TMI Blog2023 (10) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... lant cannot claim any violation of the same. From the facts as admitted by the appellant and other in their statement recorded under Section 14 of the Central Excise Act, 1944 it is quite evident that factory at Gali No 15 Krishna Vihar Phase 1, Sevadham, Loni Gaziabad, is a factory jointly owned by the Appellant and his younger brother, without entering into any formal partnership. The factory has not been given any name nor has been registered with any of the government departments either centre or state. The entire activities undertaken in the factory were done clandestinely and no formal records were maintained about the operation. Appellant has not challenged any of the findings recorded by the Commissioner in the impugned order. When the appellant has in his statement recorded under section 14 while giving the details of working of the unit have admitted that he was actively involved in the working of the unit the grounds taken in the appeal which are in nature of alibi do not merit any consideration - His active involvement in the clandestine activities is an admitted fact and penalty imposed on him under Rule 26 is total justified. There are no merits in this appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oli Extension, Near National Flower School, Delhi and their/ two relatives namely Shri Ashok Tyagi and Shri Gajendra Tyagi residing nearby in the same gali are also carrying out finishing work of the said forged brass coke/ valve at the first floor of their residential premises. 2.2 Acting on the intelligence the factory premises of the appellant and his brother was searched on 23.01.2012. Since appellant was not maintaining any record of production of clearance of the excisable goods manufactured and cleared by them the physical stock of goods totally valued at Rs 22,23,052/- found in the factory premises was verified and seized under the provisions of Section 110 of Customs Act, 1962 as made applicable to Central Excise in terms of Section 12 of Central Excise Act, 1944. Various records found during the search were resumed. All the proceedings were undertaken in the presence of Pancha witnesses and recorded under proper panchnama. Simultaneously the residential premises of the two and the factory cum residential premises of Shri Ashok Tyagi and Shri Gajendra Tyagi also searched. Incriminating documents found there from were also resumed and proper panchnama drawn at this premi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Pintu Tyagi and Shri Pradeep Tyagi and Shri Pradeep Tyagi. 3.1 We have heard Shri Abhas Mishra, Advocate for the Appellant and Shri Manish Raj for the revenue. 3.2 Arguing for the appellant learned counsel submits that: The proceedings initiated by the Show Cause Notice and adjudged by the impugned order are bad in law to the extent it pertains to his client. The impugned order was passed in gross violation of the principles of natural justice. The appellant is not at all concerned with any of the activities of factory of Lat Shri Pradeep Tyagi. RUD-6 which is the statement of Lt. Shri Pradeep Tyagi, clearly identifies Shri Pradeep Tyagi as the owner of the unit. As the appellant is not concerned with the activities of the unit, penalty imposed upon him under Section 11AC cannot be justified. For the same reason penalty under Rule 25 too cannot be justified. Since the appellant was not the manufacturer of any excisable goods in the factory of his younger brother Lt Shri Pradeep Tyagi, no submissions can be made by him regarding the sustainability of the demand of duty. He filed the list of dates. 3.3 Arguing for the revenue learned authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hearing notices were not being received and hence pasted at the residential premises of the appellant. The text of the two panchnama is reproduced below: PANCHNAMA DATED 09.02.2016 Drawn At Gali No 15 Krishna Vihar Phase I Sevadham. Loni, Ghaziabad. Panch1: Shri Ranjeet Kumar, Aged 21 Years S/o Shri Sudhir Kumar, R/o H No 137 Sector 6, Rajendra nagar, Sahibabad, Gahziabad (U P). Panch2: Shri Satish Kumar, Aged 45 Years S/o Shri Rajendra Singh, R/o H No 38/5 Hindan Vihar, Gahziabad (U P). We the above named panchas having been called upon by the officers of Anti Evasion, Central Excise Service Tax Commissionerate Ghaziabad (hereinafter referred to as officers ) presented ourselves today i.e. on 9th February 206 at about 12.00 Hrs near Gali 15 Krishna Vihar Phase I Sevadham. Loni, Distt Ghaziabad. The officers introduced themselves by displaying their identity cards and requested us to witness the proceedings to serve a letter C No V(15) Adj. /Pintu Tyagi / Gzb / Comm /166/ 14/ 552 dtd 05.02.2016 issued by Superintendent (Adj), Central Excise Ghaziabad to Shri Pijntu Tyagi and Shri Pradeep Tyagi at Gali No 15 Krishna Vihar Phase I Sevadha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e premises the officers knocked the door which was opened by a lady who refused to divulge her full name and identity. The officers gave their introduction to the lady and apprised her of the purpose of their visit and asked her about Shri Pintu Tyagi and Shri Pradeep Tyagi. The lady told that Shri Pintu Tyagi and Shri Pradeep Tyagi do not reside at this address, She informed that she has no idea about said persons has no relation with them and refused to receive any letter on behalf of Shri Pintu Tyagi and/or Shri Pradeep Tyagi. When officers tried to convince the lady, she shut the door and went inside. Therefore the officers affixed the letter C No V(15) Adj. /Pintu Tyagi / Gzb / Comm /166/ 14/ 553 dtd 05.02.2016 at a conspicuous place of main gate of at House No 873, Gali No 14 Mandoli Extension, Delhi. All the proceedings were conducted peacefully in our presence without causing any damage either to property or to persons. The proceedings were recorded by one of the officers on his laptop on our request and as dictated by us. The contents of this Panchnama were read over to us in our vernacular and we have understood the same well. The Panchnama concluded at 16.30 Hrs o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing may not be necessary in all cases, though in some matters, depending upon the nature of the case, not only full-fledged oral hearing but even cross-examination of witnesses is treated as necessary concomitant of the principles of natural justice. Likewise, in service matters relating to major punishment by way of disciplinary action, the requirement is very strict and full-fledged opportunity is envisaged under the statutory rules as well. On the other hand, in those cases where there is an admission of charge, even when no such formal inquiry is held, the punishment based on such admission is upheld. It is for this reason, in certain circumstances, even post-decisional hearing is held to be permissible. Further, the Courts have held that under certain circumstances principles of natural justice may even be excluded by reason of diverse factors like time, place, the apprehended danger and so on. 31 . We are not concerned with these aspects in the present case as the issue relates to giving of notice before taking action. While emphasizing that the principles of natural justice cannot be applied in straight-jacket formula, the aforesaid instances are given. We have hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows: xx xx xx (v) The next question to be answered is what is the effect on the order of punishment when the report of the enquiry officer is not furnished to the employee and what relief should be granted to him in such cases. The answer to this question has to be relative to the punishment awarded. When the employee is dismissed or removed from service and the inquiry is set aside because the report is not furnished to him, in some cases the non-furnishing of the report may have prejudiced him gravely while in other cases it may have made no difference to the ultimate punishment awarded to him. Hence to direct reinstatement of the employee with back-wages in all cases is to reduce the rules of justice to a mechanical ritual. The theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist the individual to vindicate his just rights. They are not incantations to be invoked nor rites to be performed on all and sundry occasions. Whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the report, has to be considered on the facts and circumstances of each ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same business of trading of LPG Gas stove parts and the Appellant only looked after the business in his absence and helped him in marketing 23.01.2012 Officers of Central Excise caused a search at the factory premises and residential premises of the appellant. 09.02.2012 Statement of Appellant and Shri Pradeep Tyagi were recorded 19.07.2012 Show Cause notice in respect of the seized goods was issued was received 20.07.2012. No response was filed in reply and the matter got adjudicated ex-parte. 17.06.2013 Shri Pradeep Tyagi expired. Death certificate issued by MCD on 13.02.2014 05.02.2015 Show cause notice for present proceedings issued. 09.02.2016 Notice for hearing on 15.02.2016 was pasted on the residential premises of Shri Pintu Tyagi and Shri Pradeep Tyagi alos on the factory of Shri Tyagi and Shri Pradeep Tyagi as all other modes of service had failed. 15.02.2016 Appellant chose not to respond to the notices b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Shri Pramod having their godown in Sevadham. Gas cylinder is purchased from local vendors. They employ about 35 laborers depending on the work load. Laborers are deputed to look after the work at furnace. Main raw material is brass powder (burada), brass scrap and brass parts (purja). Other raw materials are zinc, soda suhaga etc. Brass scrap is melted first. During melting zinc, soda, suhaga etc. is added and out of it brass rods are manufactured. These brass rods are then forged into brass valves and brass cocks. No finishing is done. They are working for small workers namely Shri Ashok Tyagi, Shri Shravan Tyagi, Shri Adesh Tyagi, Shri Rameshji, Shri Rajesh Sharma, Shri Dhanprakash Tyagi, Shri Manoj Tyagi, Shri Masterji, Shri Sachinji, Shri Amit Tyagi, Shri Bobby, Shri Naresh and Shri Kuldeep Tyagi from whom they procure the raw material and sell the finished goods. He is not aware of the addresses of these persons who use to deliver the raw material at their factory premises and collect the finished products from there itself. They were only working for the person who provided the raw material and procured te finished goods from them. The records were maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bill/ invoice book for removal/ sale of the goods from their factory. Goods are removed on the basis kacchi slips after receiving directions from Shri Pintu Tyagi on phone. The record of removals is maintained in kachha register resumed by the officer during search. The receipt of raw material i.e. brass scrap is also on kachhi slip without any bill/ invoice. He has seen the various records small note books stock book and signed them. These books are maintained for removal of the finished goods and contain the details of items their quantity. The register contains the detail of receipt of raw material and removal of finished goods and stock balance. Unit is owned by Shri Pintu Tyagi and Shri Pradeep Tyagi residing in Mandoli Delhi. Shri Ashok Tyagi and Shri Gajendra Tyagi are their relatives. This factory premises are taken on rent (@ Rs 30,000/- per month) from Shri Gajendra Tyagi. Rate of finished goods is Rs 300/- per kg and coal is used in the furnace. 4.10 Shri Pradeep Tyagi in his statement recorded on the date of search while agreeing with the contents of the statement of Raju Yadav also stated that 4.11 Shri Pradeep Tyagi in his statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have been adduced to allege clandestine removal and demand duty on these removals in the show cause notice and impugned order. When the officers visited the factory it was running and had stock of finished goods and raw material which has been seized by the officers. These goods have been confiscated by the Additional Commissioner in separate proceedings without any appeal being filed against the order. Commissioner has also relied upon the decision in case of D Bhoormal [1983 (13) ELT 1546 (SC)] holding as follows: 30 . It cannot be disputed that in proceedings for imposing penalties under clause (8) of Section 167, to which Section 178A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrary. 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion or the Department may be considerably lightened even by such presumption of fact arising in their favour. However, this does not mean that the special or peculiar knowledge of the person proceeded against will relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of that fact in issue. It will only alleviate that burden to discharge which very slight evidence may suffice. 33 . Another point to be noted is that the incidence, extent and nature of the burden of proof for proceedings for confiscation under the first part of the entry in the 3rd column of clause (8) of Section 167 may not be the same as in proceedings when the imposition of the other kind of penalty under the second part of the entry is contemplated. We have already alluded to this aspect of the matter. It will be sufficient to reiterate that the penalty of confiscation is a penalty in rem which is enforced against the goods and the second kind of penalty is one in personam which is enforced against the person concerned in the smuggling of the goods. In the case of the former, therefore, it is not necessary for the Customs authorities to prove that any par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced on such private record in the absence of corroborative evidence to show clandestine removal of the excisable goods. 18.1 The Daily report tin factory note-book contained details of production and issue of tin containers by the appellant, which did not reflect in the statutory record. The details of production and clearance of tin containers were also shown in the note-book Daily production report separately in respect of the appellant firm which tallied with the figures shown in the Daily report tin factory which contained figures both for the new tin factory as well in the name of the appellant. In this context, it will be noticed that the managing partner Shri Yogesh Garg confirmed in his statement recorded on 29-9-1998 that the documents recovered under the panchnama on 1-9-1998 were pertaining to production and clearance of tin containers by their factory. He stated that these documents consisted of daily production reports written in note-books, delivery challans, stock record of tins etc. The documents recovered pertained to production and clearance of tin containers. He also stated that amongst other supervisors, even Awadesh Kumar Saxena, Electronics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacture of such goods in the firm name. There cannot be more authentic evidence than recovery of the said private record from the appellant s factory which admittedly was prepared and bears the signatures of the supervisors of the appellant, and which is proved to have been maintained in the factory, from the statements of the partner Shri Yogesh Garg, the Electronics Engineer, Shri Awadesh Kumar Saxena who has made several daily reports in the said book, and the authorized signatory, Shri Girijesh Rai in whose presence the note-books were recovered under a panchnama. In answer to question No. 18, Shri Awadesh Kumar Saxena who was shown the Daily production reports, stated in his statement dated 29-9-1998 that all these pertained to the appellants who manufactured the tin containers and that these contained information regarding production and clearance. He also stated in reply to question No. 19 that all challans were prepared by Shri Rajeev Agarwal and others whose signatures he recognized. The authenticity of the recovered documents was admitted by the partner Yogesh Garg [noticee No. (2)] and noticee No. (6) (Girijesh Rai) who also admitted that the record pertained to u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shan Singh v. State of Punjab (2016) 3 SCC 37; Mukesh v. State (NCT of Delhi) (2016) 6 SCC 1; Pappu Tiwari v. State of Jharkhand 2022 SCC OnLine SC 109.] of this Court, are: 19.1 It is not part of the General Exceptions under the IPC and is instead a rule of evidence under Section 11 of the Indian Evidence Act, 1872. 19.2 This plea being taken does not lessen the burden of the prosecution to prove that the accused was present at the scene of the crime and had participated therein. 19.3 Such plea is only to be considered subsequent to the prosecution having discharged, satisfactorily, its burden. 19.4 The burden to establish the plea is on the person taking such a plea. The same must be achieved by leading cogent and satisfactory evidence. 19.5 It is required to be proved with certainty so as to completely exclude the possibility of the presence of the accused at the spot of the crime. In other words, a standard of strict scrutiny is required when such a plea is taken. 22. We find that for the plea of alibi to be established, something other than a mere ocular statement ought to have been present. After all, the prosecution has relied on the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X
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