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TMI Blog2019 (7) TMI 1709X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Section 35G of the Central Excise Act, 1944, as given below : "(A) Whether the appellant had manufactured and cleared 1580.950 MT of sponge iron without payment of excise duty in clandestine manner? (B) Whether the appellant can be held liable under the relevant provisions of the Central Excise Act, 1944 for clandestinely removing the goods without payment of excise duty, just on the basis of circumstantial evidence? (C) Whether in absence of any corroborative evidence the liability along with penalty can be imposed upon the appellant for clandestinely removing the goods without the payment of excise duty?" 3. Later, on observing that it might not constitute substantial questions of law, permission was sought for to get it amended which prayer was granted. Pursuant to this, the following questions have been suggested as involving substantial questions of law : "(A) Whether Tribunal is correct in confirming demand of excise duty on clandestine removal of goods without corroborative evidence relating to such clearances without following the law laid down in this regard that charge of clandestine removal has to be evidenced bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect that there was a clandestine removal of 1574.725 MT of sponge iron and 81.010 MT of Dolochar. Based on the value of the goods, the Appellant/Assessee was slapped with a duty of Rs. 25,67,367/- with equal amount of penalty under Section 11AC of the Act, 1944 and interest under Section 11AB of the Act, 1944. The Adjudicating Officer arrived at a clear finding that the course of action and the modus operandi was with the knowledge of the Director of the Company and in the said circumstances, a penalty of Rs. 5,00,000/- was mulcted upon the Director. The above order was sought to be challenged by the Assessee-Company by filing statutory appeal before the competent authority i.e. the Commissioner (Appeals) who declined interference, in turn dismissing the appeal as per the order dated 28-4-2008. Met with the situation, a further appeal was preferred by the Appellant/Assessee before the Tribunal, who made a threadbare analysis of the facts and figures, the relevant provisions of law and the precedents and arrived at a finding that there was no scope for any interference. Dismissal of the appeal by the Tribunal made the Assessee to approach this Court by filing the appeal, as aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5,00,000/- upon the Director of the Appellant-Company. It is also an undisputed fact that the Director of the Company had conceded the liability to satisfy the duty and accordingly, the duty to an extent of Rs. 21,59,770/- with Education Cess of Rs. 43,195/- was remitted voluntarily, before adjudication. However, referring to the conscious design to defraud the Revenue by way of clandestine removal of the goods without raising invoices and suffering excise duty, it was held as with the knowledge and involvement of the Director and accordingly, he was inflicted with penalty of Rs. 5,00,000/- as mentioned above; which made the Director also to file an appeal (Appeal No. E/1651/2008) before the Tribunal. Both these appeals were considered together by the Tribunal and a common order was passed on 20-3-2015, whereby the appeal (E/1650/2008) preferred by the Appellant-Company was dismissed; whereas the appeal (E-1651/2008) preferred by the Director of the Appellant-Company was partly allowed, modifying the quantum of penalty by reducing it from Rs. 5,00,000/- to Rs. 1,00,000/-. It is stated that no further challenge has been raised by the Director. The matter has become final and the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of Accountant/Cashier of the Appellant-Assessee Company on 16-3-2007, who authenticated the photocopy of the ledger, adding that the entries therein were correct and were made by him. The statement given by the Director, by name Sanjay Agrawal, on 10-4-2007 was to the effect that the ledger book pertained to the sale of goods and the entries therein were correct and that he was ready to satisfy the duty on the goods which were cleared without invoices. The fact remains that the duty to the tune of Rs. 22,02,065/-, with Education Cess was cleared by him accordingly. These factual aspects have been specifically adverted to by the Tribunal in paragraph 2 of the order under challenge. 12. It is revealed from the order under challenge that the investigating team had conducted search in the office/business premise of the transporter M/s. Poorvanchal Road Carriers, Raipur and various bilty books were seized; besides recording a statement from an employee of the Transporter on 27-6-2007 revealing removal of 69.180 MT of sponge iron without issue of Central Excise invoices, as referred to by the Tribunal in paragraph 8 of the order. Similarly, scrutiny of the bilty books recovere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less satisfactorily, by the learned counsel for the Appellant before this Court. The Tribunal observed that the clandestine removal was well within the knowledge of the Shift Supervisors/Accountant/Director/Transporters and the Commission Agent/Brokers and that the evidence brought on record corelated with one another, establishing the inextricable link to evasion. It was accordingly held that the Revenue had discharged its onus of proving the allegation; whereas the Appellant/Assessee had miserably failed to discharge its burden of proof and that, it was not a case of some solitary evidence, but of multiple echoed evidence which demonstrated the oblique motive of the Appellant and proved its mala fides, in turn leading to dismissal of the appeal filed by the Assessee. 14. The above discussion clearly reveals that the finding rendered was not solely with reference to the contents of some 'loose sheets' recovered from the premises of the Assessee, but on the basis of other incriminating materials traced out and the statements given by different persons including the Director/Shift Supervisors/Accountant/Cashier/Transporters and the Brokers/Commission Agent, compared and analy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 4-10-2006. That apart, various other records including the records seized from the premises of the Assessee and from the Transporters/Brokers/Commission Agents, along with the statements taken from different persons/witnesses and also the Director of the Company (who finally agreed to satisfy the duty and effected the payment accordingly, before adjudication) clearly supported the case of the Revenue. It also remains a fact, that the penalty imposed upon the Director of the Appellant-Company (as reduced) is not challenged any further and this has attained finality. As such, the above verdict does not support the Assessee-Appellant in any manner. 17. Coming to the other case considered by the Division Bench of this Court (cited supra), it was a case where the liability was fixed by the Adjudicating Officer with reference to the clandestine removal of the goods which came to be interdicted by the Commissioner (Appeals), but restored by the Tribunal. Apart from the question relating to the bar of limitation (which is not involved herein), the substantial question of law considered by this Court was whether the procedure adopted by the Tribunal was contrary to Section 9D of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to have the mistake brought to the notice of the Authority/Tribunal concerned. It was with reference to the above vital fact/pleading, as to the element of 'duress/coercion', that the matter was examined by this Court in Hi Tech Abrasives Ltd. (supra) more so, when there was no other evidence, but for the entries in the 'note book'; in turn leading to the interference. This is more evident from the observations made in paragraph 9.5, with reference to the verdict passed by the Apex Court in Commissioner of Central Excise v. Kalvert Foods India Private Limited; 2011 (270) E.L.T. 643 (S.C.) [as sought to be relied on from the part of the Revenue] holding that the judgment passed by the Apex Court accepting the statement given in evidence was based on its own facts as revealed from 'paragraph 19' of the judgment. The observation of the Apex Court in 'paragraph 19' as aforesaid is relevant in this case as well and hence, it is reproduced as below : "19. We are of the considered opinion that it is established from the record that the aforesaid statements were given by the concerned persons out of their own volition and there is no allegation of threat, force, coercion, duress o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence in the interest of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceedings under this Act, other than a proceeding before a Court, as they apply in relation to proceeding before a Court." 21. The terminology used in Section 9D(1) of the Act, 1944 clearly reveals the enabling power of the Court to accept a statement made and signed by a person before any Central Excise officer of a gazetted rank during the course of any inquiry or proceeding under the Act, 1944; to be relevant to the extent as mentioned either in clause (a) or in clause (b). In other words, it is not a provision vouched in a 'negative sense' to hold that the statement given by the person concerned shall not be acceptable in evidence for the proceedings concerned. On the contrary, it is in respect of the power and jurisdiction of the "court" to accept the same as relevant. However, by virtue of sub-section (2) of Section 9D of the Act, 1944, such a course/power, as exercisable by the Court, is made applicable to any other proceeding under the Act as well (other than a proceeding before a Court) as they apply in relation to a proceeding before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty and in many cases, it may lead to prosecution. Strict interpretation is warranted only in respect of the 'imposition of penalty', which cannot have any automatic application in respect of the quantification of the tax/duty evaded. The said judgment does not come to the rescue of the Appellant/Assessee insofar as the incidence of 'duress/coercion/force' in taking the statements concerned by the investigating team is not specifically pleaded, nor was sought to be substantiated before the Adjudicating Authority/Appellate Authority/Tribunal. Under such circumstance, the position is taken care of by the law declared by the Apex Court in Kalvert Foods India Private Limited (supra) (paragraph 19) more so, when the duty evaded was agreed to be paid by the Director of the Appellant-Company as given in his statement and proving the word by his deed, the amount of Rs. 21,59,770/- and Education Cess of Rs. 43,195/- was satisfied, before adjudication. Further, the modified order of penalty inflicted upon the Director (as ordered by the Tribunal) has become final, as no challenge is raised by the Director in the connected Appeal No. E/1651/2008 (against which no appeal has been preferred ..... 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