2023 (6) TMI 452 - AT - Central Excise

Tribunal affirms duty & penalties for snuff duty evasion, citing lack of evidence.

Ranchhoddas Zinabhai Dholakia Versus C.C.E. & S.T. -Bhavnagar, Navinchandra Purushottambhai Dholakia C.C.E. & S.T. -Bhavnagar, Jayeshbhai Niranjanbhai Dholakia Versus C.C.E. & S.T. -Bhavnagar

Ranchhoddas Zinabhai Dholakia Versus C.C.E. & S.T. -Bhavnagar, Navinchandra Purushottambhai Dholakia C.C.E. & S.T. -Bhavnagar, Jayeshbhai Niranjanbhai ... Issues Involved:1. Alleged evasion of Central Excise Duty by clandestine removal of snuff.2. Validity and interpretation of 318 chits found at the appellant's premises.3. Retraction of statements and its evidentiary value.4. Corroborative evidence and burden of proof in cases of alleged clandestine removal.Summary:1. Alleged Evasion of Central Excise Duty:The appellant was accused of evading Central Excise Duty by clearing snuff without payment of duty, as per the Order-in-Original dated 31.03.2009. The Commissioner confirmed the demand of Rs. 1,19,92,836/- as excise duty, confiscated cash and snuff, and imposed penalties on the appellant firm and its partners.2. Validity and Interpretation of 318 Chits:The appellant contended that the 318 chits recovered from their premises were related to the payment for job work and not for clandestine removal of snuff. They argued that these chits contained details of finished goods snuff received back from the job workers, not clearances from the factory. However, the Tribunal found no merit in this contention, noting that the appellant's accounts clerk, Shri Vimalbhai Mavani, stated that no raw materials were delivered under these chits to any job worker.3. Retraction of Statements and Its Evidentiary Value:The appellant argued that the statements of Shri Navinbhai P. Dholakia, recorded on 14.06.2006, were retracted and thus should not be used as the basis for the findings. The Tribunal, however, held that the retraction was not made to the authority who recorded the original statement and considered it an afterthought. The Tribunal cited several judgments to support the view that retracted statements, if made voluntarily, hold evidentiary value.4. Corroborative Evidence and Burden of Proof:The Tribunal emphasized that the entire case was based on the 318 chits and the statements recorded during the investigation. They noted that the appellant failed to provide corroborative evidence to substantiate their claim that the chits were for job work payments. The Tribunal highlighted the lack of job work challans and the absence of entries in statutory records as indicative of clandestine activities. The Tribunal also considered the seizure of cash and excess stock of snuff as supporting evidence for the charge of clandestine removal.Conclusion:The Tribunal rejected the appeals, finding sufficient evidence to sustain the charge of clandestine removal against the appellant, including the statements, seizure of cash, and excess stock of snuff. The Tribunal upheld the Order-in-Original, confirming the demand for duty and penalties imposed on the appellant and its partners.