TaxTMI 
TaxTMI 
2012 (2) TMI 412
X X X X Extracts X X X X
X X X X Extracts X X X X
....-tax (Appeals)-II, Ludhiana, has erred both in law and on facts by ignoring the statement of Sh. Kulbhushan Kumar Jain, director of the company recorded during the inspection made by the customs and Central excise authority which was subsequently retracted, whereas such retraction is contrary to the judgment of the hon'ble Supreme Court in the case of Surjeet Singh Chhabra v. Union of India [1997] 1 SCC 508, 509. in which it was held that the customs officers are not the police officers therefore the confession made before the customs officer even though retracted, is in admission and binds the petitioner." The brief facts of the case are that the assessee is engaged in the manufacture of ingots from iron scrap and its trading. The Assessing Officer received information from Central Excise (Preventive), Ludhiana through the office of the Director of Income-tax (Investigation), Ludhiana regarding removal of goods worth Rs. 4,19,12,650 involving the Central excise duty of Rs. 67,06,024. Statement of Shri Kulbhushan Kumar Jain, one of the directors was recorded during the course of inspection at the assessee's factory premises. The Assessing Officer noted from the perusal of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arned authorised representative for the assessee before the Commissioner of Income-tax (Appeals) was that it was maintaining the quantum records in respect of the purchases of raw material, its consumption and production and also was maintaining dayto-day stock register, which was under the control and check of the excise authorities and no discrepancy was found in the same. Further, even during the course of inspection no document was found indicating any purchases or sales outside the books of account. Further the accounts of the assessee were audited. The Commissioner of Income-tax (Appeals) found merit in the aforesaid contention of the assessee. It was further noted by the Commissioner of Income-tax (Appeals) that the statement recorded of the director of the company was retracted on the second day of the inspection itself and it was claimed that the said statement was recorded under duress and pressure. In view of the retraction, the Commissioner of Income-tax (Appeals) observed that addition could not be made on the basis of the original statement without bringing on record any material or evidence to show, (a) that the retraction was not justified ; (b) the facts in the ori....
X X X X Extracts X X X X
X X X X Extracts X X X X
....884 and 885/2006 (date of hearing September 6, 2011) the hon'ble Tribunal has held that there was no evidence found to show either suppression of purchase of input or clandestine removal of goods. The learned authorised representative for the assessee further pointed out that even in the case of sister concern, Arora Alloys Ltd. [2011] 12 ITR (Trib) 263 (Chandi), the deletion of addition by the Commissioner of Income-tax (Appeals) has been upheld by the Tribunal. The learned Departmental representative for the Revenue pointed out that during the course of inspection by the Customs and Excise Department, the total production was checked and in view of the capacity of the furnace of the assessee and the statement recorded of the director of the assessee-company, suppression in production was detected and addition was made by the Assessing Officer. The learned Departmental representative for the Revenue, however fairly admitted that Customs, Excise and Service Tax Appellate Tribunal had allowed the claim of the assessee. The learned authorised representative for the assessee in reply pointed out that the addition in the present case was on the inspection of the fac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd Service Tax Appellate Tribunal after considering the factual aspects of the case, the quantum of production, the consumption of electricity observed that there is nothing on record to show that high power connection supported by evidence was made on a particular date and that resulted in higher amount of production. It was further observed by the Customs, Excise and Service Tax Appellate Tribunal vide paragraph 4.2 that so far as the production quantum is concerned, there is also no evidence on record to show that the authorities intervened lawfully recording the output in the presence of witness. The Customs, Excise and Service Tax Appellate Tribunal held that therefore, a hypothetical case appears to have been made by the Revenue in excessive exercise of its jurisdiction to the detriment of justice. The Customs, Excise and Service Tax Appellate Tribunal further considered the retraction statement of the director of the assessee-company and vide paragraph 6 held as under : "6. We would have certainly come to the rescue of Revenue had the statement been recorded in a manner known to law and cogent evidence had been brought to record to prove output cleared clandestinely. No c....