Custom, Excise & Service Tax Tribunal
M/S.Sree Lakshmi Narasema Textiles vs Commissioner Of Central Excise, ... on 21 July, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.E/52/2006
[Arising out of Order-in-Appeal No.262/2005 dated 18.10.2005 passed by the Commissioner of Central Excise (Appeals), Coimbatore]
For approval and signature:
Honble Mr. P. KARTHIKEYAN, Member (Technical)
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
3. Whether the Member wishes to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s.Sree Lakshmi Narasema Textiles
Appellants
Versus
Commissioner of Central Excise, Coimbatore
Respondent
Appearance:
Shri G. Natarajan, Adv. Dr. Nitish Birdi, SDR For the Appellants For the Respondent CORAM:
Mr. P. Karthikeyan, Member (Technical) Date of hearing : 21.7.2008 Date of decision : 21.7.2008 Order No.____________/2008 The instant appeal has been filed by M/s.Sree Lakshmi Narasema Textiles and is directed against an order of the Commissioner (Appeals), Coimbatore. The facts in brief are that following a surprise search at the premises of the appellants, certain incriminating documents were recovered by the departmental officers on 8.10.2003. 450 kgs of cotton yarn in excess of the accounted stock was seized. These included a diary maintained by Smt. B. Indiramani, Proprietrix of the concern. The diary showed details of date-wise transactions the proprietary concern had entered into, with various persons. In a statement recorded immediately on recovery of the documents, Smt. Indiramani admitted that amounts shown as receipts against S/Shri Suresh, Murthy, Palanisamy, Arora and M/s.Uma Tex were receipts towards clandestine clearances made by the concern. Statutory records were not maintained up-to-date. The production was written only upto 30.09.2003. A sheet of paper containing details of production and clearances in the month of September, 2003 indicated production of 17,723 kgs. of yarn as against 6,003 kgs. recorded in the production register. Statements were recorded from two of the brokers, figured in the diary maintained by Smt. B. Indiramani. Statements recorded from these two brokers corroborated the admission statements made by Smt.B.Indiramani. The original authority demanded duty taking into account the figures in the diary as representing sale proceeds of cotton yarn manufactured and cleared by the assessee. In the impugned order, the Commissioner allowed the benefit of computation of duty liability considering the sale proceeds as including the duty due. The Commissioner vacated the penalty imposed on one of the major buyers M/s.Uma Tex. As per the impugned order, an amount of Rs.5,48,617/- has been demanded from the appellant along with interest due on the duty amount. An amount of Rs.1 lakh deposited during investigation has been appropriated towards part of the amount demanded. A penalty of Rs.4,48,617/- imposed on the appellant has been upheld. He also upheld the confiscation of 450 kgs of cotton yarn seized on 8.10.2003.
2. The learned Counsel for the appellants submits that the confessional statement given by the Proprietrix of the assessee concern could not be relied on for confirming the demand for the reason that she had retracted the confessional statement when another statement was recorded from her on 5.5.2004. The brokers S/Shri Suresh and Murthy whose statements were relied on in the proceedings by the lower authorities were not produced for cross-examination by the appellant. Therefore, their statements could not be relied upon to arrive at any finding against the assessee. In the second statement, the appellant had explained that the amounts that she had received and reflected in the diary seized were for various monetary transactions. In quantifying the demand, the lower authorities took into account the excess production found as per the paper seized on 8.10.2003 as well as the clearances recorded in the diary. The seized paper showed clearances of September, 2003. Therefore, there was double demand for the same clearances relating to the month of September, 2003. This was an error committeed by the authorities.
3. The learned SDR submits that since the appellant herself admitted the clandestine clearances which were supported by systematic accounts maintained on a daily basis, there was no need for corroboration of her admission by cross-examination of any witness. Even without the statement of the witnesses, the allegation of clandestine clearances and evasion of duty alleged were established. The department had no objection to exclude the figures relating to clearances in September, 2003 which appeared on the slip in determining the duty liability.
4. I have carefully considered the facts of the case and the rival submissions. There is no dispute that the appellant had admitted to have made clandestine clearances and that the receipts shown on a daily basis from her buyers in the diary were towards such clearances. This confessional statement was retracted only in another statement recorded by the officers of the department in April, 2004. The initial statement had adequate support from the records authenticated by the assessee herself in the form of diarised accounts of clandestine clearances. In the circumstances, the confessional statement recorded under Section 14 of the Central Excise Act become reliable evidence which was available to the authorities. In the facts of the case, the original authorities did not have to rely on the submissions of the brokers in arriving at the finding of evasion and contravention by the appellant. However, as rightly pointed out by the learned Counsel, there has been duplication in reckoning the duty due for the month of September, 2003. This shall be worked out and the duty liability quantified correctly as claimed by the appellant. But for this relief, the appeal is dismissed.
(Dictated and pronounced in open court) (P. KARTHIKEYAN) MEMBER (T) ksr 21-07-2008 ??
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