TMI Blog2017 (2) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... d the same without payment of excise duty merely on the basis of LRs when there is no proof of actual delivery of the raw materials said to have been transported under the LRs. to the appellant and the persons said to have accompanied the trucks could not be identified? - Held that: - The Tribunal was justified to coming to conclusion that appellant was involved in clandestine manufacture of the goods and clearing of the same without payment of Excise Duty. Whether, the alleged receipt of one of the raw materials viz. scented tobacco by itself was sufficient to hold that there was corresponding manufacture and clandestine clearance of “Gutkha” (pan masala) when there is no evidence of purchase of other major ingredients like supari, katha, lime, menthol and kimam and there is also no evidence regarding manufacture of “Gutkha” as also in respect of clearance and financial transactions the same? - Held that: - The receipt of raw material coupled with other evidence as discussed by this Court and by the Tribunal, the Tribunal was justified in holding that there was corresponding manufacture and clandestine clearance of Gutkha by the appellant. Appeal dismissed - decided against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations, the DGCEI came to conclusion that the present appellant was involved in clandestine manufacture and clearance of 39,44,21.52 Kilograms of Gutkha or 1,97,21,05,260 number of pouches of 2 Grams each and a show cause notice was issued to the appellant alongwith 12 other notices demanding Excise Duty amounting to ₹ 39,44,21,052/- and interest thereon and proposal for imposing penalty was also made for evading the Central Excise Duty on the aforesaid amount. 6- A reply was filed to the aforesaid show cause notice. A demand was raised in respect of period w.e.f. 25/04/1998 to 17/02/2000. Reply was submitted to the show cause notice dated 30/01/2004 and after hearing the appellant as well other persons, an order dated 23/04/2003 was passed dropping the proceedings by Commissioner of Central Excise. The department went in appeal against order passed by the Commissioner before the Tribunal and the Tribunal has passed the final order on 06/03/2012 holding that the appellant has clandestinely manufactured and cleared Gutkha and have evaded payment of Excise Duty. 7- Against the order passed by the Tribunal, appeal has been preferred before this Court under Section 35-G of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has been argued that the Tribunal has confirmed the part of the demand raised in the show cause notice and remanded the matter for quantification of the same on verification of the records. It has been further argued that the Tribunal has failed to appreciate that the learned Adjudicating Authority has considered all the evidences on record in detail and only thereafter, had dropped the duty demand on the appellants and discharged the appellants from the allegation of clandestine removal for not having evidence. 11- He has stated that the Tribunal in the impugned order has held that the evidence pertaining to Sarita Roadways is reliable without appreciating the findings of the adjudicating authority and the contentions of the appellants is that in the present case, the confirmation of demand is based on only the Lorry Receipts and statement of one Mr. Devi Prasad Pande, owner/partner of M/s. Sarita Roadways. The Tribunal has relied on these evidence despite the fact that the Lorry Receipts and the statement of Shri Devi Prasad Pande does not conclusively prove that the goods were in fact transported to the factory of the appellants. This is particularly so, when the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e raw materials. Out of these 31 consignments, 27 bear vehicle numbers as per the LRs. The respondents have failed to produce even a single statement from the drivers/transporters of these vehicles showing the delivery of the material at the appellant's factory. This is necessary because the transporter could not identify the person who accompanied the goods and to whom the goods were handed over and in view of the fact that there are manufacturers making fake products and therefore, the appellant submits that even though the LRs bear the name of the appellant, the same cannot be relied upon as a reliable evidence of the delivery of the material at the appellant's factory. 15- It has been further contended that it is not the case of Department that the investigating officers were not aware about the importance of the recording of statements of the drivers/owners of the vehicles to collect as a piece of evidence against the appellants. They have already recorded the statements of three drivers though proving unsuccessfully the transportation of the material to the appellants factory. Hence in all probability some of the driver might have been contacted and they might have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ande pertaining to Sarita Roadways is not sustainable. The Tribunal has taken note of the affidavit filed by the persons whose cross examination was denied by the Commissioner and held that no purpose would be served in sending back to the case for cross examination after 12 years. Shri Pande in the affidavit stated that the goods were not delivered at the factory of the appellant, despite nothing that as a good piece of evidence, the Tribunal erred in relying on the LRs of Sarita Roadways. 18- In the show cause notice, there is a reference to the Lorry Receipts of transport arrangements made by M/s. Sarita Roadways, Wagholi, Pune wherein details such as date, name of the consignor and consignee, quantity and description of the goods stated to be transported from M/s. Suresh Enterprises to the appellant at Indore have been mentioned. According to the show cause notice, in the year 1998-99, the appellant has received 1517 bags of 45.510 MTs. Of scented tobacco. The appellant submits that these Lorry Receipts cannot be relied upon to allege that appellant has received scented tobacco from M/s. Suresh Enterprises for the reason of non-corroboration by any document recovered from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the drivers at any factory premises. 21- Assuming but not conceding that even though there was any receipt of material covered under the said LRs at the appellant's factory, there is no an iota of evidence that these were used for clandestine manufacture and clearance of Gutkha which needed other principal raw materials like supari, katha, lime, menthol, kimam and lamination to manufacture the same. 22- It has been further contended that the Tribunal has assumed clandestine manufacture and removal of Gutkha on the basis of certain corroborated evidence without appreciating the evidence produced by the respondents as well as the defence of the appellants objectively which is bad in law. 23- Learned counsel submits that the appellant has already explained to investigating officers the circumstances under which 43 Nos. of form, filling and sealing machines/pouch making machines were purchased in the factory while actually 8 of them were actually installed at a time as per the declaration. This fact was very much evident when the investigation officers had actually found that merely eight machines were installed in the factory whereas other machines were lying unin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1986 (26) ELT 333 (Tribunal), Icy Cold Commercial Enterprises Vs. Collector of C. Ex., Calcutta-1 reported in 1994 (69) ELT 337 (Tribunal), Krishna Co. Vs. Collector of Central Excise, Jaipur reported in 1998 (97) ELT 74 (Tribunal), Gurpreet Rubber Industries Vs. Collector of C. Ex., Chandigarh reported in 1996 (82) ELT 347 (Tribunal), Metal Fitting (P) Ltd. Vs. Collector of Central Excise, Delhi reported in 1997 (93) ELT 747 (Tribunal), Commissioner of Central Excise, Chandigarh Vs. Dashmesh Castings (P) Ltd. reported in 2000 (40) RLT 1077 (CEGAT), M/s. Raj Sandeep Vs. CCE, Chandigarh reported in 1999 (31) RLT 324, Kothari Pouches Ltd. Anr. Vs. Commissioner of Central Excise, News Delhi reported in 2000 (41) RLT 209 (CEGAT), Chariot Cement Co. Vs. CCE reported in 2003 (110) ECR 205 (Tribunal) and Durga Trading Co. Ors. Vs. CCE reported in 2003 (59) RLT 273 (CEGAT- Del.). 26- This Court has carefully gone through the aforesaid judgments relied upon by the learned counsel for the appellant and also heard learned counsel for the respondent. Learned counsel for the respondent has placed reliance upon judgment delivered in the case of Collector of Customs, Madras Vs. D. Bhoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oadways. In brief, the evidence relating to transportation and receipt of scented tobacco by RSC / RSI is as follows :- 3.2 Evidence regarding transportation by Sarita Roadways (7.53 MT) a. Recover of Lorry Receipts (LRs) from Sarita Roadways, Pune giving details like name, name of consignment, quantity and description which clearly shows that 2060 bags of scented tobacco and 172 drums of kimmam were transported by them from SE Pune to RSC and RSI, Indore during 1998-99. b. Statement dated19.03.2000 of Shri Devi Prasad Pande, owner / partner of M/s. Sarita Roadways, Pune wherein he has stated these consignments were produced by SE, Pune an that Shri Ramesh Pardeshi from SE Enterprises and Shri Ramesh Pardeshi from M/s. Suresh Enterprises used to visit them for booking consignments to Indore parties, that M/s. RSC, RSI and Shri Suresh Jajra proprietor of M/s. SE,Pune used to make enquiry if there were any delays in transportation of goods. c. Statement of Shri Suresh Jajra, Prop. Of SE, Pune dated 17.04.2000 wherein when confronted with evidence recovered from Sarita Roadways, he admitted clandestine clearance of entire 70.86 tons of scented tobacco manufactured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 08.05.2000, shri Suresh Jajra stated that he accepted Central Excise Duty Liability on the entire quantum of scented tobacco manufactured and cleared through M/s. Sarita Roadways, Pune. Accordingly ₹ 1 crore of the duty amount was deposited by them voluntarily (as seen in para 17 of order-in-original dated 15.05.2002 in case of SE Pune), it appears that this demand got subsequently set aside because of findings that scented tobacco was not excisable. 10.5 The respondents submit that there is no mention of goods in LRs. The weight has been calculated on the basis of the statement dated 09.03.2000 of Shri Devi Prasad Pande of M/s. Sarita Roadways wherein he stated that the consignment of scented tobacco was received in gani bags weight 30 kgs. each approx. 10.6 The respondent submits that the statement of Shri Pande that in case the consignments were delayed, the persons from respondent or some time Shri Suresh Jajra proprietor of SE, Pune used to contact him his office to make enquiries regarding whereabouts the delayed consignments is a very vague statement and can not be given any credence. 10.7 , 10.08 and 10.09 which is on page no.340 and 341 and the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In response to your summons I have appeared before you today at your office at 6th floor, vora Kothari building, 1025, sudashiv peth, pune ,for giving my statement. Before giving this statement I was explained the provision of section 14 of the Central Excise Act 1944 and according to which I understand that during this course of this enquiry I am bound to state only the truth. I am also made aware that if my statement or part there of proves to be false later on, I shall be punishable under the provision of section 174, 175 of the Indian Penal Code. With this understanding I shall proceed on giving my truthful statement here in under. My name, address, location etc as mentioned above are correct. I am a graduate in Arts from Allahabad University (UP). Prior to March I was working with Syndicate Road carrier, Wagholi, and thereafter wards I became the partner of M/s Sarita Roadways, Wagholi. The other partner s name is Shri Hemant Kumar Pande. On being asked to state the number of transport vehicles owned by our firm or by myself, I have to state that no vehicle ownership is in the name of M/s Sarita Roadways or in the name of its partners. However I have to clarify that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o you five L.R. books pertaining to the period 97-98 and 98-99 (sr. no. 1001 to 1250) upto 1-6-99. It can be seen from the said L.Rs that more that 50 (fifty) M.T. of Scented Tabacco were transported to Indore parties from Ms. Suresh Enterprises. On being asked about take deliveries at Indore, I have to state that in such cases persons from Ms. R.S. Company or Ms. R.S. industries as the case may be used to contact over Telephone to our office making equerries about the consignment supposed to have been delivered at their factory. Some times in such cases persons from Ms. Suresh Enterprises or Shri Suresh Jajra used to contact over Telephone or in person enquiring about their consignment delayed in transit and its where about. As per my knowledge the goods viz. Scented Tabacco belonging to Ms. Suresh Enterprises are being supplied to units manufacturing GUTKA known in market in various Brands. On being asked about the last consignment of M/s. Suresh Enterprises Transported through Sarika Roadways, I have to shake that after March 99, M/s. Suresh Enterprises have stopped booking their consignment to Indore because of strained relationship with us. On being asked about the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Section 106, Evidence Act, the burden to establish those facts is cast on, the person concerned; and if he fails to establish or explain those facts, an adverse inference of facts may arise against him, which coupled with the presumptive evidence adduced by the prosecution or: the Department would rebut the initial presumption of innocence in favour of that person, and in the result prove him guilty. As pointed out by Best in 'Law of Evidence', (12th Edn. Article 320, page 291), the Presumption of innocence is, no doubt, presumption juris; but every day's practice shows that it may be successfully encountered by the presumption of guilt arising from the recent (unexplained) possession of stolen property , though the latter is only a presumption of fact. Thus the burden on the prosecution or the Department may be considerably lightened even by such presumption of fact arising in their favour. However, this does not mean that the special or peculiar knowledge of the person proceeded against will relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of that fact in issue. It will only alleviate that burden to discharge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it will be for him to explain or establish those facts within his peculiar knowledge, failing which the prosecution will be entitled to take advantage of the presumption of fact arising against him, in discharging its burden of proof. 44. These fundamental principles, shorn of technicalities, as we have discussed earlier, apply only in a broad and pragmatic way to proceedings under Section 167(8) of the Act. The broad effect of the application of the basic principle underlying Section 106 Evidence Act to cases under Section 167(8) of the Act, is that the Department would be deemed. to have discharged its burden if it adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. Amba Lal's case was a case of no evidence. The oily circumstantial evidence viz., the conduct of Amba Lal in making conflicting statements, could not be taken into account because he was never given, an opportunity to explain the alleged discrepancies. The status of Amba Lal viz. that he was an immigrant from Pakistan and had come to India in 1947 before the customs barrier was raised- br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld show that there could no difficulty in holding that having regard to the admissions made by the appellant and his subsequent conduct, the onus would shift to the appellant to show that the gold found from him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of Sections 106 and 114 of the Evidence Act. The matter was considered at great length in the case of Berham Khurshed Pesikaka v. The State of Bombay(1) where this Court holding that Section 106 could not be construed to place the onus on the accused to prove the prosecution case, observed as follows :- Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle v. The King-A.I.R. 1936 P.C. 169, also In re: Kanakasabai Pillai-A. I. R. 1940 Madras 1). It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by section 106 of the Evidence Act. These observations were made with respect to the peculiar facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the Revenue, adverse inference could be drawn against the assessee if he failed to put before the Department material which was in his exclusive possession. The process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. It is true that case arose under the provisions of the income Tax Act but the principles laid down by this Court would apply equally to the facts of the present case. In the case of Collector of Customs, Madras Ors. v. D.Bhoormull a case under the Customs Act, while dwelling on the nature and purport of the onus which lay on the prosecution, this Court observed as follows:- It cannot be disputed that in proceeding for imposing penalties under clause (8) of s. 167 to which s. 178-A 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 cost by it, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the accused's guilty knowledge. A reference to Issardas Daulat Ram Ors. v. Union of India Ors. [(1962) Supp. (1) S.C.R. 358] is enough to show that the conduct of the accused and the incredible version set up by him were enough to saddle the accused with the necessary knowledge of the character of the goods found in his possession. Atleast, the burden of proving an innocent receipt of gold lay upon the appellant under section 106 Evidence Act. The totality of facts proved was enough, in our opinion, to raise a presumption under section 114 Evidence Act that the gold had been illegally imported into the country so as to (be) covered by section 111(d) of the Act. The appellant had not offered any other reasonable explanation of the manner in which it was being carried. The facts in this case appear to be very similar to the facts in the present case. Furthermore, the case of Balumal Jamnadas Batra v. State of Maharashtra was also a case under the Customs Act and there also the presumption under section 123 was not applicable. It was held therein that having regard to the conduct of the accused and nature of the articles mens rea was established. In this connection, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould bring 200 gold biscuits of foreign marking and conceal them in the compound of the appellant without appellant's knowledge for safe custody. It is not his case that he had facilitated PW-3 in concealing them in his compound. The place of concealment of the contraband is also significant at this juncture. It is just near and visible from the window of his bed-room through which he or family members could always watch anyone frequenting the place where the contraband was concealed. This fact becomes more relevant when we consider that after concealment of the contraband in the compound one would ensure that others having access to the compound may not indulge in digging and carrying away the same. As soon as the appellant and/or the members of his family had sight of such visitor or movement by others, they would immediately catch hold of such person or would charge them. Obviously, therefore, it would be the appellant who had concealed 200 gold biscuits of foreign marking in his compound at a place always visible from his bedroom window. Therefore, the High Court was right in its conclusion, though for different reasons, that Ex.P-4 is a voluntary statement and was not infl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the retracted confession from other evidence. The confession must be one implicating the accused in the crime. It is not necessary that each fact or circumstance contained in the confession is separately or independently corroborated. It is enough if it receives general corroboration. The burden is not as high as in the case of an approver or an accomplice in which case corroboration is required on material particulars of the prosecution case. Each case would, therefore, require to be examined in the light of the facts and circumstances in which the confession came to be made and whether or not it was voluntary and true. These require to be tested in the light of given set of facts. The high degree of proof and probative value is insisted in capital offences. 21. In Kashmira Singh's case the co-accused, Gurcharan singh made a confession, The question arose whether the confession could be relied upon to prove the prosecution case against the appellant kashmira Singh. In that context, Bose, J. speaking for bench of three Judges laid down the law that the Court requires to marshall the evidence against the accused excluding the confession altogether from consideration. If t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the confessional statement. The Court is required to examine whether the confessional statement is voluntary; in other words, whether it was not obtained by threat, duress or promise. If the Court is satisfied from the evidence that it was voluntary, then it is required to examine whether the statement is true. If the Court on examination of the evidence finds that the retracted confession is true, that part of the inculpatory portion could be relied upon to base conviction. However, the prudence and practice require that Court would seek assurance getting corroboration from other evidence adduced by the prosecution. 32. It is true that in criminal law, as also in civil suits, the trial Court and the appellate Court should marshal the facts and reach conclusion, on facts. In a criminal case, the prosecution has to prove the guilt beyond doubt. The concept of benefit of doubt is not a charter for acquittal. Doubt of a doubting Thomas or of a weak mind is not the road to reach the result. If a Judge on objective evaluation of evidence and after applying relevant tests reaches a finding that the prosecution has not proved its case beyond reasonable doubt, then the accused is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o imprisonment for a period of 2 months and 1 months respectively which are directed to run consecutively. 35- In light of the aforesaid judgment delivered by the Hon'ble Supreme Court, the Tribunal based upon the evidence has rightly passed the impugned order and in respect of substantial question of law No.1, the answer is that there was sufficient evidence about the manufacture and removal of goods and the Department has rightly drawn inference about clandestine manufacture and removal. 36- In respect of substantial question No.2, the evidence discussed by this Court which has been relied upon by Tribunal, the Tribunal was justified to coming to conclusion that appellant was involved in clandestine manufacture of the goods and clearing of the same without payment of Excise Duty. 37- In respect of substantial question No.3, the receipt of raw material coupled with other evidence as discussed by this Court and by the Tribunal, the Tribunal was justified in holding that there was corresponding manufacture and clandestine clearance of Gutkha by the appellant. 38- The net result is appeals fails and is accordingly dismissed alongwith all the connected appeals. 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