TMI Blog2022 (12) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... he scheme of the Act the right to cross examination is not absolute and denial of cross examination was held to be valid upon sound logic and if the same had been done such orders of adjudication have been upheld. Undoubtedly, the adjudicating authority is not conducting a criminal trial. The decree of proof required in such matters is preponderance of probabilities and not proof beyond the reasonable doubt. Therefore, while examining the correctness of the order of adjudication, the tribunal or the court should not apply the yardstick which a court would apply to a subordinate court which has arrived at a conclusion after a full-fledged trial. The facts of the case clearly shows that sufficient material was available with the adjudicating authority which came to the notice of the authority much later upon such operations being conducted and therefore the invocation of the extended period of limitation for initiating proceedings was fully justified. At no point of time there has been any retraction of the statements recorded under Section 108 of the Customs Act. Therefore, those statements could be relied upon and for the other reasons we have given above, we are inclined to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT Credit to the respondents? (f) Whether the statement recorded of a concerned responsible person of an assessee is to be treated as an admitted position of facts when the said person himself never retracted his own statement at any stage of the proceedings? (g) Whether the Learned Tribunal is justified in not giving due consideration to the two judgments delivered by the Hon ble Supreme Court as relied upon by the adjudicating authority which lay down the principle that failure to produce best evidence on the part of the assessee implies that the evidence would go against them? (h) Whether the Learned Tribunal is right in deleting the personal penalty imposed upon the respondent No. 2? 2. We have heard Mr. Uday Sankar Bhattacharyya, assisted by Ms. Aishwarya Rai, learned junior standing counsel for the revenue and Mr. Somak Basu, learned advocate appearing for the respondent. 3. The respondent is a manufacturer of castings falling under Chapter 73 of the First Schedule to the Central Excise Tariff Act, 1985. A notice to show cause was issued to the respondent alleging that they have contravened the provisions of Rule 4, 6, 8 and 12 of the Central Excise Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the Commissioner has proceeded to conclude the case against the respondent. Further the tribunal held that payment of tax during the course of investigation would not amount to acceptance of any allegations as mentioned in the show cause notice. 6. Mr. Uday Sankar Bhattacharyya, learned Senior Standing Council submitted that the order passed by the learned tribunal is perverse, it failed to take into consideration, the voluntary statement given by the Director of the respondent which was recorded in August 2015, and there was no retraction or denial of the statements and even in the reply to the show cause notice which was given after more than two years, no such retraction has been made by the Director and therefore the question of rejection of those statements which are admissible in evidence does not arise. That apart, the ground raised before the tribunal on which the tribunal had granted relief was never the case of the respondent when the reply to the show cause notice was submitted nor when the case was adjudicated. In support of his contention, the learned counsel placed reliance on the decisions in the case of:- Naresh J. Sukhwani Versus Union of India 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J K Cigarettes Limited Versus Collector of Central Excise 2009 (242) ELT 189 (Del), M/s. Fine Aromatics Versus Union of India and another 2016 SCC Online P H 4781. 8. It is further submitted that the allegation of clandestine removal had been made against the respondent based on surmises and conjectures and there was no material available with the department to support such stand. To support this argument, reliance was placed on the decision in Commissioner of C.Ex, Coimbatore Versus Sva Steel Re-Rolling Mills Limited 2018 (362) ELT 411 (Mad). Further it is submitted that all the payments have been made through banking channel and the allegations of clandestine removal is wholly untenable and therefore the learned tribunal rightly granted relief to the respondent. To support such contention, reliance was placed on the decision in Commissioner Versus Motabhai Iron and Steel Industries 2015 (316) ELT 374 (Guj). Further it is contended that the extended period of limitation could not have been invoked more particularly, when two scrutiny were conducted by the department. To support such contention, reliance was placed on the decision of the Hon ble Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office staff of the respondents. The director in clear terms has accepted that the suppliers are non-existent, they were all fraudulent entities and other statements which clearly go to show that the transactions were fully fictitious. This statement given by the director has been extensively relied on by the adjudicating authority. At no point of time, the director has retracted the statement. We have gone through the reply dated 15.12.2017 submitted to the show cause notice even in the said reply there is no denial nor any other allegations made against the department while recording the statements. Therefore, it is not clear as to how the learned tribunal embarked upon the exercise to consider as to whether Section 9D of the Act was violated or not. In fact, that was never the case of the respondent either at the time of investigation or when reply to show cause was submitted nor when the show cause notice was adjudicated. Such a plea was never canvassed. Assuming the respondent was entitled to canvass such an issue stating that it is a legal issue, it has to be seen whether at all such legal issue arises in the case on hand. We say so, because it is the statement of the directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in such matters is preponderance of probabilities and not proof beyond the reasonable doubt. Therefore, while examining the correctness of the order of adjudication, the tribunal or the court should not apply the yardstick which a court would apply to a subordinate court which has arrived at a conclusion after a full-fledged trial. The facts of the case clearly shows that sufficient material was available with the adjudicating authority which came to the notice of the authority much later upon such operations being conducted and therefore the invocation of the extended period of limitation for initiating proceedings was fully justified. 11. Mr. Basu contended that all payments were made through banking channels and service tax has also been remitted for the transport services availed. Payment through the banking channel and voluntary payment of service tax by the service recipient will not make the transactions genuine. The department had sufficient material to establish the case of fraudulent availment of credit. Thus, the department has discharged the burden of proof cast upon them and thereafter the burden shifts on the respondent to show that the transactions were genuine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore them is not inadmissible in terms of Section 25 of the Evidence Act. 14. As rightly pointed out by Mr. Bhattacharyya, the decision in the case of Nirmal Singh Pehlwan was an appeal challenging the concurrent judgments of the courts sentencing the appellants therein to undergo 10 years rigorous imprisonment for having violated the provisions of Section 22 of the Narcotic Drugs and Psychotropic Substances Act, 1985. During the course of investigation, the appellant therein had made a confession under Section 108 of the Customs Act admitting his guilt. The matter was ultimately taken up for trial and the case ended in conviction and while doing so, the trial court held that the case against the appellant therein had been proved beyond doubt more particularly as he had made a confession under Section 108 of the Customs Act which was admissible in evidence as the Customs Officer was not a police officer and that the provisions of Section 50 of the Narcotic Drugs and Psychotropic Substances Act had been complied with as a consent memo was drawn. The decision of the trial court was affirmed on appeal and the matter was carried on appeal to the Hon ble Supreme Court. Considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Drugs and Psychotropic Substances Act. Thus, the decision in Nirmal Singh Pehlwan is wholly distinguishable on facts and cannot be applied to the case on hand. Likewise, the decision in the case of Duncan Agro Industries is also is a case of criminal prosecution under the provisions of the Central Excise Act and the department filed an appeal before the High Court contending that the trial court committed an error in discarding the statements recorded by the Central Excise Officers under Section 15 of the Central Excise Act from the witnesses and also from the person who subsequently became accused. While considering the said contention, the court had taken note of Section 145 of the Evidence Act and Section 9D of the Central Excise Act and it was held that the statement of the witnesses recorded by Central Excise Officers under Section 14 of the Central Excise Act and who are alive cannot be treated as substantial evidence in the criminal prosecution in view of Section 9D of the Act. Further we note that in the said case the accused had retracted those confessional statements. Thus, the decision in Duncan Agro is also distinguishable on facts and cannot be applied to the case on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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