (hereinafter referred to as the Rules for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conclusion that the goods were clandestinely cleared, as there was neither any evidence nor were the details of any goods having been actually cleared in illicit manner. The learned advocate for the appellant submitted that even if for the sake of arguments the case of the Department was to be accepted, the total value of seized goods was of value of Rs. 96,65,000/-, which in any case, below the limit of Rs. 1.5 crores under the Notification, there was no case for taking any action against the appellant. 4.2 On the other hand, the learned advocate for the respondent-Department submitted that admittedly the appellant Company had not been maintaining accounts and there was no record available as regard volume of actual quantum of goods and the finished products. He submitted that the Director in his statement dated 1st July, 2008 clearly admitted clandestine clearance of Rs. 15 lakhs to Rs. 20 lakhs. He further admitted that the goods were supplied to the connected firms and for that, payments were received through Angadias and such transactions were unsupported by any invoices or any challan, as stated by him. He, therefore, submitted that the Order-in-Original and the confirmin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearances, specified in column (2) of the Table below (hereinafter referred to as the said Table) for home consumption of excisable goods of the description specified in the Annexure appended to this notification (hereinafter referred to as the specified goods), from so much of the aggregate of - (i) the duty of excise specified thereon in the first Schedule to the Central Excise Tariff Act, 1985 (5 of 1996) (hereinafter referred to as the First Schedule); and (ii) the special duty of excise specified thereon in the Second Schedule to the said Central Excise Tariff Act, 1985 (hereinafter referred to as the Second Schedule), as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table : Provided that nothing contained in this notification shall apply to a manufacturer who has availed the exemption under Notification No. 39/2001 Central Excise, dated the 31st July, 2001, published in the Gazette of India vide number G.S.R. 565(E), dated the 31st July, 2001, in the same financial year. Table Sr. No. Value of clearances Rate of duty (1) (2) (3) 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in suppression of production as well as cleared our product without issu ing invoices or Bills and thereby our firm has suppressed aggregate clearance value and not followed the C. Ex. Law procedure and accordingly they have recorded my statement as per them palatable version, is contrary to the correct facts. The statement recording from me on dated 1-7-2008, was under coercion, threat and duress. The same is not accepted to me and I retract the same by this affidavit. Further, the allegation of Central Excise Officers, regarding to our involvement in suppression of production and made clearance without issuing Bills/Invoices to our cus tomers and recovered some over and above amount, by way of incriminate nature through Angaliyas is contrary to correct; facts. They have forcibly extracted my statement as per them palatable version, as according to above, is taken under the threat, coercion, duress and undue hardship of the department. The same is retracted and discarded by me through this affidavit. Furthermore, in proceeding my statement, the inquiry officer, forcibly extracted my statement in the matter of M/s. Sundhal Aluminum, Ahmedabad, M/s. Shreeji traders, Ahm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng evidentiary value of confessional statements got recorded under such provision are laid down by the Courts. In CCE v. Duncan Agro Industries Ltd. [(2000) 7 SCC 53 = 2000 (120) E.L.T. 280 (S.C.)] with reference to Section 108 of the Customs Act, the Apex Court opined as under : 12.... The inculpatory statement made by any person under Section 108 is to non-police personnel and hence it has no tinge of inadmissibility in evidence if it was made when the person concerned was not then in police custody. Nonetheless the caution contained in law is that such a statement should be scrutinized by the court in the same manner as confession made by an accused person to any non-police personnel. The court has to be satisfied in such cases, that any inculpatory statement made by an accused person to a gazetted officer must also pass the tests prescribed in Section 24 of the Evidence Act. If such a statement in impaired by any of the vitiating premises enumerated in Section 24 that statement becomes useless in any criminal proceedings. 6.4 It was held that a statement recorded by the Customs Officer under Section 108 of the Customs Act, though admissible in evidence, the Court has to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritten by the Inspector, Central Excise, Morbi and the appellant stated to have put his signature below the same. When the said statement was read, it contained repeatedly made self-incriminatory statements and confessions about receiving of amount in cash through Angadia without receipts in the last financial year. A direct confession was also recorded in that statement to the effect that non-maintaining of accounts was with an intention to evade the duty. Having regard to the kind and nature of confessions mentioned in the statement, a bare reading thereof would give an impression that various statements were extracted by force and not voluntarily made. Apart that statement was retracted by the said Director by affidavit dated 26th July, 2008, it is also on record of the Appeal. 6.7 More importantly the statement in question was too weak to be relied on as evidence on law, in absence of any corroboration thereof by cogent evidence. The show cause notice mentioned the details of different firms such as Paresh Metals, Rajkot, M/s. Mangalm Metals, Ahmedabad, M/s. Krishna Metals, Ahmedabad, M/s. Sunil Metals, Ahmedabad, M/s. Harish Metals etc., to allege that the raw materials were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. In this view and given the facts and circumstances of the case, the conclusion that the assessee had deliberately not maintained the accounts under the excise law could not stand and such a finding could be said to be baseless. 6.9 Even if the case of the department is taken at its best value, admittedly the total clandestine clearance was below the limit of 1.5 crores specified in the notification dated 1-3-2003. The clearance value of the goods alleged to have been clandestinely removed upto 1st July, 2008 was Rs. 76.65 lakhs and even if the maximum goods of the value of Rs. 20 lakhs is accepted as stated by the Director in his said statement dated 1-7-2008, the total value comes to Rs. 96.65 lakhs, which is well under the exemption limit. There is also force in the submission of the appellant that the finding regarding clandestine removal was on the basis of goods which were lying in the factory premises at the time of inspection, and that there was no material or evidence establishing the actual clearance of goods, much less clandestine clearance. 6.10 Curiously, the adjudicating authority in the Order-in-Original accepted the position recording in paragraph No. 18 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., dated 1-3-2003 exempting the clearance upto aggregate of Rs. 1,50,000/-, which is applicable to the facts of the appellant. It is further held that the Tribunal committed a substantial error of law by overlooking that in view of Notification No. 8/2003-C.E., dated 1st March, 2003, Rule 25 of the Central Excise Rules, 2002 would not be applicable in case of the appellant. 9. The substantial questions of law are accordingly answered in affirmative and against the Department as above. 10. Both the appeals are allowed in aforesaid terms. As a result the Order-in-Original dated 17-6-2009 passed by the Assistant Commissioner Central Excise, Division-II, Rajkot and the order in appeal dated 20-11-2009 by the Commissioner (Appeals) stands set aside. 11. After the pronouncement of the order, Mr. Darshan Parikh, learned counsel appearing for the respondent prayed to stay the operation of the judgment, which has been delivered today. 12. Having heard learned counsel for the respondent Mr. Darshan Parikh, we do not find any reason to stay the order, which has been delivered toady. Hence, oral request of the learned counsel for the respondent is rejected. - - TaxTMI - TMITax - Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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