Custom, Excise & Service Tax Tribunal
4. Whether Order Is To Be Circulated To ... vs Cce Ahmedabad-I on 16 August, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
COURT - II
Appeal No.E/287/2006
Arising out of: OIA No.201 to 203/2006(Ahd-I), dt.31.08.2006
Passed by: Commissioner of Central Excise & Customs (Appeals), Ahmedabad-I
For approval and signature:
Mr.M.V. Ravindran, Honble Member (Judicial)
1. Whether Press Reporters may be allowed to see the No
Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen
the order?
4. Whether order is to be circulated to the Departmental Yes
authorities?
Appellant:
CCE Ahmedabad-I
Respondent:
M/s Gopi Synthetics Pvt.Ltd.
Represented by:
For Assessee: Shri Paritosh Gupta, Adv.
For Revenue: Shri K. Sivakumar, Addl.Commissioner (A.R.) CORAM:
MR.M.V. RAVINDRAN, HONBLE MEMBER (JUDICIAL) Date of Hearing:16.08.13 Date of Decision:
ORDER No. /WZB/AHD/2013, dt._____________ Per: M.V. Ravindran
Being aggrieved with the order passed by the Commissioner (Appeals), vide which he has allowed the appeal filed by the respondents here. Department has filed the present appeal. We have heard Shri i, learned Authorised Representative, appearing for the Revenue and Shri P.M. Dave, learned Advocate appearing for the Respondent.
2. The DGCEI officers on 28/29.06.2004 caused enquiry at the premises of the assessee which is a textile processing unit and drew a panchnama and recovered kachha chits from the drawer of Shri Sanjay Patel, Excise Clerk. Names of 12 buyers and lot numbers were written on these loose papers. The lot numbers mentioned in these loose papers were tallied with the lot numbers mentioned in the lot register maintained by the assessee which did not tally. Shri Sanjay Patel who was present in the factory premises during search supposedly explained the investigation officers that these loose papers showed the quantity of grey fabrics received by them for processing; these fabrics were processed in their factory and removed to the concerned buyers; these fabrics were not accounted for in any statutory record/register and were cleared without payment of central excise duty. On the basis of these loose papers a worksheet was prepared to show that the said assessee (respondents) had illicitly processed and clandestinely cleared 388797 l.mtrs of MMF (man made fabrics) valued at Rs.64,39,962/- and 510753 l.mtrs of cotton fabrics valued at Rs.1,01,89,410/- and thereby evaded the central excise duty of Rs.16,62,937/-. Statement of Shri Sanjay Patel, Excise Clerk and Shri Subhash Agrawal, Director and Shri Shambu Bhavsar, supposedly middlemen for purchasing fabris was recorded, which was subsequently retracted by Shri Subhash Agrawal, Director and Shri Shambu Bhavsar. The retracted statements were also sent to the ADG, DGCEI. The assessee explained the discrepancy of lot numbers involved and the invoice numbers under which the goods were cleared. Officers identified the quantity of goods shown to have been lying in the factory premises as per the loose papers (slips), the said fabrics being unaccounted and not entered in the lot register were placed under seizure. This comprised of 33690 l.mtrs of MMF valued at Rs.4,50,777/- and 39398 l.mtrs of cotton fabrics valued at Rs.5,99,978/-. After completion of investigation, a Show cause notice was issued on 22-12-2004. The show cause notice was adjudicated whereby demand for central excise duty on clandestinely removed fabrics was confirmed by the adjudicating authority and seized MMF/CF were confiscated allowing to be redeemed on payment of redemption fine and penalty on the assessee firm and separate penalties on Shri Shambu Bhavsar broker and Shri Subhash Chandra Omkarmal Agrawal, Director were imposed.
3. The assessee and individuals preferred appeals before the Commissioner (Appeals), who fully allowed the appeals filed by all the 3 appellants there. The Commissioner (A) observed that there was o piece of evidence to prove the charges of clandestine removal or seizure in the factory premises of the said assessee. The Order of Commissioner (Appeals) is very exhaustive order where in before coming to a conclusion, he has discussed and analysed each and every piece of relied upon documents vis-`-vis the requirement of evidence under the law.
4. Heard both sides and perused the records.
5. The department being aggrieved by the Order of Commissioner (Appeals) and has filed appeal on the following main grounds which are reproduced in brief, contentions raised by the respondents and my findings on each ground are also discussed along as under :-
(i) The Commissioner (A) failed to appreciate that there was recovery of kachcha chits during the search operation which were containing certain lot numbers and other details. Lot numbers mentioned on these kachcha chits when compared with the lot numbers recorded in their Lot Register, were found to be totally different. Therefore, stock of only goods pertaining to the lot numbers mentioned in the kachcha chits were identified and the entire stock lying in the factory was not measured. Therefore, there was no need to measure entire stock lying in the factory premises.
The respondents have contended that in view of the admitted fact that the whole stock lying in the factory was not measured, the whole case of the Revenue about clandestine removal of fabrics and also about shortage of fabrics falls because the whole case is made out on the basis of kachcha chits. They have submitted that as per the say of the investigating agency all the unprocessed fabrics received in the factory were recorded in such kachcha chits irrespective of the fact whether such fabrics were recorded in lot register while receiving and in RG-1 after processing or not. If all these fabrics were received in the factory were recorded in kachcha chits, then it would not be possible to find out which lots were not recorded in the statutory lot register and RG-1 register unless all the fabrics are physically measured and verified.
I find substantial force in the argument of the respondents that the department has admitted that physical verification of entire stock was not taken. In this scenario, the departments case should have been that kachcha chits were only for unaccounted fabrics or that only those fabrics were recorded in such chits which were removed clandestinely and therefore the department has not totaled up all the quantities recorded in such kachcha chits for arriving at the figures of MMF/CF clandestinely cleared. However, the facts are not so, the department itself believes that all fabrics received in the factory are first entered in kachcha chits and thereafter entered in the lot register, therefore, physical stock verification of entire stock was required to be carried out. This having not been done, the department has not made out a case beyond doubt that there was shortage of particular MMF/CF and certain quantity of these fabrics was in excess.
(ii) Regarding findings of the Commissioner (A) that department did not investigate the 12 buyers whose names were either in the loose papers (slips) recovered or were informed by the Director of the respondent firm, the department has countered this finding of the Commissioner (A) by stating that Shri Agrawal, Director had stated that wherever the name of M/s Ganesh Textile appeared in Annxure B and C to the panchnama dt.28/29..06.2004 is a dummy firm, hence, it is not understood to the department as to what investigations could have been conducted from the said buyer when the Director himself stated that it was a dummy firm. The department has also contended that at least in this country there is no data bank about the firms registered all over the country and it is just impossible to verify as to whether any firm in the name of M/s Ganesh Textiles is existing firm or fictitious firm.
Respondents submit that there were 12 buyers and M/s Ganesh Textiles was one of them. The department has relied on the statement of Shri Agrawal, Director to hold M/s Ganesh Textiles considering it to be a fictitious firm. But there is no say about the remaining 11 buyers, no investigation in respect of these 11 buyers was conducted and none of these 11 buyers were stated to be a dummy unit by Shri Agrawal during recording of his statement. Shri Agrwawal had retracted his statement dt.29.067.2004 on 07.07.2004, hence, it was not a good piece of evidence to be relied upon.
I find that the onus to prove clearance of fabrics by the respondents to the buyers rests on the department and for this purpose investigation was required to have been made with the buyers end, not just restricting to what has been stated by Shri Agrawal, Director about M/s Ganesh Textiles to be a dummy unit. There should have been investigation at the premises of all the 12 buyers whose names were given by Shri Agrawal, Director on the first day of visit of the officers.
(iii) Regarding acceptability of statements which have been retracted the department has contended that the Commissioner (A) did not bother to find out whether the ADG, DGCEI had received a copy of affidavit purportedly sent by Shri Agrawal, Director by UPC. As per the department letters sent by Registered post or Speed Post are recognized mode of service under Section 37C of the Central Excise Act, 1944 and an affidavit sent under UPC cannot be said to have been treated as served. Retraction of Shri Agrawal is contrary to facts on record. Duty has been debited by cheque or entry in RG-23-A-Pt.II and letters informing the same have been sent to DGCEI which does not show that duty was paid under protest. Voluntary payment of duty on 3 occassions which are all subsequent to date of purported retraction clearly brings out that affidavit dt.20.07.2004 is a fabricated document. The department has also contended that demand was made not only on the basis of statement of Shri Agrawal rather demand was made on the basis of entries in kaccha slips and such kachcha slips are corroborated by the lot numbers mentioned on such kachcha slips as well as seized 73088 l.mtrs of fabrics.
The respondents have contended that Section 37C of the Act is not applicable to assessee for filing any document with the Central Excise authorities. They have stated that in addition to submitting retraction affidavits under UPC, the affidavit of Shri Agrawal was also filed under a covering letter dt.27.08.2004 with the jurisdictional Assistant Commissioner before the SCN was issued. The adjudicating authority or first appellate authorities have not disputed about the evidence of UPC submitted by the respondents.
I find force in the contention of the respondents that Section 37C of the Central Excise Act, 1944 was not applicable to them. This section contains provisions relating to service of decisions, orders or summons, etc by the department. So far as the assessee is concerned, the assessee is free to send correspondence or any document by any mode including UPC (Under Postal Certificate). The fact whether the statement was retracted or not and if retracted, whether the same was delivered to the investigating officers or not is of secondary importance. The primary evidence which is required to demand central excise duty from the respondents on the allegation of clandestine removals made by it is to prove that there was clandestine removal. The method and manner in which the entire proceedings have been conducted by the investigating agency which has been discussed in detail in the show cause notice, Order-in-Original and Order-in-Appeal, there is no iota of doubt that there was no actual physical verification of stock of MMF/CF lying in the factory premises. Therefore, there remained all the possibilities of these fabrics lying in the factory premises either in the grey stage or semi-processed stage. The benefit of doubt has to be extended to the respondents as there is no primary evidence to prove that the fabrics of the lot numbers specified in the loose papers were received in the factory premises of the said assessee and cleared without payment of central excise duty in past. In absence of such primary evidence to prove the charges of clandestine removal against the respondents, the other issues including retraction of statements or delivery of the affidavits containing retraction from one end to another does not carry any significance.
(iv) It is the contention of the Revenue that the sanctity and authority of kachcha slips is that the same were recovered from the factory premises of the assessee and from the possession of excise clerk who is authorized to sign all the documents related to central excise. These kachcha slips have been corroborated by the statements of Shri Sanjay Patel, Clerk and Shri Subhash Agrawal, Director and Annexure B and C of panchnama. The lot numbers were mentioned in these kachcha slips which when tallied with lot register statutorily maintained by the assessee were not found entered in lot register. This clearly proves that fabrics mentioned in kachcha slips were not accounted for in the official lot register which means that such processed fabrics were cleared clandestinely without entry in official books of accounts and without payment of duty. Moreover, 73088 l.mtrs of grey and bleached fabrics of lot numbers mentioned in kachcha slips were seized on 28/29.06.2004 during search and said fabrics were also not entered in the lot register.
The respondents have contended that there is no dispute raised about factual position that none of the 12 buyers was approached by DGCEI and thus there is no corroboration of any buyer for clandestinely removed fabrics, there is no evidence of any unaccounted money received by them for clandestinely removed fabrics.
I find that the evidence with which the Revenue wants to corroborate the loose slips is statements of Shri Sanjay Patel and Shri Agrawal, and Annexure B and C which are prepared from the said loose slips. This cannot be treated as independent evidence which can establish beyond doubt that the alleged quantity of MMF/CF have been clandestinely removed by the respondents. In such cases, receipt of the fabrics at the buyers end is an important evidence to corroborate the evidence in the form of loose slips. I find it difficult to understand why the investigation was not carried out further. When the factory was visited by the officers on 28/29.06.2004 and all the annexures demanding central excise duty were also prepared on the same day. The show cause notice was issued on 22.12.2004 after almost 6 months. In these 6 months, the department has not undertaken any further investigation in this case except recording statement of Shri Agrawal, Director and Shri Shambu Bhavsar, Broker on 03.12.2004. These statements appear to have been recorded by the department to show that Shri Shambu Bhavsar was a broker and all these clandestinely removed fabrics were being sold by the respondents through Shri Bhavsar. Shri Agrawal has filed affidavit retracting his statement dt.3.12.2004 and deposed on oath that he introduced Shri Shambu Bhavsar to the department as Broker, who was otherwise their employee. This was done by Shri Agrawal on the insistence of the officers who wanted to conclude their investigation and could not have done so unless and until the buyer end was also hooked up.
6. It is well settled principle of law that charges of clandestine removal are serious charges and cannot be established on the basis of some loose documents of unverified nature. We may here refer to the majority order of the Tribunal in the case of M/s. Tejwal Dyestuff Industries reported in 2007 (216) E.L.T. 310 (Tri.-Ahmd.) wherein it was observed that having obtained confessional statements, Revenue officers did not carry out the detailed investigations into the relevant aspects of the case, particularly the bank accounts and working of the assessees factory. It was further observed by the then Honble President to whom the difference of opinion was referred that recording of a confessional statement would not put an end to investigation and the Revenue officers should be careful to ensure that they are not tricked out of a regular and detailed investigation. By observing so, the dispute was decided in favour of the appellant. The said decision stand confirmed by Honble Gujarat High Court when the appeal filed by Revenue stand rejected as reported in 2009 (234) ELT 242 (Guj).
7. In view of foregoing discussions, it becomes clear that the charges of clandestine removal which also result in criminal liabilities by way of prosecution of concerned persons are required to be proved by sufficient evidences and cannot be decided on the basis of some documents which is the only piece of evidence which may at the most create a suspicion but not a full proof evidence. I have already recorded a finding on the evidentiary value of loose papers (slips) as also the other documents relied upon by the Revenue for corroborating the loose slips.
8. When viewed in the light of the above decisions referred to, it is to be noted that the investigation in the present case did not go to the logical end and does not result in the alleged clandestine activities on the part of the respondents. Apart from the loose papers which are held as not carrying much evidentiary value, there is virtually no evidence on record to establish clandestine activities of the respondents. The said loose papers (slips) along with other documents could have been the starting point of the investigation and carried forward, on which front failed miserably, at the hands of Revenue.
In the case of Ratna Fireworks reported in 2005 (192) E.L.T. 382 (Tri.), it was observed that though mathematical procedure is not required to establish the clandestine removal but that does not mean a fact could be proved without sufficient evidence. The Honble Supreme Court in the case of Anjlus Dung Dung v. State of Jharkhand reported in 2005 (9) SCC 765 observed that suspicion however strong cannot take place of proof.
9. Though, I find that there is a long list of precedent decisions of various courts to the above effect and instead of referring to all of them, I would like to refer to the latest majority decision of Tribunal in the case M/s. Kuber Tobacco Products P. Ltd., Final Order No. A-83/110/2010-EX(Br.), dated 3-2-2012.
26.?It would be necessary to analyze whether the evidences, other than the retracted oral evidences, are credible for being used as corroborative evidence. The Honble Supreme Court in case of Sitaram Sao v. State of Jharkhand - (2007) 12 SCC 630, pithily encapsulated the idea of corroborative evidence, in the following words:
34.?The Word corroboration means not mere evidence tending to confirm other evidence. In DPP v. Hester - (1972) 3 All ER 10.16, Lord Morris said:
The purpose of corroboration is not to give validity or credence to evidence which is deficient or suspect or incredible but only to confirm and support that which as evidence is sufficient and satisfactory and credible; and corroborative evidence will only fill its role if it itself is completely credible....... There can be, therefore, no corroboration of evidence, which is itself unworthy of credence.
27.?That, apart from these retracted oral evidence, the main evidence on which reliance is placed by the Revenue are the loose sheets, Hisaba books and Kaccha Challans. It is undisputed facts that any author of these records was not traced and made available for cross-examination. Moreover, these documentary evidence were not recovered from the office or factory premises of the appellant manufacturer company, and there is no tangible evidence on record to conclusively relate the same with the appellant manufacturer company, except the retracted oral evidence. There isnt any untainted, undisputed admission by the concerned Director of the company that these records relied by the department were of companys unaccounted production and removal thereof. The entire accounted production of the appellant manufacturer for the relevant period is not recorded in these Kachha records besides the alleged unaccounted production. The Honble Member (Technical) was persuaded to assume that Shri Bothra would have keys to premises at 4130, Gali Barna, Sadar Bazar, Delhi, and although Panchnama drawn at this premises nowhere records the name of the appellant company, he was persuaded to further assume that it was a guest house of the appellant company. Although the names of the consignors on GR/RR were found fictitious, the Honble Member (Technical) was persuaded to assume that the same related to the Appellant company. As rightly observed by the Honble President, even the panchnama did not describe or identifies in its annexure which enlists the documents stated to have been recovered from the premises, recovery of any hisaba book or Kachha Challans or loose sheets with written pages. I agree with the findings of the Honble President that entire proceedings have lost credibility and serious doubt arises about the credibility of the materials stated to have been collected by Revenue in the course of proceedings.
29.?In the entire records of proceedings, there is no evidence to indicate that there was clandestine manufacturing. There is no independent tangible evidence on record of any clandestine purchases or receipt of the raw materials required for the manufacturing of the alleged quantity of finished goods for its clandestine removal from the factory. In the entire notice and the order there is no satisfactory and reliable independent evidence as regards the unaccounted manufacture and or receipt of the huge quantities of raw materials. The quantities of the alleged bags dispatched from the factory would require some transportation arrangement for delivery from the factory. However, any reliable evidence about any vehicle coming to or going out of the factory without proper entries is not forthcoming. There is also no cogent evidence about any freight payment for any such movement.
30.?I do not find cogent evidence of disproportionate and unaccounted receipt and consumption of the basic raw materials and packing material, required for manufacturing alleged quantity of unaccounted finished goods. I do not find tangible proof of unauthorized payment for procuring such unaccounted raw material and packing material. I do not find cogent evidence of disproportionate power consumption, capacity utilization and labour employed, or any cogent evidence of clandestine manufacture of unaccounted quantity alleged as clandestinely removed. I find that unaccounted production in the factory of the appellant company has not been established. In Ruby Chlorates (P) Ltd. v. Commissioner of C. Ex., Trichy, 2006 (204) E.L.T. 607 (Tri.- Chennai), it was held that:-
21.?..The settled legal position is that when several raw materials are involved, when a case of clandestine production and clearance is built on clandestine use of raw materials, the same should be proven with reference to unaccounted use of all such major raw materials.
22.?In a case of clandestine removal the department should produce positive evidence to establish the same. In the absence of corroborative evidence, a finding cannot be based on the contents of loose chits of uncertain authorship. Department has not produced evidence of use of inputs to prove that there was manufacture of unaccounted finished product. . Moreover, in the case of Atlas Conductors (supra), this Tribunal has taken a clear view that the demand cannot be on presumption of manufacture but on the basis of actual manufacture which is the basis to come to conclusion as recorded by Honble President in para 47 onwards that the findings of the adjudicating authority are without any evidence and is not correct view and is liable to be set aside.
31.?My above views are fortified by a recent case in the case of Viswa Traders Pvt. Ltd. & others v. CCE, Vadodara being Final Order No. A/1846-1851/WZB/AHD/2011, dated 1-11-2011, a similar issue of clandestine removal was decided by co-ordinate Bench of Tribunal in Ahmedabad, wherein it is held that unless clandestine manufacturing is brought on record, there cannot be any allegation of clandestine clearances, un-corroborated with evidences. I was one of the Members in that Bench and while coming to the conclusion, the Bench had relied upon the judgment of Honble High Court of Gujarat in the case of Nissan Thermoware Pvt. - 2011 (266) E.L.T. 45 (Guj.) I am reproducing the relevant portion of the said order, which is fortifying my view in this case also.
15.?We find that Honble High Court of Gujarat, in the case of Nissan Thermoware Pvt. Ltd. - 2011 (266) E.L.T. 45 (Guj.), has specifically held as under :
7.?Thus, on the basis of findings of fact recorded by the Tribunal upon appreciation of the evidence on record, it is apparent that except for the shortage in raw material viz., HD which was disputed by the assessee and the statement of the Director, there was no other evidence on record to indicate clandestine manufacture and removal of final products. On behalf of the revenue, except for placing reliance upon the statement of the Director recorded during the course of the search proceedings, no evidence has been pointed out which corroborates the fact of clandestine manufacture and removal of final products. In the circumstances, on the basis of the material available on record, it is not possible to state that the Tribunal has committed any legal error in giving benefit of doubt to the assessee.(Emphasis supplied) The above ratio, as laid down by Honble High Court of Gujarat, would squarely cover the issue before us.
16.?In the absence of any tangible evidence which would indicate that there was clandestine manufacture and clearance of the goods from the factory premises of M/s. VTPL, in the peculiar facts and circumstances of this case, we hold that the impugned order which confirms the demand on the appellant M/s. VTPL and imposes penalty on them is not sustainable and is liable to be set aside and we do so.
32.?I also do not find tangible evidence of removal from factory, of unaccounted goods so manufactured, by loading from factory and transportation therefrom, of alleged clandestinely removed goods. I do not find any reliable evidence of the actual customer/recipient of the clandestinely removed goods with their confirmation of unauthorized payment towards unaccounted purchase of goods allegedly manufactured and removed in a clandestine manner from the factory of the appellant. There was no recovery of any unaccounted sales proceeds in substantial cash in the factory or office premises or anywhere else in the control of the appellant company, backed by any confirmation oral or written from the person giving such cash against goods removed in clandestine manner without payment of duty from the factory of appellant company.
10. By taking note of the legal positions as enunciated in the above referred decisions, I note that the confirmation of demand of duty against the assessee based upon the allegations of clandestine removal leading to the financial burden to the assessee as also resulting in criminal prosecution of the authorised persons is required to be done on the basis of evidences which generates confidence in the prosecution case. As observed in the majority order of the Tribunal in the case of M/s. Kuber Tobacco Products P. Ltd., the mathematical procedure to the last extent may not be required but the distance between might have and must have is required to be travelled and filled by the Revenue by producing independent evidences on record, which can lead to inevitable conclusion of clandestine activities. As already discussed in the preceding paras, absence of such evidences on record, in which case, confirmation of demand against the respondents and imposition of penalty on various persons would not be justified and have been rightly dropped by the first appellate authority.
11. I also note the decision of this bench in the case of CCE, Ahmedabad-I v/s Gopi Synthetics Limited (the same respondents) reported in 2009 (236) ELT 0731 (T) wherein Revenues appeal was rejected. This bench observed as under:-
3.?The Revenue filed the appeal thereagainst before the Commissioner (Appeals), which stand rejected by the impugned order.
For better appreciation, I reproduce the relevant paragraph of the Commissioner (Appeals).
Not only that if the prosecuting authority is relying solely on confessional statement then such statement must be voluntary i.e. it should not suffer and stand vitiated on account of exertion of pressure, on intimidation or be under duress and coercion. See : Orient Enterprise v. Collector - 1986 (23) E.L.T. 507 (Trib.). Only those statements or admissions are acceptable or admissible which are voluntarily spontaneous and doesnt suffer from any external pressure, inducement or allurement. I did find in this case that only a single statement of Mr. Pravinbhai Lallubhai Patel who was also as a Manager and Authorised Signatory of 8-12-01 had been relied on. The adjudicating authority had recorded on reasonable conclusion that from the facts and circumstances of the case it appears that the statement of Mr. Pravinbhai L. Patel was as if extracted under pressure, that it was not recorded in a peaceful and in conducive atmosphere. I have every reason to believe the findings of adjudicating authority to be true. It is quite surprising, rather amazing, as to how from units who processes huge quantity of Cotton and Man made fabrics per day some twelve lots had been picked up which were of cotton and MMF as reported at Para 2 of SCN. Therein it was concluded only on the strength of statement of Mr. Pravinbhai L. Patel that all such quantity of Cotton Fabrics and MMF admeasuring at 91128 L. Mtr. of value Rs. 20,90,299/- were cleared in past clandestinely. From where and from whom such cotton fabrics/MMF, (grey fabrics) were purchased or were brought by way of purchase or for job-work. The visiting officer from Revenue Department very plainly and innocently had admitted the statement of Mr. Pravinbhai L. Patel as gospel of truth as if all such processed fabrics were sold in cash at factory gate. The names of purchaser were not elicited nor the statement of even any one of the supplier/purchases, office bearer of such company or of the office/director were got recorded. The statement of Mr. P.L. Patel was admitted by Revenue officials so sacrosent that as if revealed truth and only truth which does not warrant corroboration even in slightest detail. It may be recorded that while investigating the tax evasion case, the deposition made before the such Revenue officer are admitted as an evidence as the person whose statement are recorded are fore-warned that their statement would be used against them. Therefore, they are told to make correct and truthful statement. The provisions of Section 108 of Customs Act, 1962 or of Section 14 of the Central Excise Act, 1944 also enjoins that charged persons are supposed to make correct and truthful statement. In tax-evasion statement, the persons whose statement are recorded are not accused nor can be or treated as accused. Such persons had the protection of Article 20(3) of the Constitution of India. Therefore, the statement of any person being recorded by Customs and Excise officer had to be admitted as evidence but then it must qualify the condition of Section 23 and or of 24 of the Indian Evidence Act, when a statement is considered as a statement before Magistrate, as contemplated under provisions of Section 164 of the Criminal Procedure Code, 1973, than it should not suffer from the vice of undue influence or is deposed on account of mounting any pressure or being rendered under pressure and as a compromise formula.. The statement of Mr. P.L.Patel had not been corroborated at1 all even for single shred. The adjudicating authority had every reason to believe that the shortages of the fabrics whether at grey stage or at process stage were got forcefully admitted from Mr. Patel for making a case as if it had reached to a dead end as far as further investigation were concerned. The learned Commissioner (Appeals) also found that there is no corroborative evidence and as such by taking note of the earlier decision, rejected the appeal.
4. I find no infirmity in the order passed by the Commissioner (Appeals). Revenue has not referred to or adduced any evidences to establish beyond doubt that the goods were clandestinely removed from the respondents factory. Both the authorities below have examined the available evidences in detail and have rightly concluded that they do not establish the Revenue's case. I find no reason to interfere with the impugned order and accordingly the appeal filed by the Revenue is rejected. Similarly, the Revenues appeal was dismissed by the Honorable Gujarat High Court in a case against Omkar Textile Mills Pvt. Ltd. reported in 2010 (259) ELT 0687 (Guj), the honorable High Court observed as under :-
9.?Thus, all the authorities below viz., the adjudicating authority, Commissioner (Appeals) as well as the Tribunal have concurrently found that except for the statement of the Director of the assessee Company, Shri Rajnikant Agarwal recorded on 10-7-2003, there was no other evidence in support of the charge of clandestine removal of goods. The statement recorded on 10-7-2003 had subsequently been retracted by Shri Rajnikant Agarwal. Thus, it is apparent that the only evidence in respect of clandestine removal against the assessee was in the nature of the statement recorded under Section 14 of the Act, which had been subsequently retracted. Before the adjudicating authority, the respondent assessee had led evidence to establish that the charge of clandestine removal is not made out and that there was no shortage of material as recorded in the panchnama which was accepted by the adjudicating authority. The findings of the adjudicating authority stand confirmed by both the appellate authorities. Learned counsel for the appellant is not in a position to point out any evidence to the contrary, in support of the case of the revenue as regards shortage of material or clandestine removal of goods. Thus, the conclusion arrived at by the Tribunal is based solely upon concurrent findings of fact recorded by all the authorities below. In absence of any perversity being pointed out in the findings recorded by the Tribunal, it is not possible to state that the conclusion arrived at by the Tribunal is, in any manner unreasonable so as to warrant interference. A case of clandestine removal of goods has to be made out on facts which find corroboration from the material on record. In absence of any corroborative material, no demand could have been raised merely on the basis of a statement recorded under Section 14 of the Act, which had been subsequently retracted.
10.?In absence of any question of law, much less, a substantial question of law, the appeal is dismissed.
12. On going through the finding in the Order-in-Appeal by the first appellate authority and by the department in the present appeal, it is felt that there is some sort of settling of personal vendetta amongst the officers of the department as there is less discussion in the departmental appeal about the merit, and mere comments on the language used by the Commissioner (Appeals) in the findings and observations. I find that the Order of the Commissioner (Appeals) is a lucid, articulate and well speaking order. The first appellate authority has really gone into the depth of the case and found that the officers of DGCEI had visited the factory premises of the respondents in connection with some inquiry of purchases made by the respondents from M/s Alok Industries Limited, Silvassa and Shri Sanjay Patel, Excise Clerk produced all the documents as detailed in Annexure-D to the panchnama dated 28/29.06.2004. After the inquiry required to be conducted by the officers was over, they went beyond the jurisdiction or the purpose for which they had entered the factory premises and rest is the truth which is observed minutely by the first appellate authority. It is needless to say that while the officers took out their part of anger on each other in this manner, it is the assessee who has to run from pillar to post to save itself from the searches, seizures and proceedings before the departmental authorities as well as Courts of law.
13. In view of the foregoing, I find no merits in the Revenues appeal and needs to be rejected and I do so.
(Pronounced in Court on ______________________) (M.V. Ravindran) Member (Judicial) cbb ??
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