Punjab-Haryana High Court
Commr. Of C. Ex. vs Polyglass Acrylic Mfg. Co. (P) Ltd. on 17 July, 2003
Equivalent citations: 2003(161)ELT118(P&H)
Author: K.S. Garewal
Bench: K.S. Garewal
JUDGMENT G.S. Singhvi, J.
1. This is a petition under Section 35H(1) of the Central Excise Act, 1944 (for short, 'the 1944 Act') for directing the Customs, Excise and Gold (Control) Appellate Tribunal (for short, 'the Tribunal') to submit a statement of case and refer the following questions of law for the opinion of this Court:
"(a) Whether statement given under Section 14 of the Central Excise Act is admissible in evidence, especially when the same was not retracted at any stage keeping in view the fact that proceedings under Section 14 are the Judicial proceedings?
(b) Whether the Department is required to probe and prove its case of mathematics precision or is required to establish such a degree of probabilities that a prudent man on its basis believe the existence of the facts in issue. As held by Hon'ble Supreme Court in Collector, Customs and Ors. v. D. Bhoor Mall reported as 1983 (13) E.L.T. page 1546.
(c) Whether the Tribunal is right in accepting the plea of the assessee which is not even raised in the ground of appeal or before the Commissioner that statement of the truck driver cannot be taken into consideration. Since they have not been given the opportunity for cross-examination. Whereas 12 notices were issued to the assessee or its authorised signatories, but they have not chosen to appear before the revenue authorities?
(d) Whether the Tribunal was right in holding that it is not a case of the Revenue that there was no misdeclaration regarding description of the goods in the bills of the entries by the appellant and no case regarding the clandestine removal of those goods by the assessee from the factory is made out?
(e) Whether the Tribunal is justified in holding that there is nothing on the record to suggest that imported goods were not used by the assessee for manufacturing, whereas there is a specific and sufficient evidence on the record that the goods never reached factory premises and were unloaded at M/s. Gayatri Exports as per the statement of the driver of the truck? Moreover, as per the statement of Mr. B.D. Jha crushing Machine installed in factory has not been used from the last six months?
(f) Whether it was incumbent upon the assessee to prove that the goods actually reached factory premises when the revenue has already proved on the record that the goods cleared by the customs authorities were off loaded at M/s. Gayatri Exports?
(g) Whether the Tribunal was justified in holding that once the customs authorities cleared the goods and has not seized the goods on the grounds of misdescription, it debars the Central Excise Deptt. from raising the issue in case of evasion of the payment of the Central Excise?
(h) Whether ratio of the law laid down by the Tribunal in the case of Bhillai Conductor is applicable in the facts and circumstances of the present case?"
2. For deciding whether or not the questions framed by the petitioner are the questions of law requiring determination by this Court, we may briefly notice the facts.
3. Respondent No. 1 is engaged in the manufacture of acrylic sheet falling under Chapter heading 39.20 of the Central Excise Tariff Act, 1985. On 23-12-1999, the preventive staff of the Central Excise visited the factory premises of respondent No. 1 and carried out stock taking of raw material and finished excisable goods. S/Shri Braham Deo Jha and Kapil Dev Aggarwal, representatives of respondent No. 1 were associated with this exercise. As a result of physical stock taking, 1,49,347 kgs. of crushed/broken pieces of acrylic were found against the recorded balance of 1,77,441 kgs. of sheets/off-cuts of PMMA and 400 kgs. of DBP-Plasticizer against the recorded balance of 100 kgs. in form IV Register. Besides these, 1829 kgs. of acrylic sheet (finished excisable goods) valued at Rs. 79,740/- involving duty of Rs. 19,138/- were found in excess of recorded balance in RG-I Register, Panchnama dated 23-12-1999, 24-12-1999, 25-12-1999 and 26-12-1999 were drawn on the spot and the goods were detained for verification and further investigation. In his statement dated 24-12-1999 recorded under Section 14 of the Central Excise Act, 1944, Shri B.D. Jha, respondent No. 4 stated that the raw material (Acrylic) as mentioned above, were imported under Bills of Entry No. 212918, dated 29-7-1999, 322715, dated 1-10-1999 and 151462, dated 16-11-1999. Thereafter, the Director and other representatives of respondent No. 1 were summoned for recording their statements, but they did not appear despite service of notices. The transporters of the goods were also summoned and the statements of the driver and the owner were recorded under Section 14 of the 1944 Act.
4. On the basis of material collected by the Department, notice dated 22-6-2000 was issued to respondent No. 1 to show cause as to why Modvat credit may not be disallowed; the duty may not be recovered; the goods may not be confiscated and penalty may not be imposed. The case was finally adjudicated by the Commissioner, Central Excise, Delhi-Ill and order dated 19-12-2001 was passed in the following terms :
"(i) MODVAT credit of Rs. 11,56,607/- on inputs disallowed under Rule 57-1 of the erstwhile Central Excise Rules, 1944 and interest demanded.
(ii) Demand of Central Excise duty of Rs. 3,920/-confirmed on Plasticizer found short and interest demanded under Rule 57-1 of the Central Excise Rules, 1944.
(iii) Seized goods i.e. 1,329 kgs. of Acrylic sheets valued at Rs. 79,740/-confiscated under Rule 173Q of the Central Excise Rules, 1944.
(iv) Penalty of Rs. 12,00,000/- imposed on respondent No. 1 under Rule 173Q of the Central Excise Rules, 1944 read with Section 11A of the Central Excise Act, 1944.
(v) Penalty of Rs. 1,00,000/- imposed on Sh. Ashok Kumar Singla, Director and Rs. 50,000/- each on Sh. B.D. Jha and Sh. Kapil Dev Aggarwal (both authorised signatories) under Rule 209A of the Central Excise Rules, 1944."
5. Appeal filed by respondent No. 1 was allowed by the Tribunal with the following observations :
"(i) there is no case of misdeclaration of the goods in Bills of Entry at the time of import/clearance by the Customs Authorities;
(ii) there is no statement of any buyers of these goods if the same have been removed from the factory clandestinely;
(iii) there is no sufficient cause brought on record as to why the present ground was not taken in the earlier show cause notice dated 28-12-1999 issued immediately after 23-12-1999 when the unit was visited;
(iv) there is no case that the appellants imported waste/scrap in guise of acrylic strips/sheets/chips;
(v) that statement of transporters Incharge of the transporter Company could not be used against the appellants as none of them was subjected to cross-examination and these statements were recorded at the back of the appellants."
6. We have heard learned Counsel for the parties and perused the record. In our opinion, the following questions of law arise for the opinion of this Court:
(a) Whether statement given under Section 14 of the 1944 Act is admissible in evidence, especially when the same was not retracted at any stage keeping in view the facts that proceedings under Section 14 are the judicial proceedings?
(b) Whether the Tribunal is right in accepting the plea of the assessee which is not even raised in the ground of appeal or before the Commissioner that statement of the truck driver cannot be taken into consideration. Since they have not been given the opportunity for cross-examination. Whereas 12 notices were issued to the assessee or its authorised signatories, but they have not chosen to appear before the revenue?
(c) Whether the Tribunal was right in holding that it is not a case of the Revenue that there was no misdeclaration regarding description of the goods in the bills of the entries by the appellant and no case regarding the clandestine removal of those goods by the assessee from the factory is made out?
(d) Whether the Tribunal is justified in holding that there is nothing on the record to suggest that imported goods were not used by the assessee for manufacturing, whereas there is a specific and sufficient evidence on the record that the goods never reached factory premises and were unloaded at M/s. Gayatri Exports as per the statement of the driver of the truck? Moreover, as per the statement of Mr. B.D. Jha crushing Machine installed in factory has not been used for the last six months?
Hence, the petition is partly allowed. The Tribunal is directed to refer the aforementioned questions if law to this Court and submit a statement of case together with the records.