TaxTMI 
TaxTMI 
2009 (7) TMI 1125
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....wing only a part of the actual sale consideration in their invoices and thereby had evaded central excise duty amounting to Rs. 44,34,843/- (Rupees forty four lakh thirty four thousand eight hundred and forty three only) on the clearances effected from 07/2004. An amount of Rs. 5,00,000/- (Rupees five lakhs only) paid by the appellant-company, was proposed to be appropriated towards the said demand. Interest under Section 11AB was also demanded and penal clauses against the appellant company as well as the Director were invoked. The adjudicating authority vide the impugned order, confirmed the said demand along with interest, appropriated the amount already paid and imposed penalty equivalent to the duty amount under Section 11AC of the Central Excise Act, 1944 but refrained from imposing penalty under Rule 25 of Central Excise Rules, 2002. A penalty of Rs. 15,00,000/- (Rupees Fifteen lakh only) was imposed on the appellant Director, under Rule 26 of Central Excise Rules, 2002. Aggrieved by such an order of the Adjudicating Authority, the appellant-company and the Director of the appellant company filed appeals before the learned Commissioner (Appeals). Learned Commissioner (Appeal....
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....umar Tantia do not form part of the proceedings initiated by the impugned show cause notice. The Appellants submit that the said loose slip is not admissible as evidence against the Appellants for the following reasons : (a) Mahazar dated 23-12-04 drawn at the residence of Sri Pradeep Tantia states that the Inspector informed the witnesses that some incriminating documents pertaining to production, clearance and sale of goods in respect of M/s. Cauvery Laminates Pvt. Ltd having factory at 14B, Jigani Industrial Area, Bangalore. The Mahazar itself states that the documents recovered relate to investigations of an entirely different manufacturer, (b) The handwritten slip is not signed by the Mahazar Witnesses, or Smt. Sunita Tantia or Sri Pradeep Tantia evidencing its recovery from the residence of Sri Pradeep Tantia on 23-12-2004, (c) Sri Pradeep Tantia is not a Director or employee of the Appellant Company, (d) The Investigating authority has not recorded the statement of Sri Pradeep Tantia or Smt. Sunita Tantia to prove that the said slip was recovered from their residence and that it was relatable to the goods manufactured by ECO and sold to....
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.... and above the invoice value. He would submit that the Revenue has failed to prove beyond doubt the charges levelled in this case. 6. Learned SDR on the other hand would submit that the claim of the appellant is totally incorrect. She would submit that the chit which has been recovered by the authorities, clearly indicates the quantity which has been cleared to M/s. Manjunatha Plywoods and the said clearance tallies with the invoices issued by the appellant. She would draw our attention to paragraphs 3 and 4 of the show cause notice to indicate that there is a connection between the slip and the invoice issued by the appellant. It is her submission that the slip was recovered from the residence of the person who was the brother of appellant. It is her submission that the dealers who have given their statements have retracted their statements after a lapse of time. It is her submission that this law is clearly settled by the Hon'ble Supreme Court in the case of Vinod Solanki v. Union of India as reported at 2009 (233) E.L.T. 157 (S.C.) = 2009 (13) S.T.R. 337 (S.C.), Kiran Fashions v. Union of India as reported at 2009 (233) E.L.T. 461 (Guj.) = 2009 (13) S.T.R. 502 (Guj.) an....
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....written in his hand as seen on 20-7-2006. We find that after such entries of Sri Pramod Kumar Tantia, there is something written below, we are not able to appreciate how a person would put his signature as seen in between figures. Be that as it may, we find from the Mahazar dated 23-12-2004 that the said Mahazar was drawn in the presence of wife of Sri Pradeep Kumar Tantia, (which is annexed at page 118 of the paper book), clearly indicates that "the said inspector informed us that some incriminating documents pertaining to production, clearance and sale of goods in respect of M/s. Cauvery Laminates Pvt. Ltd. having factory at No. 14B, 1st Main Road, Jigani Industrial Area, Anekal Taluk, Bangalore are suspected to be secreted in the said premises and he intended to search for the same". It is undisputed by the Revenue that the said slip which is herein above reproduced, was recovered from the premises of Sri Pradeep Kumar Tantia by the Mahazar dated 23-12-2004. We find that the revenue authorities have not recorded any statements of the said Sri Pradeep Kumar Tantia as regards the slips which were produced as a evidence against the current appellant. In the impugned order, we find ....
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....llants. We also note that these statements of buyers were recorded by the Revenue officers when the investigation was being carried out, but were not relied upon, as these statements were not implicating the appellant-company. This itself indicates that charge of undervaluation against the appellant, cannot be established, as the statements which exonerate the appellant-company were of dealers, who purchased substantial quantity of goods from appellant-company. 13. We find that this issue is now squarely settled by the decision of the Bench in the case of Hunsur Plywood Works Pvt. Ltd. (supra). We may read the said ratio : We have gone through the records of the case carefully. The three important charges in the Show Cause Notice are (i) Under-valuation (ii) Mis-declaration of description of the goods cleared (iii) Misdeclaration of the quantity of the goods cleared. A search of the factory was carried out on l7-2-99. Many documents were seized under Mahazar dated 17-2-99. A-Show Cause Notice was issued on 5-8-99 and the same was not adjudicated, that Show Cause Notice actually demanded duty on the goods seized on 17-2-99, there does not appear to be any allegation of un....
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....s duly signed to the Asst. Commissioner (Prev.) recorded in his statement. If the Revenue officers are to establish the duty evasion properly, they should have taken care to comply with the provisions of Section 100(5) of Cr. PC, which was mentioned supra in the learned Advocate submissions. When the search was made, a list of all the things: seized in the course of the search should be prepared by the officer and it should also be signed by witnesses. In this case, the most crucial documents relied on by the Revenue are the so-called Premium Sheet and the Katcha Slips but they do not find mention in the Mahazar. If the Premium sheet had been recovered on 17-2-99, we do not understand what prevented the officers for mentioning it in the Mahazar. As such in our view, the Premium Sheet as well as the Katcha Slips are not reliable evidences in this case to sustain the charge of under-valuation. Moreover, the statements given on 18-2-99 have been retracted, there is an allegation that the statements were given under duress and coercion. Under these circumstances, we cannot place much reliance on the so-called premium sheets and katcha slips to sustain the charge of undervaluation. Even....
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....sed person cannot be treated as substantive evidence and can be pressed into service only when the court is inclined to accept other evidence and feels the necessity of seeking for an assurance in support of the conclusion deducible therefrom. [See Haricharan Kumari etc. v. State of Bihar - AIR 1964 Supreme Court 1184; Haroom Haji Abdulla v. State of Maharashtra - AIR 1968 Supreme Court 832 = 1999 (110) E.L.T. 309 (S.C.); and Praash Kumar alias Prakash Bhutto etc. v. State of Gujarat - (2007) 4 SCC 266]. We may, however, notice that recently in Francis Stanly @ Stalin v. Intelligence Officer, Narcotic Control Bureau, Thiruvanthapuram [2006 (13) SCALE 386], this Court has emphasized that confession only if found to be voluntary and free from pressure, can be accepted. A confession purported to have been made before an authority would require a closure scrutiny. It is furthermore now well-settled that the court must seek corroboration of the purported confession from independent sources". 13.2. In the current case before us, the evidences which were produced and relied upon by the lower authorities to confirm the charge of undervaluation, do not prove charge of undervaluaiton....