Customs, Excise and Gold Tribunal - Delhi
A.S. Periasamy, Proprietor, Glass ... vs Collector Of Central Excise on 24 March, 1988
Equivalent citations: 1988(17)ECR260(TRI.-DELHI), 1988(35)ELT664(TRI-DEL)
ORDER K. Prakash Anand, Member (T)
1. In this matter, it has been held that the appellant had cleared 1,50,38,920 Nos. of biris without bringing them into Cental Excise accounts and without payment of duty. Accordingly, the department has demanded duty of the order of Rs. 57,812.31 and' a penalty of Rs. 1,000/- has been imposed on A.S. Periasamy, Proprietor of appellant factory. It is against this order that this appeal has been filed before us.
2. We have heard V.K. Dorairaj, Adv.,, and Balbir Singh, SDR for the department.
3. The learned Adv. submits that the entire case against the appellant is made on the basis of two note-books; one reportedly produced by the informer and another by one Sivalingam. These records, it is submitted, were not recovered from the appellant or from his factory. The informer, it is stated, was a former employee of the factory of the appellant, who had been discharged from service for undertaking "parallel trade in biris". It is submitted that it is therefore that he is trying to wreak vengence on the appellant by giving the department false information.
4. It is further urged that even if the note-books were to be taken as depicting the manufacture of biris by Sivalingam, this does not establish the receipt of biris by the appellant or his marketing them after labelling.
5. It is also stated that the department recorded some statements from the appellant on 31-12-1985 and 1-1-1986, but these were repudiated by him in a letter dated 7-1-1986. Similarly, Sivalingam, who had given a statement on 31-12-1985 retracted it in a letter which he addressed to the department on 8-1-1986. It is added that a statement was again obtained from Sivalingam on 25-1-1986 to the effect that he had supplied to the appellant a quantity of 1,50,38,920 biris and that these were not brought into Central Excise records. This statement was repudiated on the same date by Sivalingam.
6. Dorairaj mentioned that Sivalingam was an illiterate person who did not know the reading or writing. In any case, since the confessional statements had been retracted, it is submitted, the Collector should not have relied on them unless there was some corroboration by way of other facts and evidence.
7. The learned Adv., in this connection, relied on the ratio of the decision of the Andhra Pradesh High Court in the case of Assistant Collector of Customs & Central Excise, Hyderabad v. Parasmal - 1983 ELT 328.
8. It is emphasized on behalf of the appellant that the department has failed to discharge the onus, which must rest on it in a case of this kind, to prove the allegation of clandestine production and removal of goods without due accountal in the statutory records and without payment of duty. The learned Adv. has cited in his favour the decision of this Tribunal in the case of Leather Chemicals & Industries Ltd., Calcutta v. Collector of Central Excise, Calcutta[1984 (15) ELT 451 (Trib.)].
9. Finally, it is submitted that the appellant was working under physical control. Therefore, the entire accountal was subject to scrutiny and checking of departmental officers.
10. Briefly responding, Balbir Singh submitted that he would like to reiterate the stand of the department before the lower authority. He adds that it is true that the relevant confessions in this case have been retracted, but this was done not immediately but much later. It is added that the appellant company was involved in two earlier cases of violation of Central Excise Rules. These matters involved shortage of 1,87,000 biris and seizure of 1,01,350 biris.
11. The learned SDR submitted that the explanation given in regard to the note-book recovered on the basis of the department's case is fanciful as there is no evidence as regards inflation of figures to collect more bonus.
12. We have carefully considered the facts of the case and the sub-.missions made before us. We find that the department's case rests on two statements of Sivalingam dated 31-12-1985 and 25-1-1986 as well as two statements of Periasamy dated 31-12-1985 and 1-1-1986, besides private account books for the years 1983, 84 and 85 of Sivalingam and out-workers pass-books of Sivalingam and Saravanan. The main defence of the appellant is that so far as the confessional statement of Sivalingam is concerned, this has been retracted and the Collector should not have relied on it unless the facts have been corroborated by other evidence. Similarly, the statements obtained from the appellant on 31-12-1985 and 1-1-1986 were also repudiated on 7-1-1986. It is, therefore, submitted that the department has not discharged the onus of conclusively establishing the allegation of clandestine production and removal of goods without due accountal in the statutory records and without payment of duty. We do not find these contentions tenable when we look at all the facts of the case.
13. This is a case where the Superintendent of Central Excise visited the premises of Sivalingam, who was an outworker of the factory of the appellant and in the course of the checking undertaken by him, he recovered one account-book containing details of actual quantity of biris supplied to M/s. Glass Beedi Factory. This was on 31-12-1985. On the same day, the officers also visited the Glass Beedi Factory and verified the' stock and accounts, when a shortage of 36,000 Nos. of labelled biris were found.
14. Perusal of the two private account books and out-workers pass-book of Sivalingam and his son Saravanan showed a difference of 1,50,38,920 Nos. of biris, when compared with the appellant's account books.
15. We find that the first statement of Sivalingam was recorded on 31-12-1985. This is a detailed statement which informs how Sivalingam was maintaining the accounts. It also states how the production was delivered to M/s. Glass Beedi Factory and receipts obtained in the note-book. The nature and the manner in which the statement is recorded, including the particulars therein, does not give the impression of the statement having been recorded in haste or under pressure affecting the veracity thereof. The two bound note-books in the possession of Sivalingam, the authenticity of which was fully admitted in the statement, were then handed over to the department. The statement also states quite clearly that it is given voluntarily and without any coercion.
16. Apart from the statement of Sivalingam dated 31-12-1985, we have two statements of appellant Periasamy; one dated 31-12-1985 and the other dated 1-1-1986. In the first statement, appellant admitted the shortage of 36,000 biris and expressed his willingness to pay excise duty thereon, requesting at the same time, for early decision of the case. Further, appellant handed over a large number of out-worker pass-books for verification. This statement is followed by a very detailed further statement of 1-1-1986 recorded after examination of note-books and out-worker pass-books as well as private books supplied by Sivalingam. It is clearly admitted that the difference between the biris manufactured and supplied by Sivalingam and his son, as seen from the private notebooks and the authenticated out-workers pass-books is as follows :
1983 : 67,84,180 1984 : 50,79,940 1985 : 31,74,800
As against this, the total quantity accounted for by Periasamy in outworkers pass-books authenticated by the department were as follows 1983 : 11,14,000 1984 : 21,42,000 1985 : 11,20,000
17. Periasamy further stated that he sold 1,50,38,920 biris in bundles during the previous three years without payment of any excise duty and without accounting for them in Central Excise records. What is more, Periasamy admitted that the statement of Sivalingam was correct. Appellant further offered to pay duty on 1,50,38,920 biris. In the statement, Periasamy said that he knew how to read and write down and the statement was recorded correctly. We, therefore, find that on the one hand, there is a very detailed statement of Sivalingam supported by documentary evidence and on the other hand, there is a statement of the appellant again supported by documentary evidence. The confessional statements of both are corroborated by the supporting documents. Then, suddenly after the lapse of many days, on 7-1-1986, appellant repudiates his statement stating that these were obtained after coercion. To fit into this pattern of defence, on 8-1-1986, Sivalingam also sent a letter to the excise authorities saying that his statement of 31-12-1985 had been obtained by the Central Excise Officers who were posing themselves to be Provident Fund Officers. It is on such retraction that the appellant seeks to fall back on the ratio of the decision of the Andhra Pradesh High Court in the case of Assistant Collector of Customs and Central Excise, Hyderabad v. Parasmal (supra) and the decision of this Tribunal in the case of Leather Chemicals & Industries Ltd., Calcutta v. Collector of Central Excise, Calcutta (supra). These decisions, however, cannot in the background of facts of this case, come to the help of the appellant. This is not a case of bland confessions and prompt retractions. The statements made by Periasamy and Sivalingam are fully supported by the records seized by the department. Retraction was made after many days and, therefore, seems to be in the nature of an after-thought. In the case of Sivalingam, while making the retraction, it is stated that he neither knew how to read or write. The statement recorded says that it was read out to him. What is more is that the statement is supported by records furnished by Sivalingam himself. In the case of Periasamy's statement, it is not at all claimed that he could not read or write and his statement is also fully supported by documents seized from him.
18. In the light of the above discussion, we uphold the demand for duty as well as the imposition of penalty.