Gujarat High Court
Tulip Lamkraft Pvt Ltd vs Commissioner Of Central ... on 10 November, 2014
Author: Akil Kureshi
Bench: Akil Kureshi, Vipul M. Pancholi
O/TAXAP/1173/2014 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 1173 of 2014
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TULIP LAMKRAFT PVT LTD....Appellant(s)
Versus
COMMISSIONER OF CENTRAL EXCISE....Opponent(s)
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Appearance:
MR D K TRIVEDI, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
Date : 10/11/2014
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI) Appellant-assessee has challenged the judgment of the Customs, Excise and Service Tax Appellate Tribunal ('the Tribunal' for short) dated 4.7.2014 dismissing the appeal of the assessee. The appellant Company was engaged in the activity of manufacturing laminate sheets. An excise raid was conducted at the manufacturing unit of the assessee on 12/13.12.2009. Evidence was collected for the alleged clandestine removal of the goods without payment of excise duty. Statement of one Maheshbhai B.Thakkar, Clerk of the Company was recorded on 13.12.2009. Two statements of Nilesh Kanubhai Thakkar, one of the Directors of the Company dated 13.12.09 and 17.2.2011 were recorded. Eventually, a show cause notice dated 25.4.2011 was issued by the Joint Commissioner of Page 1 of 5 O/TAXAP/1173/2014 ORDER Central Excise alleging that the appellant had evaded payment of excise duty by clearing excisable goods without invoice and without payment of central excise duty to the tune of Rs.7,57,452/-. The appellant was called upon to show cause why such duty with penalty and interest be not recovered. A detailed reply to the said show cause notice was given on behalf of the appellant opposing the proposals. The adjudicating authority partially confirmed the duty with penalty and interest giving benefit of cum-duty element of the goods cleared without payment of duty. The appeal of the appellant was dismissed by the appellate authority upon which the appellant approached the Tribunal. The Tribunal also dismissed the appeal concentrating mainly on the unretracted statements of the employee and the Director of the Company and contents of such statements. In the concluding portion of the judgment, the Tribunal recorded the contention of the representative of the appellant that there was no evidence of extra consumption of electricity and procurement of raw materials. Such contention, however, was not considered observing that these points were never argued before the appellate authority nor taken as grounds of appeal before the Tribunal. It is this judgment which the appellant has challenged in this appeal.
As can be seen at the outset, the entire issue is based on facts and assessment of evidence. Counsel for the appellant, however, raised a contention that the Tribunal erroneously discarded the appellant's contention of absence of evidence of extra consumption of electricity and procurement of raw materials for additonal manufacture and clearance of the goods. He submitted that both Page 2 of 5 O/TAXAP/1173/2014 ORDER these contentions were raised before the adjudicating authority as well as the first appellate authority. He submitted that in reply to the show cause notice itself, these contentions were taken. In the written arguments also, these aspects were reiterated. Even otherwise, the Tribunal could not have discarded these contentions even if they were raised for the first time. In support of this contention, he relied on a decision of the Supreme Court in the case of Devangere Cotton Mills Ltd v. Commissioner of C.Ex., 2006 (198) ELT 482 (SC).
In our opinion, however, it does not give rise to any substantial question of law. The entire issue is based on appreciation of evidence. The Excise authorities during the raid on the premise of the manufacturing unit of the appellant, as noted earlier, recorded two confessional statements. One was of Shri Maheshbhai Thakkar, an employee of the Company who admitted that he was the dispatch supervisor. He would load the manufactured goods for dispatch. As per the kachha note details of which he would note down in his small diary. Once the diary is exhausted, he would hand over the same to the Director of the Company Shri Nileshbhai Thakkar. He was shown two diaries of such description and agreed that the same were such diaries. He admitted that the goods shown to have been dispatched in the said diaries were actually so dispatched. In his statement dated 13.12.2009, Shri Nilesh Thakkar, Director of the Company admitted that he was engaged in the day to day functioning of the Company. He was also shown such two spiral diaries which contained his signatures. He admitted that the goods Page 3 of 5 O/TAXAP/1173/2014 ORDER described in such diaries were actually dispatched as mentioned in the diaries and such goods were dispatched without bills or invoices. He admitted that value of such goods would be approximately Rs.91.92 lacs on which excise duty payable would be approximately Rs.7.57 lacs. He admitted that no such excise duty was paid on the goods so dispatched. He also admitted that the goods were sold without bills or invoices or without making any entries in the records. Raw materials for such goods were purchased in cash without making any entries in the record. In his second statement dated 17.2.2011, in addition to admitting his previous statement, he further stated that the goods clandestinely removed as mentioned in the spiral diaries were sold to known people. He, however, could not produce the names and addresses of such purchasers since they were not mentioned in the register.
It can thus be sen that the Dispatch Supervisor as well as one of the Directors of the Company who was responsible for the day to day functioning of the Company had in unequivocal terms admitted the clandestine removal of the goods without payment of excise duty. Matching entires were found in their diaries which did not form part of the final records. Raw material was purchased in cash. Clearances were made without raising bills or invoices. Significantly and admittedly these statements were never retracted. The authorities were, therefore, entitled to rely on such statements. When the adjudicating authority and two appellate authorities found that there was enough evidence of clandestine removal of goods, in our opinion, the appeal does not give rise to any question of law.
Page 4 of 5O/TAXAP/1173/2014 ORDER We are prepared to accept the appellant's contention that the question of additional consumption of electricity and procurement of raw material was raised before the lower authorities or that it could have been raised for the first time before the Tribunal. However, such question was not germane at all. When there was overwhelming evidence of unretracted unequivocal confessional statements, mere failure on the part of the Excise authorities to produce additional evidence of extra consumption of electricity or source of procurement of raw material would pale into insignificance. The Tribunal's remarks were merely in the nature of passing thoughts. Vulnerability of such observations would not vitiate the order itself.
In the result, the Tax Appeal is dismissed.
(AKIL KURESHI, J.) (VIPUL M. PANCHOLI, J.) (vjn) Page 5 of 5