TMI Blog2015 (4) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.3.2003 and 1.8.2003 but he appeared only on 1.8.2003 when he so claimed. Difference between the quantities shown in the loose sheets and the RG-I register is precisely 500 pouches with respect of the pouches of ₹ 1 each and in full hundreds like 100, 200, 500 (save for one which is 150) for pouches of ₹ 2 each. Such neat differences are too neat to be really realistic in the given circumstances and raise a doubt about the genuineness of the RG-I register produced on 1.8.2003 when the said RG-I register was never produced by the appellants on the day of the visit/search and thereafter up to almost two years (i.e. up to 1.8.2003). The RG-I register was not recovered during search also. There was also no mention of the RG-I register in the statements of the proprietor or the authorised signatory; not even to the effect that it existed even if not found then, although RG-I register is required to be present in the factory 24x7 and is required to be made available to Central Excise officers on demand for verification. All of these facts, factors and circumstances are compelling to infer at least on the principle of preponderance of probability that the so called ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissionerate visited the factory and residential premises of the appellant on 4.10.2001. During the course of search of the residential premises 14 loose sheets written on both sides papers pertaining to the factory accounts were recovered and resumed by the officers for further investigations. The said 14 loose sheets were shown to Shri Parveen Kumar, Proprietor of the Appellant s firm and statement dated 4.10.2001 was recorded under Section 14 of the Act ibid. Wherein he admitted the recovery of the loose sheets from his residential premises and stated that the same contained details of the clearances effected by him in a clandestine manner without discharge of Central Excise duty and without issue of proper document. He also handed over none cheques of ₹ 1,00,000/- each totaling ₹ 9,00,000/- towards Central Excise Duty evaded. Statement of Shri Rajender Kumar, Authorized Signatory was also recorded on 8.10.2001 under Section 14 of the Act ibid. Wherein he admitted the contents of the statement dated 4.10.2001 of Shri Parveen Kumar, Proprietor of the Appellant s firm. The appellant informed the department that he had deposited ₹ 4 Lacs vide TR-6 Challans dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the packing of their finished goods. The sheets also contained the details of lime tubes purchased and issued for putting in the pouches. The pouches referred in the loose sheets relate to small/big pouches. Small pouch of 1/- or 2/- means one pouch of having MRP 1/- or 2/- whereas a big pouch of 1/- or 2/- means the outer bag wherein 40 pouches of ₹ 1/- or 20 pouches of ₹ 2/- are packed. The various words like Small pouches Big pouches and Lime tubes are clearly mentioned on the loose slips. The loose slip shows the opening balance, the quantity received/ used in particular month and the figure carried forward. This quantity of receipt of pouches or lime tubes is duly available in accounts books. The quantity of pouches used relates to the quantity manufactured, which is duly entered in RG-1 account. However the Central Excise officers made Shri Parveen Kumar to write that the loose sheet contain the details of clearances effected by him in clandestine manner. He denied as the same was against evidence on records. ii) That, the whole case of the department is based on those 14 loose sheets which the department has assumed to contain the details of goods clandest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid pouches and had been duly accounted for in their statutory records like RG-1 and had been cleared on payment of duty except negligible wastage during process of manufacture. He enclosed month wise comparative figures for ready reference. v) That, the statement of Shri Parveen Kumar wherein he is said to has stated that such loose sheets show the figures of removal of finished goods is not correct statement which is contrary to the documentary evidence on record which shows that statement was not recorded voluntarily. He submitted that the sheets contained the details of pouches used during a particular which correspond with each and every entry available in the statutory records which has been ignored and the statement which was contrary to facts on records has been relied upon. He submitted that the uncorroborated statement under no circumstances can be treated as voluntary due to the fact that very contents of the statement are contrary to the facts on record and duly verified by the department. vi) That, it is well settled that where two pieces of evidence are there, one oral and the other documentary, the documentary evidence has to be preferred. He submitted that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w material and buyers of the finished goods alleged to has been removed during the period from May 1997 to September, 2001 details of which were hand written in those 14 loose sheets. During the course of investigation, another statement of Shri Parveen Kumar was recorded on 1.08.2003 under Section 14 of the Act ibid. Wherein he associated with the Central Excise Officers in preparing the detailed month wise statement out of the 14 loose sheets and explained the entries in the loose sheets and stated that those loose sheets contained the details of purchase and utilization of pouches of different sizes and lime tubes and tally with its usage in RG-1 and there was very minor difference which is due to loss/wastage occurred during the manufacturing process. The appellant in the reply to the show cause notice relied on the statement dated 1.08.2003 and also submitted detailed comparative charts, copies of the RT-12 Returns and month wise extracts of the RG-1 register along with purchase bills of each and every entry receipt of pouches/lime tubes reflected in the 14 loose sheets and claimed that those accounts hand written in the loose sheets are mere duplicate of the statutory records ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that finding of clandestine removal based on a bald and uncorroborated statement which is contrary to the facts on record is neither justified nor sustainable. There is no indication in the show cause notice that any attempt was made to identify the buyers of the excisable goods allegedly been removed clandestinely by the appellant continuously for a huge period of four years. On the contrary the appellant has explained the entries in 14 loose sheets vide his statement recorded on 1.08.2003 under Section 14 of the Act ibid and has also been able to establish that those entries pertain to the receipt and utilization of inputs duly entered in the statutory records and production on that account entered in the RG-1 and declared in the RT-12 Returns submitted to department periodically but the same has been ignored by the adjudicating authority considering them as an after thought. The uncorroborated and bald statement of the appellant in the instant case is an incomplete and inconclusive piece of evidence and cannot be made sole basis for holding the appellant guilty of the manufacture and removal of the finished goods without payment of duty during the relevant period in the abs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authorized representative given at the time of search. We have examined the said sample loose sheets placed on record. The same contain certain date and figures under the heading small pouches, big pouches and lime tubes. The Commissioner (Appeals) has examined the said loose sheets and has come to the conclusion that the same relate to the quantity of the packing materials, which is one of the raw materials. The quantities mentioned in the said loose sheets stand verified by him and compared with the recorded entries made in the statutory records. A detailed chart stands prepared which only show the difference of 500 pouches per month, which stands attributed to loss/wastage during the course of manufacture. The revenue in their grounds of appeal have not rebutted the above finding of fact by the appellant authority. There is no ground challenging the findings that the entries made in the said loose sheets, duly tallied with the statutory records. The revenue s only grievance is that Shri Parveen Kumar as also Shri Rajender Kumar, in their initiating statement, given at the time of search have admitted clandestine activities. However, as rightly observed by the Commissioner (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. Shri Praveen kumar, Proprietor of the appellant s firm in his statement dated 4.10.01 admitted recovery of 14 loose sheets from his residential premises and admitted that the same contained details of clearances effected by him in clandestine manner without discharge of central excise duty and without issue of proper documents. 9 Cheques of ₹ 1 lakh each totalling ₹ 9 lakh towards central excise duty evaded, were handed over. Statement of Shri Rajender Kumar, authorised signatory was also recorded on 8.10.01 wherein he admitted contents of the statement dated 4.10.01 of the proprietor Shri praveeen Kumar. He also informed that they have further deposited ₹ 4 lakh by TR-6 challan dated 13.10.01 and 8.11.01. During further statement dated 1.8.2003, appellant raised a question mark on the voluntary statement before adjudicating authority. Commissioner (Appeals) held that findings of the adjudicating authority was based on probability and dropped proceedings. Leaned Member (J) after going through the facts of the case as well as findings of the Commissioner (Appeals) came to the same conclusion that the statements of Shri Praveeen Kumar and Shri Rajender Kumar, au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that details given in the loose papers relating to Praveen Chhap Tobacco pouches and Lime Tubes. Adjudicating authority did not find any convincing evidence and also did not rely upon statement which was retracted after two years and consequently confirmed duty amounting to ₹ 30,74,033/- under section 11A(1) alongwith interest on said duty and equivalent amount of penalty under section 11AC ibid and Rule 173Q of erstwhile Central Excise Rules,1944 and Rule 25 of erstwhile Central Excise (No.2) Rules, 2001. 15. From the SCN issued to the respondent, following evidences came before the adjudicating authority in addition to the points which have been stated in the preceding paragraphs. (a) The officers visited the factory premises of M/s. Praveen Kumar Co. situated at A-163, Majlis Park, Azadpur, Delhi engaged in the manufacture of Praveen Chhap unmanufactured branded chewing tobacco. The officers conducted physical stocktaking of the finished goods as well as raw materials, lying in the factory premises in the presence of Shri Praveen Kumar, proprietor. As a result of physical stocktaking, 13 bags of Praveen Chhap unmanufactured tobacco weighing 7 kgs containing 500 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his voluntary statement recorded under section 14 admitted the contents of the statement dated 4.10.2001 of Shri Praveen Kumar recorded on the spot under section 14; that he was also present throughout the proceedings on 4.10.2001, he also confirmed that 9 chequess each of Rs.One lac were handed over by them for covering removal of Praveen Chhap Tobacco without payment of duty. He confirmed the recovery of 14 hand written pages showing details of production and clearance of Praveen Chhap Tobacco without payment of duty. (d) It is further very relevant to note that the respondent deposited further ₹ 4 lakh which was in addition to the amount already deposited amoauant of ₹ 9,00,000/- This amount was promised to be deposited by Shri Praveen Kumar in his statement dated 4.10.2001. (e) Department has been asking for certain documents relating to income-tax returns of Shri Praveen Kumar, M/s.Rajender General Store and M/s.Mittal Trading Co. for the last five years or since inception but the respondent failed to supply the same. Later on, they only supplied the balance sheet on 14.1.2012. (f) It is also evident from record, that the details of receipt and use/uti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Main point for determination is that whether the statement of proprietor and authorised signatory which were given during visit of officers in the business premises and residential premises requires further elaboration though clear confessional statements of proprietor and authorized signatory were made. Further these statements were duly supported with recovery of documents clearly indicating clandestine manufacture and removal without payment of duty. This is fact on record that retraction has been made after two years when deposit of duty on evaded goods have been paid voluntarily without any duress. No protest was lodged. Deposit of further ₹ 4 lakh was made after gap of six months. I am convinced that the conduct of proprietor and his authorised signatory clearly points out that they were not maintaining any record in proper way leading to unaccounted production of Praveen Chhap Tobacco found in the factory. It was also on record that loose sheets quoting the details of pouches which were filled with tobacco later cleared and admitted by both proprietor and authorised signatory clearly indicated that there was non accountal in the statutory records and later Praveen Chha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents were retracted in a case 2011 (270) ELT 643 (S.C.) Commissioner of C. Ex Mumbai verses Kalvent goods India Pvt. Ltd where in Supreme Court held that where statements were given by own volition and there is no allegation of threat, force, coercion, duress or pressure being utilised by the officers, these statements will be considered made of their own volition. These findings are further supplemented with the facts that amount of ₹ 9,00,000/- (Rupees nine lakhs) and later on ₹ 4,00,000/- (Rupees Four lakhs) were deposited on their own volition without any duress and pressure. 22. Keeping in view the facts and circumstances relating to all the statements as well as deposit of duty through cheques as well as through cash and clear admittance of clandestine manufacture and clearance by the proprietor and authorised signatory that Pouches filled with Tobacco were cleared details of which were mentioned in seized papers, it is evident that Praveen Kumar Company has indulged in the clandestine manufacture and removal. Duty has rightly been demanded by the adjudicating authority vide his Order-In-Original. Commissioner (Appeals) has not been able to clearly bring out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter two years, there could be no issue of retraction. Statement of Shri Praveen Kumar recorded on 9.8.2003 is merely an afterthought as he has already admitted in his statement dt.4.10.2001. The said statement of 4.10.2001 was voluntary in nature and it was never retracted on the plea that same was obtained by coercion or extortion. Actually facts were in their personal knowledge and there was no duress to conclude that confessional statements were not fair. Further there are indication of manipulation of records as after proper confirmation of evasion and alter payment of duty in two instalments, attempt has been made to manipulate the records with clear intention to defraud government revenue. 25. In view above, I respectfully disagree with findings of learned Member(J). I set-aside the findings recorded by Commissioner (Appeals) and upheld the findings recorded by adjudicating authority. (Manmohan Singh) Member (Technical) Difference of Opinion Whether as per findings of Member (Judicial) that mere based on confessional statement, no duty could be demanded as other evidences relating to manufacture, procurement of raw materials and transportation have not been prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise duty and without issue of proper document. He also handed over nine cheques of ₹ 1,00,000/- each totalling ₹ 9,00,000/- towards Central Excise duty evaded. Statement of Shri Rajender Kumar, Authorised Signatory was also recorded on 8.10.2001 under Section 14 of the Act ibid. wherein he admitted the contents of the statement dated 4.10.2001 of Shri Praveen Kumar, Proprietor of the Appellant s firm. The appellant informed the department that he had deposited ₹ 4 lakhs vide TR-6 Challans dated 13.10.2001 and 8.11.2001. Statement of Shri Praveen Kumar, Proprietor was again recorded on 1.8.2003 under Section 14 of the Act ibid. wherein he furnished month wise details of production and details covered under the 14 loose sheets recovered from his residence on 4.10.2001 28. During the hearing before me it was conceded by the ld. Advocate for the respondents that the proprietor Shri Praveen Kumar, in his statement recorded on 4.10.2001 admitted that the said 14 loose sheets were recovered from his residential premises, and that the same contained details of the clearances effected by him in a clandestine manner without discharge of Central Excise duty. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mar, authorised signatory in his statement dated 8.10.2001 for which again there have been no allegations/representation that the same was obtained under duress. As regards the main contention of the Advocate that in the statement dated 1.8.2003 they explained all the entries of the loose sheets vis-a-vis RG-I register which showed only minor month wise difference of 500 whereby claiming that the loose sheets actually contained details of legitimate clearances only. I find that the proprietor was repeatedly summoned on 7.1.2003, 26.3.2003 and 1.8.2003 but he appeared only on 1.8.2003 when he so claimed. In this regard, I have seen the chart in para 5 of the order-in-appeal which is re-produced below : MONTH/YEAR Quantity of small ₹ 1/- Pouches Oct, 1998 255500 255000 500 25100 25000 100 Quantity of small ₹ 2/- Pouches Nov.,1998 254500 254000 500 26500 26000 500 Quantity as per loose papers Dec.,1998 255500 255000 500 26650 26500 150 Quantity as per RG-I Jan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to by them in that regard, I would like to state that the proposition is totally acceptable and therefore there is no need to analyse the judgements referred to by them in that regard. The statements of Shri Praveen Kumar, Proprietor dated 4.10.2001 and Shri Rajender Kumar, authorised signatory on 8.10.2001 are clearly inculpatory. Further the said statements are duly supported by 14 loose sheets containing the details which were admitted to be the details of clandestine clearances, by both the proprietor himself as well as the authorised signatory. Thus here is a case of oral evidence (confession) of proprietor as well as the authorised signatory recorded on two different dates and supported by the documentary evidence in the form of 14 loose sheets recovered from the residence of the proprietor. The details contained in these loose sheets were clearly admitted by the proprietor and the authorised signatory to be the details of clandestine clearances. Thus, it is not a case of mere oral evidence unsupported by documents. A much later claim of the proprietor that those 14 loose sheets essentially contained the details of the RG-I register has been shown to be lacking a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tracted when circumstances not showing any use of threat or coercion and also when corroborated by statements of other persons. In the case of K.I. Pavunny Vs. Assistant Collector (HQRS), Central Excise Collectorate, Cochin - 1997 (18) RLT 641 (SC), the Supreme Court held that confessional statement under Section 108 of the Act, 1962 is admissible as person giving statement is not an accused and voluntary statement is not to be a characterised to have been obtained by threat, inducement or promise and further, that the burden is on the person to prove that his statement was obtained by threat inducement or promise. The Hon ble Supreme Court further observed that there is no prohibition under the Evidence Act to rely upon the retracted confession to prove the prosecution case or make the same basis for conviction of the accused. In the case of Collector of Customs Vs. Mahindra Chandra Dey, Calcutta High Court held that principles relating to inadmissibility of confessions under Cr P.C. 1973 are not applicable to confessions made under Section 108 of the Customs Act. Incidental reference can also be made to the case of CCE, Chandigarh Vs. Nabha Steels Ltd. 2004 (169) ELT 345 (Tri.- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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