TMI Blog2019 (1) TMI 909X X X X Extracts X X X X X X X X Extracts X X X X ..... drive are not substantiated. Among the date contained in the seized pen drive, there were estimates, sales register (month-wise), purchased register of chemicals, purchased register of RP and cash book etc. Evidences were available about the purchase of chemicals from M/s. Plastic Industries, Mumbai and M/s. Pinks Enterprises, Allwaye etc. It has been established that the appellants have been purchasing RP (recycled plastic) from their sister concerns, Karothukuzhy Plastics and Karothukuzy Plastic Industries and others like A to Z Traders and Marketing etc. The same was confirmed by Smt. Aswathy, Office Assistant of the appellants - it is incorrect to say that the Department has not established clandestine manufacture. It cannot be expected that all evidence will be contained in the records seized as the records are likely to be destroyed in all probability particularly in the case of clandestine manufacture and removal. Seizure of “Periyar” brand of plastic chairs and stools from M/s. Green Fair Marketing on 16.01.2006 is one of the clear evidences for clandestine manufacture and clearance. Therefore, in view of the facts of the case, it is found that Department has establi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y that somebody told him that the pen drive was taken from the dustbin. The revenue alleges that it was seized from a drawer at the office. But the witness does not know whether it was taken from the drawer. (iv). He cannot remember whether he was carrying a pen drive or the name of the pen drive. It is significant that the address given by him as his residence is actually the address of Mr. Santhakumar who was an officer of the Excise who was present when the search was carried out. He also states that the said Santhakumar was one of the persons who conducted the raid and had asked him to come to appellant s factory to be present as a witness at the time of the raid. It is relevant to note that Santhakumar asked the witness to travel from Trichur to the factory a distance of 40-50 km when the search party could have picked up anybody else as a witness like the second witness. 2.2. The appellants have always maintained that they were doing job works previously for another company and the parting with them was not amicable and the entire search was done at the instigation of that company is active connivance with some officers of the Central Excise Department. The witness P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file. This is in contrast to the answer of Shri N.P. Gramaprohihit who stated that print outs were taken by the search officers in the presence of the two Mahazar witnesses and two employees of the company. The witness further could not recall the brand name of the pen drive and also states he was unaware whether any computers were seized. Shri Mr. S.A. Hariprakash stated that the statement in the Mahazar was typed by one of the Officers as narrated by the witness. In answer to question 48 the witness instead stated that he did not know who prepared the statements, the statements was prepared and then read over to him. In answer to the next question he categorically stated that the statements were prepared not as per his direction but the Inspector prepared. The Mahazar was prepared in English but on being asked whether the witness could read English he stated he could read. Three words from the Mahazar were put to the witness to ascertain their meaning and he replied that Moulding meant covering , Provisions meant job and he did not know the meaning of incriminating . 2.5. Ld. Counsel submitted that more interesting was the case of the other Mahazar witness. The departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey are innocent without adducing any evidence; the appellant has only questioned the validity of Search and Seizure on flimsy ground; The case is built up not only on the Pen Drive . Three CPU- Hard Disks seized, Production Slips, Other Records in KKP etc, statements were recorded from the concerned, corroborate the conclusions. (ii). Appellants dis-own the Pen Drive and its Printout thereof; they are not able to explain most of the entries found in their private records and that they have no explanation for the corroborative statements of their Dealers Drivers. The Ownership of the Pen Drive and Printout thereof are established with concrete documentary evidences with mutually supported corroborated statements. (iii). 3 CPU-Hard Disks seized are not questioned by the appellant. Hence the Printouts of the data in the Hard Disks are used to co- create other data of the appellant despite the destruction of Actual Price Documents by the appellant. Other Private records recovered and seized in residential/factory premises of the appellant, sister units dealers which are used to link the unaccounted transactions of the appellant. (iii). Unaccounted Chairs and Stools ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d was arranged by one Shri Shanthakumar Rebuttal : No Enmity between Shanthakumar M/s KKP and between the Witness and M/s KKP was alleged. Further there is no legal bar that Witness should reside in his permanent Native Address. 3.2.2. Contention : witness was unable to say whether the Office was visible from outside the factory Rebuttal : Irrelevant. 3.2.3. Contention : he did not see any women employees Rebuttal : Incorrect. In response to Q.18 of Cross Examination; he replied that there was one woman employee. 3.2.4. Contention : witness could not read the word Narrated ; could not read the News Paper and that he gave wrong answers for three words found in the Mahazar. Rebuttal : if the Witness is Capable to understand perceive the facts of Search and Seizure and able to narrate the same, there is no bar for him to be a Witness. 3.3.5. Contention : he did not see the Pen Drive being seized somebody told that the Pen Drive was taken from the Dustbin. Rebuttal : When three or four officers are making search in the premises including Toilet, it is impracticable for the Panch Witness to follow the Officer like his shadow. If any Tiny Object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Contention: Shri Gram Purohit , who prepared the Mahazar, would state that at the time of Search, the officers went looking for two witnesses and they were found outside the factory premises. This is in direct contrast to the statement of Mr. Pradeep Kumar who would state that he was asked by Shri Shanthakumar to be a Witness to the raid. Rebuttal : No contradiction has been found. Even for the sake of argument, it is accepted that Shri Shathakuamr asked Sri Pradeep Kumar to be a Witness, none can rule out the possibility that Shri Shanthakumar might have also asked Sri Pradeep Kumar to stand outside the factory premises till the Search Officers found requested him to be a witness. Accordingly, Sri Pradeep Kumar might have been brought from outside the factory. So question of contradiction does not arise at all. However, Contradiction relating to witnesses from outside factory or inside factory will not discredit the recovery and seizure of the impugned Pen Drive . Moreover, Witness cannot be discarded on the grounds that discrepancies are found in the Deposition of Witness. He submitted that, the Hon ble Supreme Court in the case of Bharwada Bhoginbhai Hirjibhai vs S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nducted peacefully in an orderly manner without causing any damage to the person or property etc and attest the Mahazar. Moreover, the Managing Partner Sri KK Ibrahim confessed that the used the Pen Drive in their factory. The retraction of statement letter sent by him also is not having any substance or poof. Under the background, the question of Cross examination of Panch Witness is not required at all. As per Section 100(5) of CrPc, 1973, it is not imperative that the Search Witness should be called for their evidence. Further, the Hon'ble Supreme Court in the case of Surjeet Sing Chhabra V UOI in 1497(9) ELI 646 (SC) ruled that It is contended that the petitioner had retracted within six days from the confession. Therefore, he is entitled to cross-examine the panch witnesses before the authority takes a decision on proof of the offence. We find no force in this contention. The Customs officials are not police officers. The confession, though retracted, is an admission and binds the petitioner. So there is no need to call Panch witnesses for examination and cross examination by the petitioner. The Supreme Court in the case of Modan Singh v. State of Rajasthan, AIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the letter Z . It was 256MB. Both versions of the Sri Afsal clearly established that the Ownership of the Pen Drive lies with Sri Afsal. This fact of ownership was corroborated by Sri Aiju George, Hardware Engineer , who has deposed in his Statement dated 28.4.2006 that he had been attending computer related works in M/s K. K, Plastics, Karothukuzhy Plastics and residence of Sri Ibrahim and he had supplied one 256 Mb-ZION -brand Pen Drive , by purchasing from Skynet Computers, Perumbavoor, as required by him. 3.2.12. Contention : Sri Afsal stated on 155.2006, that he has lost the Pen Drive, whereas during the course of Cross Examination, he stated that he has handed over the Pen Drive to his friends. The Pen Drive owned by Sri Afsal was used for his Study purpose? Rebuttal : If the Pen Drive is handed over to his friends, on what basis, Sri Afsal stated that the Pen Drive is lost when the CEOs asked him to produce the Pen Drive. This contradictory stands itself clearly proved that Sri Afsal had ma/a fide intention to mislead the investigating and adjudicating authorities. He only tried to create a scene that the subject Pen Drive was not used in their Fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement dated 26.6.2006 has confirmed his involvement in the development of FAST software for Financial Accounting and Inventory; that software was supplied to Sri K. K. Ibrahim of M/s K. K. Plastics and that he knew that Sri Jinson/Dony were providing support of FAST software to many customers including Sri K.K. Ibrahim. It is pertinent to note here that Sri Aiju George, Sri. Jinson Thomas and Sri. S. K. Benilde have not retracted their statements. Further, they have not made any contradictions to their statements during the course of Cross Examination also 3.3. The Ld. Commissioner AR submitted that the GEQD, Hyderabad, after conducting due forensic analysis, sent Supplementary Report dated 11.7.2006 (Marked as Annexure C-56) confirming that the files and folders available in the suspected Digital Storage Media marked Q4 (Seized Pen Drive) is also available in the suspected Digital evidence storage media marked as Qi Q3 (-Seized Hard Disks of KK Plastics). 3.3.1. The Computer Hard Disks seized were not disowned by the Appellant. Hence they are the owners of the files and folders available in the Hard Disks. The Adjudicating Authority in para 94.36 (page SI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 55] A.C. 197 the Privy Council laid down that if the evidence is admissible, the Court is not concerned how it was obtained. The Privy Council has observed as follows (p. 203): In their Lordships' opinion the last to be applied in considering whether evidence is admissible is whether it is relevant to the matters in issue. If it is, it is admissible and the Court is not concerned with how the evidence was obtained. While this proposition may not have been stated in so many words in any English case there are decisions which support it, and in their Lordships' opinion it is plainly right in principle. These observations of the Privy Council were quoted with approval by the Supreme Court in Pooran Mal v. Director of Inspection [1974 AIR 348]. After quoting the above observations of the Privy Council, the Supreme Court has observed as follows (p. 366): ...It would thus be seen that in India, as in English, where the test of admissibility of evidence lies in relevancy, unless there is an express or necessarily implied prohibition in the Constitution or other law, evidence obtained as a result of illegal search or seizure is not liable to be shut out. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ress and tension created by your Officers is reflected in the signature in the statement which greatly differs from his usual signature . 3.4.1. Ld. Commissioner AR submitted that the ratio of the following three rulings pronounced by Hon'ble Supreme Court need to be taken into account. (i). The Hon ble Supreme Court in the case of Percy Rustomji Basta V State of Maharashtra 1983(13) ELT 1443(SC) held in para 24 as follows: The mere fact that the customs officer who recorded the statement explained the provisions of Section 193 of the Indian Penal Code and informed the appellant that he was bound to tell the truth and that he was liable to be prosecuted if he made a false statement, cannot be treated to be a threat and Section 24 of the Evidence Act has no application. [para 24] (ii). Further, the Hon ble Supreme Court, in the case of K.I. Pavunny V AC 1997(90) ELT 241(SC) while observing that the white Collar crimes are committed under absolute secrecy , dealt with various case laws in appreciating retraction of confession statement especially in para 20, it is held that Burden is on the accused to prove that the statement of obtained by threat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in English from Sri K. K. Ibrahim through his son. Sri K. K. Ibrahim on 20.2.2006 stated that the retraction letter has been withdrawn after consulting an advocate. Again on 03.5.2006 , Sri K. K. Ibrahim stated that he got legal advice to retract the statement. Thus, these statements clearly revealed that Sri Ibrahim is compelled only by his Advocate to send Retraction letter. Further, in his statement dated 20.2.2006, for Question No:15 regarding file containing the Sheets of Estimates, Sri KK Ibrahim stated that he does not understand what those ESTIMATES are. But Estimate No: 000445 dated 22.01.2006 [Annex-C2] was seized from his residence. Another Estimate NO: 000292 dated 13.10.2005 [Annex-C3] was seized from his Dealer M/s Green fair Marketing. These Estimates were reflecting in the Estimates retrieved from Pen Drive by Computer Forensic Division, GEQD, Hyderabad. These Documentary evidences proved credibility of Sri KK Ibrahim. In this background, in the instant case, the retraction has been made in usual mechanical manner, by alleging that the appellants were compelled and forced to write on the papers as per the choice of the officers. The Appellant have not put ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... An attempt was made to contest the admissibility of the said statements in evidence. It is well settled that statements recorded under Section 108 of the Customs Act are admissible in evidence vide Ramesh Chandra v. State of West Bengal, AIR 1970 S.C. 940 and K.I. Pavunny v. Assistant Collector (H.Q.), Central Excise Collectorate, Cochin, 1997 (90) E.L.T. 241 (S.C.) . Hence, in the instant case also, Statements recorded under Section 14 of Central Excise Act, 1944, when found to be voluntary and not vitiated in any manner, admissible in evidence (iii). Jethmal V UOI 1999(110) ELT 379 (SC) Before us a faint argument was made that the statements of the two Mohammads or Ghulam Rasool were inadmissible in evidence as having been made before a police officer. In our view there is no substance in this point because the statements were recorded by a Customs Officer duly investigating into a case where allegations were made about the smuggling of gold. At that stage no criminal case had been started against them in respect of such smuggling and it is difficult to see how such statements can be said to be inadmissible in evidence. The question as to admissibility of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in aid. 3.5. Ld Commissioner, AR submitted with regard to the appreciation of Other Evidences that the officers have seized not only the impugned Zion Branded Pen Drive , but also seized 3 CPU-Hard Disks(factory and Residence), Other Private records found in the factory of KK Plastics Sister Concerns, Residential premises of Partners of the Units, Beverly Agencies Green Fair Marketing in addition to un accounted Plastic Moulded Chairs and stools found in M/s K. K. Plastics and Beverly Agencies and Green Fair Marketing. The Appellant has not disputed the recovery and seizure of Three Hard Disks and other Private records sized as referred above. Instead, they only pointed out few discrepancies in the entries found on their Private Records with the entries reflected in the Printouts. These private documents the Print outs are discussed by the Original Adjudicating Authority in detail in the 0I0 Para 94.42 to 94.79. 3.5.1. The Appellant claimed that there are discrepancies in almost 5 of the entries in the returned Hard Disks. Hence, the Print Outs taken from the Hard Disks should not be relied upon. GEQD, Hyderabad is a Government Organization. There is no m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explained the modus operandi adopted by him that they were showing Sale Price of the Chair as ₹ 70/- per Chair, whereas Sales were actually sold by them around ₹ 150/-per Chair, allowing separately a discount of ₹ 10/- per chair. The amount over and above invoice value were collected in cash only and not accounted in their books of accounts. All the 12 Dealers/Distributers/Buyers (Para 94.81 of 0I0) have admitted that the Sale Value of ₹ 70/- per chair shown in the Sales Invoice was not actual rate and they had actually paid ₹ 135/- ₹ 140 per Chair as per the Estimate Slips and had actually paid the extra value was given in cash to the Driver of the company vehicle in which goods are delivered. None have retracted on their own at the earliest opportunity. During the course of Cross examination Sri Pradeep Kumar, Sri K. V. Bhaskaran, Shri Bashith etc have stood by their own statements. Few others contradicted versions referring recycled plastics etc are rejected as after thought to help KK Plastics. The Commissioner established the Contravention by narrating the details in Paras 94.80 to 94.89 in detail. 3.8. Ld. Commissioner, AR s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Order Book No.12 seized from the factory), and other Billing particulars, Sales Register Data of the Pen Drive. 3.8.3. Ld. Commissioner, AR submitted that the appellants were Destroying /Not Keeping of the Documentary Evidences of Estimates. Shri KK Ibrahim admitted and explained the modus operandi of this offense, he, inter al/a, stated in his statement dated 24.1.2006 as the goods are dispatched from the factory directly to the dealers/distributers; at the time of dispatch of goods from the factory we are generating a Slip containing the details of goods dispatched and the actual sale value of the goods; such Slips are generated by using the Computer and the Slips are having the heading Estimate ; the files seized by contain many such Estimates prepared by them in respect of sale of goods by M/s K. K. Plastics; at the time of dispatch of goods from the factory they are also generating Invoices but the same were mostly taken back and destroyed after delivery of the goods to the Customers; in such cases the transactions are not accounted in books; for their reference, they were entering the details of the actual Sales made in the Pen Drive seized. The other Dealers/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant has maintained improper documents with false figures in order to evade statutory levies. Accordingly, the appellant have paid the statutory levy of Sales Tax for lesser Values accounted, on the basis of concerned undervalued documents. Whereas for their reference, they are storing the actual data in the Electronic Devices viz Computer Pen Drive. It is evident that the Appellant has accounted 4% KVAT to the Government Authorities whereas actually they collected illegally KVAT 12.5% from many Dealers which is stored in their Computer. This is clearly proved with documentary evidences of their own CREDT BILL No:23 dated 652005(Marked as C29) and TAX Invoice No: 23 dated 652005(Marked as C30 ) in which for the for the 800 Quantity of Chairs valued as ₹ 56000/- and collected ₹ 7000/- in the name of KVAT @ 12.5% from their Dealer M/s Green fair Marketing. Whereas for the Credit Bill No: 27 dated 21.05.2005 the Appellant collected KVAT 4% only. Further, when entries of huge volume of transaction pertaining to Sales, Purchases of various Raw Materials accounted in private records and accounted in Digital media are co-related along with various statements recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntained in the Private Records clearly go to show their intrinsic authenticity about the clandestine production and removal of the excisable goods by the appellants who had obtained the excise Registration for the manufacture of such goods in the firm name. When the production and removal of excisable goods in a clandestine manner is established by such documentary evidence and the oral evidence of the Managing partner and the supervisor, it cannot be said that the Commissioner committed any error in holding that the appellant has manufactured and cleared tin containers in a clandestine manner. The quantum of liability which is worked out, has not been disputed before us. We find ourselves in complete agreement with the reasoning and findings of the learned Commissioner in holding that the charge of clandestine removal of tin containers by the appellants was established beyond doubt. No further corroboration is required in view of the clinching nature of the oral and documentary evidence establishing clandestine production and removal of tin container by the appellants . 4. Heard both sides and perused the records of the case. It is seen that the counsel for appellants has veh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LT A4159 (SC). (iii) Pan Parag India Ltd. Vs. CCE, Kanpur, 2013 (291) E.L.T. 81 (Tri. - Del.) And submitted that clinching evidence is required of purchase of raw material, use f extra electricity, sale of final products, clandestine removal, transportation, payment, realization of sale proceeds, made and flow back of fund. 5. We find that Ld. Commissioner AR has rebutted the argument of the appellants point wise citing a catena of judgments to support his contentions. Whereas the appellant s arguments were on the issue of correctness of the Mahazar, dependability of Mahazar witnesses and maintainability of evidence, Commissioner has dealt elaborately on each of the issues raised in the SCN and OIO. He has established as seen above by citing relevant cases the following: (i) Evidence obtained under illegal search could still be admitted in evidence and merely because the witness was not from the same locality, his evidence cannot be rejected. (ii) Much importance cannot be attached to minor discrepancies which do not go to the root of the matter and shake the basic version of the witness. There may be discrepancies due to the normal errors of observation, mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Supreme Court has observed in the case of CC Vs. Bhoormall (supra) that: But in appreciating its scope and the nature of the onus cast by it, we must pay due regard to other kindred principles, no less fundamental, or universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree; for, in all human affairs absolute certainty is a myth, and as Prof. Brett felicitously puts it- all exactness is a fake . El Dorado of absolute Proof being unattainable, the law, accepts for it, probability as a working substitute in this work-a-day world. The law does not require the prosecution to prove the impossible. All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. Thus legal proof is not necessarily perfect proof often it is nothing more than a prudent man s estimate as to the probabilities of the case. 6.1. We also find that Hon ble Supreme Court in the case of Ramachandra Rexins Pvt. Ltd. v. Commissioner - 2014 (302) E.L.T. A61 (S.C.)] held that: Tribunal fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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