2010 (2) TMI 308 - HC - Central Excise

Tax Appeal Dismissed Due to Lack of Evidence | High Court Upholds Tribunal Decision

The Tax Appeal filed by the Commissioner of Central Excise was dismissed by the Tribunal due to the lack of evidentiary value of a partner's statement. ... Clandestine removal- In this case Tribunal observed that “the statement submitted by the respondent giving details of job work has not been verified by the department at all. In the absence of any investigation and verification conducted by the Revenue, the contention of the respondent that the shortage was actually not a shortage but had arisen because that portion represented goods manufactured on job work basis, has to be accepted. Held that- there is no substantial question of law arise, thus dismiss the appeal. Issues:1. Dismissal of appeal by Tribunal based on evidentiary value of partner's statement.2. Alleged error by Tribunal in findings contrary to precedent.Issue 1: Dismissal of appeal by Tribunal based on evidentiary value of partner's statementThe Commissioner of Central Excise filed a Tax Appeal under Sec. 35-G of the Central Excise Act, 1944, questioning the Tribunal's dismissal of the department's appeal. The appeal raised concerns regarding the evidentiary value of an unretracted statement made by Mr. Bhupendra Maganlal Vashi, a partner of the respondent unit, recorded under Section 14 of the Central Excise Act, 1944. The Tribunal's decision was based on the partner's lack of awareness of Central Excise law and procedures, coupled with the department's failure to record a statement from the partner responsible for record maintenance. The Tribunal noted that the department did not verify the statement submitted by the respondent regarding job work details. It was observed that had statements been recorded from the partner responsible for maintaining central excise records, the truth about the job work being undertaken would have been revealed. Due to the absence of proper investigation and verification by the Revenue, the contention that the shortage was due to goods manufactured on a job work basis was accepted.Issue 2: Alleged error by Tribunal in findings contrary to precedentThe Tribunal's order highlighted that the partner's statement, the lack of verification by the department, and the absence of investigation led to the acceptance of the respondent's explanation regarding the shortage of goods. The Tribunal's findings were based on factual determinations and did not give rise to any substantial questions of law. Consequently, the High Court summarily dismissed the appeal, emphasizing that the Tribunal's conclusions were findings of fact and did not warrant further legal scrutiny. The Tribunal's decision was upheld, indicating that the issues raised did not amount to substantial errors of law as contended by the appellant.This comprehensive analysis of the judgment addresses the dismissal of the appeal by the Tribunal based on the evidentiary value of the partner's statement and the alleged error in the Tribunal's findings contrary to precedent. The detailed examination of each issue provides a clear understanding of the legal reasoning and conclusions reached by the High Court in this case.