2020 (3) TMI 901 - HC - Central Excise

High Court upholds CESTAT's findings on Central Excise duty demand, valid searches, and evidence reliability.

Balaji Metals Versus Commissioner of GST (East) Delhi.

The High Court dismissed the appeal, upholding the CESTAT's findings. The court found no substantial question of law, confirming the validity of the ... Clandestine removal - copper wires - demand based on various statements - retraction of statements - HELD THAT:- There existed no evidence of threat or coercion on the proprietor of the Appellant firm in recording of the statement of 8th November 2011.Since, no cogent ground for the same has been adduced before us to buttress the same, a mere allegation of the same at this same is ill-conceived. Moreover, the proprietor in the subsequent statements has reiterated the same with minor retractions, and thus it would be far-fetched to hold that there had been gross duress on the proprietor of the Appellant at every instance of tendering his statements on various dates. The counsel of Appellant before the appropriate forum, himself had agreed to proceed with the case without waiting further for cross examination of Panchas, and thus, once the adjudicatory authority had proceeded to adjudicate on such a premise, the Appellant, before us cannot invoke the ground of not cross examining the Panchas at such an appellate stage merely because the adjudication did not result in his favour - In light of the observations by CESTAT, the question as to whether the searches conducted on 8th November 2011 are illegal is purely a question of fact which has been sufficiently dealt with by the CESTAT. Thus the consequent question of whether the documents recovered during the searches can be relied upon to come to a conclusion, does not present itself. In the matter of RELIANCE CABLE INDUSTRIES VERSUS COMMISSIONER OF GST (EAST) DELHI [2018 (11) TMI 1147 - DELHI HIGH COURT] which arises from the search and seizure conducted concurrently with search and seizure on premises of the Appellant therein, this court dismissed the Appeal filed, noting that the question of law raised by the Appellant were purely factual and no interreference was merited by this court. Appeal dismissed - decided against appellant. Issues Involved:1. Legality of searches conducted at the factory and residential premises.2. Reliance on documents recovered during searches.3. Validity of statements made by the proprietor under Section 14 of the Central Excise Act.4. Reliance on a chart for confirming the demand of Central Excise duty.5. Confirmation of Central Excise duty based on a retracted statement.6. Reliance on evidence from third-party premises.7. Opportunity for cross-examination of witnesses.Issue-wise Detailed Analysis:1. Legality of Searches:The Appellant contended that the searches conducted at their premises were in violation of Section 18 of the Central Excise Act, 1944, read with Section 100 of the Criminal Procedure Code, 1973, as they were conducted in the absence of Panch witnesses. The High Court noted that the CESTAT had already addressed this issue, stating that the Appellant admitted the recovery of documents during the searches in their statements, and thus, the question of the legality of the searches did not present itself as a substantial question of law.2. Reliance on Documents Recovered:The Appellant argued that the documents recovered during the searches should not have been relied upon due to the alleged illegality of the searches. The High Court upheld the CESTAT's finding that the Appellant had admitted the recovery of documents in their statements, and the retraction of these admissions was seen as an afterthought. Therefore, the documents were validly relied upon.3. Validity of Statements:The Appellant claimed that the statements made by the proprietor under Section 14 of the Central Excise Act were involuntary and made under threat and coercion. The High Court agreed with the CESTAT's observation that there was no evidence of threat or coercion, and the proprietor had reiterated the admissions in subsequent statements with minor retractions. Thus, the statements were deemed valid.4. Reliance on Chart:The Appellant contended that the chart relied upon in the Show Cause Notice was different from the one shown during the recording of statements. The High Court found that the CESTAT had sufficiently addressed this issue, noting that the Appellant had admitted the recovery of documents and the clandestine removal of goods. The chart was thus considered reliable evidence.5. Confirmation Based on Retracted Statement:The Appellant argued that the demand of Central Excise duty was confirmed based on a retracted statement. The High Court upheld the CESTAT's finding that the retraction was an afterthought and that the statements made by the proprietor were consistent and corroborated by other evidence. Hence, the demand was validly confirmed.6. Evidence from Third-Party Premises:The Appellant challenged the reliance on evidence recovered from the premises of M/s Reliance Cable Industries. The High Court noted that the CESTAT had found corroboration of the clandestine removal of goods through the records of M/s Reliance Cable Industries and statements of its proprietor. Thus, the evidence from third-party premises was validly considered.7. Cross-Examination of Witnesses:The Appellant contended that the Commissioner had declined the opportunity to cross-examine witnesses. The High Court observed that the CESTAT noted that numerous opportunities were given for cross-examination, and the Appellant's counsel had agreed to proceed without further cross-examination. Therefore, the plea of denial of cross-examination was not sustained.Conclusion:The High Court dismissed the appeal, finding no substantial question of law. The court upheld the CESTAT's reliance on the documents recovered, the statements made by the proprietor, and the corroborating evidence from third-party premises. The court also noted that the Appellant had agreed to proceed without cross-examination, and the searches were not deemed illegal.