TMI Blog2018 (11) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... dence to claim such retraction. Further from the adjudication order and the reply to show cause notice also it is evident that the appellants have never retracted their statements either in part or toto. In view of the evidences that have be produced and recovered during the course of investigation, along with the own admissions of the Director in the unit and the other conoticees, the Appellants contentions cannot be agreed with, that the charges made against them are based on presumptions and assumptions. On the contrary there is sufficient evidence to establish the charges against them - The reliance placed by the appellant on certain decisions of this tribunal in their appeal, cannot help their case because in the case of clandestine clearance the evidences recovered need to be examined in the fact of each case and it has to be shown that the ratio of the said judgment applicable to the facts/ evidences in the case under consideration - In absence of any such attempt on the part of the counsel to establish how those case are relevant for approving or disapproving the evidences in the present case mere citing of the decision will not advance the case of the appellants in matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 002. vi. As the goods are held liable for confiscation, hence, I impose a penalty of ₹ 5,00,000/- (Rupees Five Lakhs only) on Shri Sanjay Mittal, Prop M/s Balaji Steels, Mumbai, Director M/s Air Carrying Corporation (I) Pvt Ltd under the provisions of Rule 26 of the Central Excise Rules, 2002. vii. As the goods are held liable for confiscation, hence, I impose a penalty of ₹ 5,00,000/- (Rupees Five Lakhs only) on Shri Ghanshyam Pandey, Prop of M/s Anand Transport, and authorized signatory of M/s Alok Transport, under the provisions of Rule 26 of the Central Excise Rules, 2002. 2.1 Acting on the intelligence that Shri Sanjay Mittal, Broker of Iron and Steel products and Proprietor M/s Balaji Steel was involved in facilitating the clandestine clearances of CTD Bars without payment of Central Excise Duty by manufacturers, his premises was searched on 24.03.2005, and certain incriminating documents were recovered and resumed. 2.2 In his statement recorded on 25.03.2005, Shri Sanjay Mittal stated that the entries made in the two notebooks (Sl No A-7 A-8) are in respect of those transactions/ saudas brokered by him from various suppliers which were in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh and also that they did not received any documents against the said purchases. 2.6. In his statement recorded on 02.04.2005, Shri Ghanshyam Pandey, the transporter working with Shri Sanjay Mittal, deposed - i. if the goods were transferred from outstation vehicles to his vehicles on the road, no documents were made for such trips but driver was asked to call on the telephone number given to him by Shri Sanjay Mittal, and deliver the goods as per the instructions of the person answering the call. ii. When the goods were loaded in hi vehicle from rolling mill then the person hiring the vehicle would give pink colour invoices and weigh bridge chits either in open condition or at times in sealed and gummed envelope. When the documents were given in sealed/ gummed envelope then the driver was also given a trading challan. In case were open invoice was given delivery was made at the address indicated on the invoice, and in case of the sealed/ gummed envelope delivery was made as per the trading challan. In case where the proper open invoice was used for transportation of the goods payments towards transportation were received by him in cheque and the record of such transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am Udyog Pvt Ltd [2003 (158) ELT 40 (T)] c. CCE Raipur Vs C M Re-Rollers Fabricators [2004 (168) ELT 506 (T)] d. Rama Shyam Paper Ltd. Vs CCE Lucknow [2004 (168) ELT 494 (T)] e. Meenambai Fire Works Ltd Anr vs CCE Madurai [2002 (49) RLT 832 (T)] f. Ghodavat Pan Masala Products Ltd Vs Commissioner [2004 (175) ELT 182 (T)] g. S T Texturiser vs CCE [2006 (200) ELT 234 (T)] ii. The principle of Cum duty price is applicable in this case. iii. No interest and penalty is sustainable as the demand itself cannot be sustained against them. 4.1 We have heard Ms Manali Dixit, Advocate for the Appellants and Shri Deepak S Chavan, Superintendent, Authorized representative for the revenue. 4.2 Arguing on the behalf of Appellants learned Counsel submitted:- i. Since the initiation of the proceedings and during the pendency of his appeal before this tribunal, Shri Ghanshyam Pandey on whom personal penalty of ₹ 5,00,000/- has been imposed has expired. She produced the death certificate of Shri Ghanshyam Pandey and stated that in such circumstances the proceedings against Shri Pandey should abate as will the appeal. ii. In respect of other two appeals she ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments evidencing the clandestine clearance of the goods by various units were recovered. Entries in certain private records maintained by Shri Sanjay Mittal, proprietor of M/s Balaji Steel became the basis for proceeding against the Air Carrying Corporation. In number of decisions this tribunal has placed reliance on the decision of Apex Court in case of Central Bureau Of Investigation vs V.C. Shukla Ors [(1998)3 S.C.C. 410] (popularly known as Jain Hawala Diaries Case), to hold that the case of clandestine clearance cannot be based on the private diaries/ recovered from the co-conspirators. However said decisions have failed to appreciate the fact, in this decision Supreme Court has not discarded such diaries/ documents as an admissible piece of evidence under the Evidence Act, but has laid down the test to determine the manner in which the said documents need to be examined in conjunction with other evidences recovered during the investigations for purpose of establishing the case against the accused. The relevant para s of the said decision of Apex Court are reproduced below: The rationale behind admissibility of parties' books of account as evidence is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Vs. Subba Naicker [A. I. R. 1919 Madras 132] one of the learned judges constituting the Bench had this to say: S.34, Evidence Act, lays down that the entries in books of account, regularly kept in the course of business are relevant, but such a statement will not alone e be sufficient to charge any person with liability. That merely means that the plaintiff cannot obtain a decree by merely proving the existence of certain entries in his books of account even though those books are shown to be kept in the regular course of business. he will have to show further by some independent evidence that the entries represent real and honest transactions and that the moneys were paid in accordance with those entries. The legislature however does not require any particular form or kind of evidence in addition to entries in books of account, and I take it that any relevant fact s which can be treated as evidence within the meaning of the Evidence Act would be sufficient corroboration of the evidence furnished by entries in books of account if true. While concurring with the above observations the other learned Judge stated as under: If no other evidence besides the accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above principles, even if we proceed on the assumption that the entries made in MR 71/91 are correct and the entries in the other books and loose sheets which we have already found to be not admissible in evidence under Section 34) are admissible under Section 9 of the Act to support an inference about the formers' correctness still those entries would not be sufficient to charge Shri Advani and Shri Shukla with the accusations leveled against them for there is not an iota of independent evidence in support thereof. In that view of the matter we need not discuss, delve into or decide upon the contention raised by Mr. Altaf Ahmed in this regard. Suffice it to say that the statements of the for witnesses, who have admitted receipts of the payments as shown against them in MR 71/91, can at best be proof of reliability of the entries so far they are concerned and not others. In other words, the statements of the above witnesses cannot be independent evidence under Section 34 as against the above two respondents. So far as Shri Advani is concerned Section 34 would not come in aid of the prosecution for another reason also. According to the prosecution case itself his name finds pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this court analysed the section as follows:- (1) There shall be a prima facie evidence affording a reasonable ground for a Court to believe that two or more persons are members of a conspiracy; (2) if the said condition is fulfilled, anything said, done or written by any one of them in reference to their common intention will be evidence against the other; (3) anything said, done or written by him should have been said, done or written by him after the intention was formed by any one of them; (4) it would also be relevant for the said purpose against another who entered the conspiracy whether it was said , done or written before the entered the conspiracy or after the left it' and (5) it can only be used against a co-conspirator and not in his favour. In the light of the above principles we may now consider the arguments canvassed by Mr. Altaf Ahmed to made the entries in the books and the enclose sheets admissible under the above section as relevant evidence. He submitted that the materials collected during investigation and placed on record clearly establish the existence of a general conspiracy amongst Jains to promote their economic interest by corrupting publ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e arranged by the broker as such we do not generally know the parties. On being asked as to how we receive the payment when we do not know the parties. I state that the payment is also received through Sanjay Mittal. On being asked, for the goods cleared on payment of duty who gives the brokerage to the broker for CTD bars. I state that in these deals we pay the brokerage to the broker. Now I have been shown a computer printout of transaction through Shri Sanjay Mittal appearing in his private records on which supplier/ seller is shown as ACC i.e. Air Carrying Corporation (I) P Ltd. I have gone through the statement in token thereof have put my dated signature on the same. I understand from the statement that the individual quantity shown in each entry as appearing in the private record reflect the clearance effected by us. On going through it I state that the quantity of 103.4 MT appearing in the first part of the printout has been cleared by us on payment of duty on dates shown against each entry. As regards the entries appearing in second part with vehicle no. shown as from record A-11, I state that these are representing clearances affected by us without payment of duty app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acc 10000 MRS6561 A-11 acc 10950 MHO4397 A-11 acc 11270 MH051079 A-11 acc 14310 MH04BU8855 A-11 acc 14470 MH04CA7110 A-11 acc 13530 MH04AC5791 A-11 acc 8220 MH04CA7109 A-11 acc 11390 MH04CA7110 A-11 acc 5310 MH026B7217 A-11 acc 12040 MH04H8938 A-11 acc 9200 MH04CA3222 A-11 acc 10550 MH195595 A-11 acc 12310 2784 A-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve conspired together. So far as Shri Advani is concerned, we find that no one has even spoke about him in their statements. Since the first requirement of Section 10 is not fulfilled the entries in the documents cannot be pressed into service under its latter part. 5.6 Thus applying the principle of law/ evidence laid down by the Apex Court in this case we have no hesitation in holding that the diaries and other private documents recovered from the premises of broker are admissible pieces of evidence to establish the case of clandestine clearance against the noticee. 5.7 Section 36A of the Central Excise Act, 1944 provides as follows: Presumption as to documents in certain cases. Where any document is produced by any person or has been seized from the custody or control of any person, in either case, under this Act or under any other law and such document is tendered by the prosecution in evidence against him or against him and any other person who is tried jointly with him, the Court shall, - (a) unless the contrary is proved by such person, presume - (i) the truth of the contents of such document; (ii) that the signature and every other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... By virtue of authority of law, the officer exercising the powers under the Act is an authority within the meaning of Section 24 of the Evidence Act. 18. Though the authority/officer on suspecting a person of (1) having committed the crime under the Act can record his statement, such a person per force is not a person accused under the Act. (2) He becomes accused of the offence under the Act only when a [complaint] is laid by the competent Customs Officer in the Court of competent jurisdiction or Magistrate to take cognizance of the offence and summons are issued. Thereafter, he becomes a person accused a statement recorded or given by the person suspected of of the offence. (3) having committed an offence during the inquiry under Section 108 of the Act or during confiscation proceedings is not a person accused of the offence within the meaning of Section 24 of the Evidence Act. (4) Though the Customs Officer is an authority within the meaning of Section 24 of the Evidence Act, by reason of statutory compulsion of recording the statement or the accused giving voluntary statement pursuant to his appearing either after issuance of summons or after the appellant s surrender, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 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 bed-room 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 influenced by threat, duress or inducement etc. Therefore, it is a voluntary statement given by the appellant and is a true one. 26. In Naresh J. Sukhawani v. Union of India - 1996 (83) E.L.T. 258 (S.C.) = 1995 Supp. 4 SCC 663 a two- Judge Bench [to which one of us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... volved. Generally, the evidence in support of the violation of the provisions of the Act consists in the statement given or recorded under Section 108, the recovery panchnama (mediator s report) and the oral evidence of the witnesses in proof of recovery and in connection therewith. This Court, therefore, in evaluating the evidence for proof of the offences committed under the Act has consistently been adopting the consideration in the light of the object which the Act seeks to achieve. 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 entitled to the benefit of doubt for acquittal. The question then is: whether the learned Single Judge of the High Court has committ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them. The reliance placed by the appellant on certain decisions of this tribunal in their appeal, cannot help their case because in the case of clandestine clearance the evidences recovered need to be examined in the fact of each case and it has to be shown that the ratio of the said judgment applicable to the facts/ evidences in the case under consideration. In absence of any such attempt on the part of the counsel to establish how those case are relevant for approving or disapproving the evidences in the present case mere citing of the decision will not advance the case of the appellants in matters of clandestine clearance which are fact and evidence based. 6.1 Larger bench of this tribunal has in case Gopal Industries Ltd [2007 (214) ELT 19 (T-LB) in similar circumstances have held as follows: 18. It is not in dispute that two note books being private record, namely, daily report tin factory and Daily production report were seized from the factory premises of the appellant on 1-8-1998 under a panchnama in the presence of the authorized signatory of the appellant and two panch witnesses. The authenticity of these two note-books is not disputed, but a contention is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant premises on 1-9-1998 were maintained by the appellant and that the record, namely, the daily production reports, challans etc. were pertaining to the clandestine production and removal of tin containers without payment of duty. We have perused copies of these two note-books containing the private record and we find that there were signatures of Awadesh Kumar Saxena, Electronics Engineer at various places. The daily report showed particulars of the opening stock, production and the closing stock of the said excisable goods. Admittedly, the production of the tin containers, which was recorded in these daily record books and which were removed, did not appear in the statutory record i.e. RG. 1 register of the appellant. This not a case where mere private record without anything more is relied upon. The private record was recovered from the factory of the appellant, and it is established beyond doubt and not even disputed that it was so recovered and that it belonged to the appellant. The nature of particulars contained in this private record clearly go to show their intrinsic authenticity about the clandestine production and removal of the excisable goods by the appellants who had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and removal of tin containers by the appellant. It is evident that Shri Yogesh Garg, noticee No. (2), partner of the appellant, was in charge of the unit and was having overall control of the affairs of the unit. It was, therefore, rightly held that he was aware that the goods clandestinely manufactured and removed in the name of his partnership firm were liable to be confiscated. 6.2 Hon ble Apex Court has in case of D Bhurmall [1983 (13) ELT 1546 (SC)] laid down the law of evidence in cases of smuggling of goods. The relevant excerpts from the said decision are reproduced below: 31. The other cardinal principle having an important bearing on the incidence of burden of proof is that sufficiency and weight of the evidence is to be considered to use the words of Lord Mansfield in Blatch v. Archar (1774) 1 Cowp. 63 at p. 65 According to the Proof which it was in the power of one side to prove and in the power of the other to have contradicted . Since it is exceedingly difficult, if not absolutely impossible for the prosecution to prove facts which are especially within the knowledge of the opponent or the accused, it is not obliged to prove them as part of its prim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licit importation or exportation. It is enough if the Department furnishes prima facie proof of the goods being smuggled stocks. In the case of the latter penalty, the Department has to prove further that the person proceeded against was concerned in the smuggling. 43. If we maysay so with great respect, it is not proper to read into the above observations more than what the context and the peculiar facts of that case demanded. While it is true that in criminal trials to which the Evidence Act, in terms, applies, this section is not intended to relieve the prosecution of the initial burden which lies on it to prove the positive, facts of its own case, it can be said by way of generalisation that the effect of the material facts being exclusively or especially within the knowledge of the accused, is that it may proportionately with the gravity or the relative triviality of the issues at stake, in some special type of cases, lighten the burden of proof resting on the prosecution. For instance, once it is shown that the accused was travelling without a ticket, a prima facie case against him is proved. If he once had such a ticket and lost it, it will be for him to prove this fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Tribunal), Krishna Co. v. Collector of Central Excise, Jaipur reported in 1998 (97) E.L.T. 74 (Tribunal), Gurpreet Rubber Industries v. Collector of C. Ex., Chandigarh reported in 1996 (82) E.L.T. 347 (Tribunal), Metal Fitting (P) Ltd. v. Collector of Central Excise, Delhi reported in 1997 (93) E.L.T. 747 (Tribunal), Commissioner of Central Excise, Chandigarh v. Dashmesh Castings (P) Ltd. reported in 2000 (40) RLT 1077 (CEGAT), M/s. Raj Sandeep Co. v. CCE, Chandigarh reported in 1999 (31) RLT 324 = 2003 (162) E.L.T. 1028 (Tribunal), Kothari Pouches Ltd. Anr. v. Commissioner of Central Excise, New Delhi reported in 2000 (41) RLT 209 (CEGAT) = 2001 (135) E.L.T. 531 (Tribunal), Chariot Cement Co. v. CCE reported in 2003 (110) ECR 205 (Tribunal) = 2003 (161) E.L.T. 598 (Tribunal) and Durga Trading Co. Ors. v. CCE reported in 2003 (59) RLT 273 (CEGAT-Del.) = 2002 (148) E.L.T. 967 (Tribunal). 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 cases of Collector of Customs, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproached the Tribunal. The Court noted that the Tribunal extensively dealt with the entire factual matrices presented before it and rightly concluded that in case of clandestine removal of excess goods, there needs to be positive evidence for establishing the evasion. 20. It is further held that in the absence of any material reflecting the purchase of excessive raw material, shortage of finished goods, excess consumption of power like electricity, seizure of case, etc., the Tribunal held that there was nothing except a bare confessional statement, which was retracted immediately. Thus, the Court confirmed the order passed by the Tribunal holding that the appeal does not raise any question of law, much less substantial question of law. The appeal filed by the Revenue against the said order was dismissed by the Hon'ble Supreme Court reported in 2015 (319) E.L.T. A117 (SC). 21. We find from the said order, the appeal filed by the Revenue was filed with the delay and the delay was condoned and the Special Leave Petition was dismissed without a speaking order. In any event, in the said case, the Court held that the Tribunal made a thorough factual exercise and then cam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this aspect, the Adjudicating Authority referred to the details of production and clearance and pointed out the differences when compared to the diary notings containing daily production report and the RG1 as well as clearances. The differences were pointed out. After taking note of the reply given by the assessee as well as the judicial precedents relied thereupon, the Adjudicating Authority held that the assessee has not questioned the facts of the case. The Managing Director accepted the statement given by the factory Manager as true and correct. The retraction was an afterthought and no request was made by the Managing Director to record a further statement from him, apart from not denying the details mentioned in the statement given by the factory Manager. That apart, there was no denial of the allegation in respect of the production or clearances in the assessee's RG1 register, purchases of cotton made by the assessee, which were not accounted for in their Form IV register. Further, the assessee submitted no reply for the shortage of cotton to the tune of 129585.5 kgs while submitting their reply. Further, the Adjudicating Authority pointed out that a stock of 2295 kgs o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oices have come into existence goes to show that the owner of the property or the person in whose possession the factory is there ought to have explained the existence of the same. After considering all the grounds raised by the assessee, the appeal was dismissed. 29. On further appeal to the Tribunal, we find that the Tribunal also took note of the submissions made by the assessee both factually as well as on legal aspects and has rendered independent findings as to why the order passed by the First Appellate Authority should be confirmed. Even before the Tribunal, the assessee did not have any explanation for the discrepancies in the quantity or for the matter with regard to the existence of parallel invoices. Thus, on facts, it was held that it is a case of clandestine removal and accordingly, the appeal filed by the assessee was dismissed. 30. The above facts will clearly show that the allegation is one of clandestine removal. It may be true that the burden of proving such an allegation is on the Department. However, clandestine removal with an intention to evade payment of duty is always done in a secrete manner and not as an open transaction for the Department to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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