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TMI Blog2018 (5) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... that M/s PZF clandestinely cleared the final products without payment of duty, investigated into the allegation by carrying-out search operations at the following premises on 14-15/09/2010, after intercepting a truck coming out of the factory premises: i) M/s Prabhat Zarda Factory (Co.), B-117-118, GT Karnal Road Indl. Area, Delhi-33 ii) M/s Prabhat Zarda Factory (Co.), B-113, Indus trial Area, GTK Rd, Delhi iii) Godown premises located at Basement of E-46, Shastri Nagar, Delhi iv) Godown of M/s Balaji Trading Co. A-908, Shastri Nagar, Delhi v) Residential premises of Partners of M/s Prabhat Zarda Factory (Co.) located at A-194, Derawal Nagar, Delhi vi) M/s Pooja Agencies, 284-85, Katra Peran, Tilak Bazar, Khari Baoli, Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orroborated by that of Shri Kedar Mehrotra, GM of M/s PZF and his statement was not retracted. 4. After conclusion of investigation, SCN dated 08.03.2011 was issued to the assessee as well as other connected parties. On completion of the adjudication proceedings, the impugned order was passed in which the adjudicating authority confiscated the finished goods seized from the various premises. Option was given to redeem the same on payment of redemption fine of Rs. 30 lakhs. Central Excise duty amounting to Rs. 52,99,602/- was demanded on the goods clandestinely cleared. Penalties were also levied on various per sons connected with M/s PZF as also on the buyer, the packing material seized was also ordered for confiscation. 5. Aggrieved by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y evidence on record linking the goods to the appellant's factory. (iv) In addition to "Ratna" brand goods, the Revenue also found goods with brands belonging to others in the premises of buyers. (v) Inculpatory statement given by Purushottam Arya, Managing Partner of M/s PZF has been retracted and cannot be taken cognizance in the present proceeding. (vi) The Hon'ble Commissioner, while passing the impugned order, has not considered the procedure laid down in Section 9D of the Central Excise Act which is mandatory as has been held by a series of decisions of the Hon'ble High Court of P&H. (vii) Finally, he submitted that the Revenue has not produced any evidence to support the charge of clandestine manufacture and clearance by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious persons will be a corollary to the above questions. 12. Admittedly, no documents have been produced evidencing the licit nature of the seized goods. Consequently, the goods are liable for confiscation and the order of confiscation by the lower authority cannot be faulted. But the option of redeeming the same on payment of redemption fine, as ordered by the lower authority, will be available only to the person who is the owner of such goods. 13. From the record of the case, we note that the Revenue has not brought any evidence on record regarding clandestine manufacture and clearance of the goods from the factory. No investigation appears to have been done in respect of procurement of raw materials or even the actual manufacture. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issibility to oral evidence they would, even otherwise, have to be recorded as mandatory. "18. The rationale behind the above precaution contained in cause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the Gazetted Central Excise Officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudicating authority, as, in such an atmos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by various judicial authorities in this regard, including the principles of natural justice, in the following manner: (i) In the event that the Revenue intends to rely on any of the statements, recorded under Section 14 of the Act and referred to in the Show Cause Notices issued to Ambika and Jay Ambey, it would be incumbent on the Revenue to apply to Respondent No.2 to summon makers of the said statements, so that the Revenue would examine them in chief, before the adjudicating authority, i.e., before Respondent No.2. (ii) A copy of the said record of examination-in-chief, by the Revenue, of the makers of any of the statements on which the Revenue chooses to rely, would have to be made available to the assessee, i.e., to Ambika and J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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