Customs, Excise and Gold Tribunal - Delhi
Surie Engg. Works vs Cce on 19 September, 2003
Equivalent citations: 2004(91)ECC148, 2004(167)ELT195(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. This appeal has been directed by the appellants against the Order-in-Appeal vide which the Commissioner (Appeals) has affirmed the Order-in-Original.
2. Ld. Counsel has contended that the search of the factory premises was not taken by the officers of the Central Excise in accordance with provisions of Rules 198 to 208 as they neither prepared Panchnama nor associated any witness. He has further submitted that the statement of the proprietor of the firm could not be taken into account for confirming the duty and the penalty, without seeking corroboration from any independent evidence. Therefore, the impugned order deserves be set aside/ in respect of confirmation of the duty.
3. Regarding the imposition of penalty, Ld. Counsel has contended that the firm and the proprietor both could not be penalised and since the duty was deposited before the issuance of SCN, no penalty could be even otherwise imposed legally. To substantiate this contention, Ld. Counsel has placed reliance on the judgment of the Tribunal (Chennai Bench) in the case of Dynamatic Technologies Ltd, v. CCE, Chennai, 2003 (54) RLT 675 wherein it has been observed that penalty will not be leviable when duty amount has been voluntarily paid before the issue of the SCN.
4. On the other hand Ld. DR has reiterated the correctness of the impugned order. He has also referred to Apex Court judgment in the case of Zunjarrao Bhikji Nagarkar v. UOI, 1999 (66) ECC 40 (SC): 1999 (112) ELT 772 wherein the imposition of penalty under Section 11 AC and Rule 173Q had been considered.
5. I have heard both sides and have gone through the record. So far as the contention of the Ld. Counsel that the search of the premises was not conducted in accordance with Rules 198 to 208 is concerned, the same cannot be accepted. The proprietor of the appellant's firm namely Shri Aaloke Surie was present at the time of visit of the Central Excise Officers to the factory. He at that time did not raise any objection regarding the mode and manner of the search. He, himself in his statement recorded on that date, admitted the suppression of the production and removal of the goods without payment of duty. He did not retract his confessional statement at any time. When he himself admitted the correctness of the search carried out by the officers at the site, in my view, the association of independent witnesses and preparation of the Panchnama, were not required. He admitted the evasion of the duty of Rs. 4,56,912 and deposited the same also. It is only for the first time in reply to the SCN he alleged that he was in a state of confusion, when he had made the confessional-statement, but the same, in my view, has been rightly brushed side being afterthought by the authorities below.
6. It is well settled that admission made by the maker can be accepted as a substantial piece of evidence under the law. He cannot be later on, permitted to turn round and deny that his admission was not voluntary, unless he is able to establish that the admission was extracted from him under coercion, duress, threat etc. This being the position in law, in my view, the admission made by Shri Aaloke Surie the proprietor of the appellant's firm which he never retracted by alleging to had been taken out from him, by beating, coercion, provided substantial piece of evidence for proving the allegations against him, as contained, in the SCN. He even deposited the duty amount without any protest. Therefore, the non-preparation of the panchnama and joining of the independent witnesses, under these circumstances, has got no bearing on the merit of the case.
7. Regarding the imposition of mandatory penalty under Section 11 AC, the contention of the Counsel, in my view, cannot be subscribed as it would only render the mandatory provisions of this Section nugatory, ineffective. The Apex Court in Zunjanao Bhikaji Nagar case (supra) has dealt with the provisions of this Section and Rule 173Q and observed that penalty is imposable under these provisions. Therefore, I must show my constraint to follow the observations of the Chennai Bench in Dynamatic Technologies Ltd. (Supra) detailed above. Even otherwise those observations that penalty under Rule 173Q and Section 11AC would not be leviable when duty amount had been voluntarily paid before issue of SCN, are not attracted the case of the appellants. The duty was never paid voluntarily. It was paid when they were caught by the Deptt. having evaded the duty. The evasion of the duty by them was also a deliberate act. Under these circumstances, to say that no penalty was leviable on the appellants, would not be justifiable in law and would only render the very provisions of Section 11AC and Rule 173Q reduntant and non-operational. Therefore, in my view penalty under both these provisions has been rightly imposed on the appellants.
8. However, keeping in view the facts and circumstances of the case, and the fact that appellants had deposited the duty after the raid, the penalty amount deserves to be reduced. The penalty under Rule 173Q read with Section 11AC imposed equal to the amount of duty, is, therefore, reduced to Rs. one lakh. Except for modification in the penalty amount, the impugned order is upheld and the appeal of the appellants accordingly stand disposed of.
Order dictated in the open Court.