TaxTMI 
TaxTMI 
2018 (6) TMI 1342
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.... companies and the directors, employees, etc.. This is the second round of litigation. 2. Earlier this matter had come before this tribunal and vide final order dated 31/12/2012 this tribunal had allowed the appeals by way of remand observing - "after appreciating the submissions made by both the sides we find that directions were earlier revenue to supply all the requisite documents to the appellants." In terms of the said directions Revenue has supplied all the data which fact also stands agreed-upon by the Ld. Counsels. As regards non-RUDs we have examined the list produced by the Ld.Advocate appearing for the Revenue. The preamble of the said list reveals that the said documents were supplied on 19/12/2011 whereas the signatures of Shri Atul Kumar Gupta, Liaison Officer appearing on the acknowledgement are 28/09/2011 i.e. before the date on which the said documents were supplied to the appellant. As such, the Revenue's contention that their authorized signatory has given acknowledgement for receipt of all the non-RUDs, cannot be accepted for the obvious reason that the signatures are dated 28 September 2011, whereas the documents were handed over on 19/12/2011. ....
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....ails of disallowance as regards these appellants are as follows: - Name of the Appellant Demand raised in SCN (Rs.) CENVAT Demand (Rs.) Penalty (Rs.) M/s.Parmarth Iron Pvt.Ltd. 65,47,51,765 10,11,890 65,47,51,765 10,11,890 M/s.Parmarth Steel & Alloys (P) Ltd. 22,91,55,651 22,91,55,651 Shri Lalit Kumar Agarwal 2,00,00,000 Shri Sanjay Agarwal 1,00,00,000 Shri Raj Kumar Agarwal 1,00,00,000 Priyansh Agarwal Legal heir of Raj Kamal Agarwal 2,00,00,000 Priyansh Agarwal Legal heir of Raj Kamal Agarwal 2,00,00,000 M/s.Kamakhya Steels Pvt.Ltd. 6,76,31,129 6,76,31,129 5. The facts in brief are that are Parmarth Iron Pvt.Ltd., Biznor, U.P. (hereinafter referred to as PIPL) were registered under the Central Excise provisions and were engaged in manufacture of MS Bars, End Cutting, MS Ingots, Runner and Risers etc.. On the basis of intelligence that PIPL were evading Central Excise duty by undervaluation and clandestine removal, a search and seizure was conducted in their premises on 10/07/2007. The sea....
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....final products allegedly cleared by them without payment of duty during the period from February 2004 to July 2007 along with interest alleging inter-alia : - (1) That they cleared the final products without payment of duty of excise and without issue of invoices during the said period, meaning thereby that they had suppressed the facts from the Department. (2) That they had not reflected the actual production of final products in their production/stock registers during the said period as huge quantities of their final products were cleared by them from their factory clandestinely without recording the same in their production/stock registers thereby suppressing their production. (3) That they had suppressed the production of the finished goods and cleared the same clandestinely without issue of bills and without reflecting the requisite details of the same in their monthly ER-1 returns, thereby making willful mis-statement. (4) That they have contravened the provisions of Central Excise Act and Central Excise Rules read withCenvat Credit Rules with intent to evade payment of duty. And (5) That the fact of non-payment of duty am....
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.... Hon‟ble High Court was pleased to give directions as noticed herein above. In absence of any challenge to the directions in the judgement of Hon‟ble Allahabad High Court, the same is stated to have become final and binding on the parties. (2) Thus the impugned order-in-original is directly in teeth of the judgement of Hon‟ble Allahabad High Court as well as the Final Order in the earlier round of this Tribunal inasmuch as Ld.Commissioner have extensively relied upon the statement of aforesaid five persons without providing opportunity of cross-examination of these persons. Even otherwise as per the Department's own case Shri Manmohan Gautam and Shri Bhagirath Roy were authors of daily sales Registers on the basis of which entries were made by them in computers installed at H-8, Geeta Nagri, Bijnor. Similarly 3 persons at Ghaziabad were authors of the documents resumed from office at Navyug Market, Ghaziabad. Once this is so, then cross-examination of these persons was mandatory as they were the authors of documents relied upon by Revenue. The Ld.Counsel have relied upon the ruling of Hon‟ble Supreme Court in the case of Bareilly Electricity Sup....
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....tice on them. The learned Counsel argued that this contention of the Ld. Commissioner is not tenable as they were the witnesses of Revenue and as such it was incumbent upon Revenue to produce and examine such persons in the course of the adjudication proceedings and further offer them for cross-examination. The Ld.Counsel also relied upon the ruling in the case of CCE Vs. Vishnu & Co. Pvt. Ltd [2016(332) ELT 793 (Del.)] wherein the Delhi High Court was considering the issue of clandestine removal and the questions framed by the Hon‟ble High Court was - "whether statements recorded under provisions of Section 14 of Central Excise Act by the office of the Department can be taken as proof of the statutory violations by the respondent assessee. Further whether the CESTAT was justified in setting aside the case, demand, redemption fine and confiscation of goods by ignoring material facts and further whether the CESTAT was justified in ignoring the entire facts on record and the statements of the witnesses and concerned persons". The Hon'ble High Court held that the contention that it is the responsibility of the noticee/assessee to produce the witnesses for cross-examination i....
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....relied upon by the Revenue. It have been repeatedly held so by this Tribunal and the High courts. (5) Reliance has also been placed on the ruling in the case of Kiran Nagindas Vora vs. CC 2015 (322) ELT 97 (Bom.-High Court) wherein the Hon'ble High Court in Para 14 of the judgment have observed - "what is evidence is something about which party has given a writing in the form of an affidavit. Further such party is in cross-examined by the opponent orthe adversary against whom the statement or material is sought to be relied upon. If the veracity of these tested in the cross-examination and the party stand the same then alone the version is found in the affidavit or the recorded statement can be termed as evidence and accepted and relied upon by an Adjudicating Authority." (6) So far the alleged confession of suppliers of MS Ingots and buyers of saria/rods is concerned the appellant had sought cross-examination of 68 persons whose statements had been relied upon by the Revenue. These 68 persons include the five aforementioned persons whereas remaining 63 persons were alleged suppliers of MS Ingots and/or buyers of saria/rods. It was the responsibility ....
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....have subsequently retracted the earlier statements. It is a settled law that the statements which have been retracted, cannot be relied upon as a substantive piece of evidence. Reliance is placed on the ruling in the case of CCE vs. Vishnu & Company Pvt. Ltd., reported in 2016 (332) ELT 793 (Del.) (10) So far the charge of clandestine removal against „Parmarth Iron‟ is concerned, the same is baseless. It is a settled law that clandestine removal is a serious charge, which is required to be discharged by production of sufficient and tangible evidence in the nature of purchase of raw material, use of electricity, additional labour, sale of final product, clandestine removal, mode and flow of funds etc. Reliance is placed on the ruling of Hon‟ble Allahabad High Court in the case of Continental Cement Company vs. Union of India reported in 2014 (309) ELT 411(Alld.-HC). The Hon‟ble High Court have observed - further, unless there is clinching evidence of the nature of purchase of raw material, use of electricity, sale of final products, clandestine removal, the mode and flow back of funds, demands have been confirmed solely on the basis of presumptions a....
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....unted in view of Section 8A and 13 A of U.P. Trade Tax Act, 1948, which provided for proper accountal and record of movement of goods from one dealer to another within the State of U.P. and on failure of which a dealer is subject to harsh penalty. (14) In the show cause notice it is alleged that there is clandestine removal of MS Bars to the tune of Rs. 701 crores. Repeating the provisions for use of road permit, the learned counsel states that there are similar provisions for use of road permit in other States also, which provide that the buyer purchasing interstate must use declaration form for import of goods as prescribed in their State. Further in view of State provisions of under Section 8 A read with Section 13 A of the U.P. Trade Tax Act, there is no such incident of seizure found and/or recorded in the assessment order passed under the U.P. Trade Tax Act, 1948. Had the appellant been engaged in clandestine removal at a scale as alleged, there would have been several instances of violations under the State VAT laws. (15) The learned counsel further urges that for the alleged clearance to the tune of Rs. 701 crores, receipt of only Rs. 85 crores is alleged ....
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....e of a document executed and, attested that it was executed or attested either by person by whom it purports to have been so executed or attested; (b) admit the document in evidence notwithstanding that it is not duly stamped, if such document is otherwise admissible in evidence. The learned counsel states that the said provision is applicable in case of prosecution and not in case of adjudication. Reliance is placed on the ruling in Ballarpur Industries Ltd vs. Union of India 1991 51 ELT 30 (Bombay High Court) wherein the Hon'ble High Court in Para-38 of its judgment have observed - it is clear that the said section deals with a presumption in respect of a document tendered in evidence in prosecution. The said section is therefore not applicable in cases of other enquiries. Even in the case of prosecution the presumption raised is not an irrebuttable presumption but is a rebuttable presumption, as it is clear from the phraseology used therein, "unless the contrary is proved by such person". It is not, therefore, open to the respondent-Revenue to urge on the basis of Section 36 A that the presumption about the documents raised thereunder is conclusive, much less in the case of ....
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.... (21) The learned counsel further urges that the amount of Rs. 1.78 crores found and seized at the time of search/inspection was not the sale proceeds of clandestine removed excisable goods but was advance received in respect of „agreement to sale‟ of immovable property and the said agreement had also been produced in the adjudication proceedings before the learned Commissioner, but the same was brushed aside arbitrarily. In view of this contention, this Tribunal vide Interim Order No. 25/2017 dated 07 November, 2017, directed Revenue to submit a report as to whether said Notification No. 68/63 - CE is further amended subsequent to 02 September, 1997, and if so the most recent amended copy of the said notification may be submitted. We also directed Revenue to submit a report on whether said amount of Rs. 1.78 crores was deposited with bank in term deposits and if so Revenue may report total interest earned on the said till date, calling for the report to be submitted on or before 29 November, 2017. In reply the Assistant Commissioner, Central Goods and Service Tax, Meerut by his Letter No. C. No. V (15) REV - 1/CESTAT/19/15 dated 29 November, 2017, have repli....
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....n to refund money received and retained without right implies and carries with it the right to interest. Whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course". 11. Shri S.K.Mathur, Advocate, who is also appearing for Appellants has contended that following prosecution witnesses were not produced for cross examination by Revenue and they are Shri Manmohan Gautam and Shri Bhagirath Roy, Shri Mohan Aggarwal, Cashier, Shri Mukesh Chaudhary, Sales Executive, Shri Pankaj Aggarwal and Shri Rajesh Sharma and Shri Shravan Kumar Singhal partner of S.M. Computers and Shri Ram Mohan Jindal-Landlord of premises at Geeta Nagri, Bijnore. He has further contended that statements of the above stated persons are not admissible in evidence, in view of the ruling of Hon‟ble Allahabad High Court, in the appellants case. Therefore, all the evidence relied upon by relying on the statements recorded in respect of above stated persons, are not the piece of evidence and, therefore, any finding arrived at on the basis of statements of the above persons during investigation, is not sustainable, in view of clear ....
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...., there were many hard disks and CDs, but a particular hard disk was picked up by the Investigating Officers, which arise suspicion that the said hard disk was planted by the Investigating Officers at the premises, which was not taken on rent by the appellants, and which was not a part of the factory premises or registered office of the appellant, and it was seized from such persons who were not on the pay-roll of the company and, therefore, he has argued that the entire allegation by Revenue is Pre-planned by Investigating Officers against the appellant (s). 12. As regards Parmarth Steel & Alloys (P) Ltd., the learned Counsel states and adopts the arguments made in the matter Parmarth Iron Pvt. Ltd. They further added that admittedly no incriminating documents were found by the Investigating Officers during search in the premises of Parmarth Steel. The demand of duty is confirmed in the impugned Order-in-Original, solely based on the statement of one Shri Sheru Malik, Aas Mohd. & Idris, who were not produced by Revenue for examination and cross-examination in the adjudication proceedings. Hence in view of the law discussed hereinabove, the demand of duty based on their statemen....
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....er, 2004 to March, 2005 the Department demanded duty vide separate show cause notice and obviously for several reasons. Surprisingly there is no mention in the subsequent show cause notice about the earlier notice and as such the whole allegation against them is bad and ab-initio void. It is further pointed out that the ruling in the case of R.A. castings have been upheld by Hon'ble Allahabad High Court. It is further urged that in the course of investigation in the premises of Kamakhya Steel, no incriminating documents were found and/or seized. The whole allegation and confirmation of demand by Revenue is by way of third-party evidence, and the statement of the said Shri Sheru Malik and Idris. As these persons have not been examined in the adjudication proceedings, thus the demand against them is not sustainable and accordingly prays for setting aside the demand and penalty. 16. The Learned A.R. for Revenue has argued as follows:- 16.1 The present appeals have been preferred against OIO No. 23/Commr./M-I/2014 dated 23.06.2014 passed by Commissioner, Customs and Central Excise, Meerut-I, in respect of M/s Parmarth Iron Pvt. Limited, 10th KM Stone, Nagina Road, Bijnore(U.P....
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....garwal, the Directors of M/s PIPL on 11.07.2007 and 12.07.2007.The said hard disc contained the complete data relating to sales and purchases, since inception of M/s PIPL i.e. February 2004 till date of search i.e.10.07.2007. 16.6 The case is based on records resumed from factory and office premises of M/s PIPL, residential premises of directors of M/s PIPL, business premises of suppliers of M.S. Ingots, business premises of buyers of „saria‟, records summoned from suppliers of M.S. Ingots and buyers of „saria‟, statement of directors of M/s PIPL, suppliers/manufacturers of M.S. Ingots, buyers of „saria‟ etc and others supported evidence, as detailed in the SCN and discussed in the OIO. After extensive investigation, the above referred SCN was issued and adjudicated vide impugned OIO. 16.7 Following issues were found to be involved in the case by adjudicating authority- (1)Whether during period from 02/2004 to 07/2007 M/s PIPL and M/s PSAPL were engaged in production and removal of excisable goods without its accountal in statutory records, without issue of invoices and without payment of central excise duty payable thereon? (2) Wheth....
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....n relied upon. The entries contained in resumed records also tally with the print outs of the data retrieved from the hard disc recovered from the computer installed at premises located at Ist floor,H-8,Geeta Nagari, Bijnore, which confirms that the data retrieved from the said hard disc pertains to M/s PIPL. The ownership of computer system from which said hard disc was retrieved, was purchases by M/s PIPL from M/s S.N. Computers, Muzaffarnagar and the premises from where it was recovered was in possession of M/s PIPL. The sale of said CPU is also corroborated by statement dated 20.08.07 of Sh. Shravan Kumar Singhal, partner of M/s S.N. Computer. The statement of the owner of the premises and ownership of the scooter parked at Geeta Nagari also corroborate that the said premises was in possession of M/s PIPL. The premises at Geeta Nagari was used as office premises of M/s PIPL and the hard disc resumed from the said premises containing the relied on data were records pertaining to sale and purchase made by M/s PIPL during the period in question. The computer hard disc bearing No.ST340015A SIN 5LASRI3 resumed during search at the premises at H8, Geeta Nagari, Bijnore was seal....
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....retracted after 05-06 years (without any reasonable grounds) while submitting defence replies or during the course of cross examination are unreliable, cannot be accepted. Further, deposition made by director of M/s PIPL and other suppliers and proprietors/partners/employees of traders/buyers of M/s PIPL in their initial statements, found corroboration with data retrieved from Hard Disc resumed from premises at H8, Geeta Nagari, Bijnore. Hence, initial statements are reliable evidences given under Section 14 of Central Excise Act,1944, and admissible as evidence. (C) Regarding non-admissibility of statements of some vital witnesses including the 08 Panchas for their non-production/non-availability for cross examination - The witnessing of the panchanama proceedings at the relevant time by Panch witnesses who could not be found or whose presence could not be obtained for cross examination for want of their present locations, was legally proper in the eyes of law. (D) Regarding allegations of manipulations/tempering by investigating officers and denial of cross examination of departmental officers-. M/s PIPL also sought the cross examination of Departmental officers, whic....
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....as categorically admitted the facts divulged in the statements of the manufacturers/brokers and has thus admitted the the fact of the receipt of the unaccounted M.S.Ingots supplied by the manufacturers directly or received by M/s PIPL through brokers, as appearing in the said purchase ledgers of the said suppliers/brokers maintained by M/s PIPL. Shri Lalit Kumar Agarwal in his statement dated 11.07.2007,24.09.2007 and 12.06.2007 has concurred with the statements of Shri Man Mohan Gautam dated 10.07.2007, Shri Mukesh Chaudhary dated 22.08.2007 and Shri Shamshad Ahmad dated 05.10.2008 and has also deposed that the cash received from the sale of goods without invoice was used for payment of raw materials which they purchased without invoice; that in case of sale to dealers/ market, the rates of saria were more than the rates shown in the invoices and the excess amount was taken in cash, and the difference in such rates was appro.Rs.2000/ per MT... When sellers and buyers have admitted the transactions to have taken place between them, nothing remains to be inferred and only plausible explanation that can be given is that clandestine removal of goods, not accounted for in the record....
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....n of M/s PIPL shows an average consumption of 34.57 liters of furnace oil for manufacture of one MT of saria. The directors have stated that an average of 30-35 liters of furnace oil was consumed for production of one MT of Saria. M/s PIPL has grossly suppressed the actual purchase and consumption of furnace oil. Total recorded purchase of furnace oil is 91,36,627 litres during the period from February, 04 to June, 07 out of which consumption is shown as 88,42,091 litres. The computer hard disc purchase ledger accounts show the purchase of Furnace oil during said period as 95,23,924 litres. Hence, during the period, 3,87,297 ltrs of furnace oil were not accounted for which was purchased clandestinely. The actual receipt and consumption of furnace oil with the average consumption of 34.57 litres per MT would have yielded 2,69,028 MT of Saria which is commensurate with the production of 2,88,218.57 MT appearing in the data from the hard disc of M/s PIPL. On the basis of actual production report for the month of May, 2007 of M/s PIPL and the number of units of electricity consumed as per the electricity bill for the same period, the units of electricity consumed for manufacture of ....
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....ation as the appellants did not furnish any positive evidence to single out any specific person/officer/manufacturer said to be instrumental in manipulation of documents. Hence, the story of implantation of employees and manipulation of data by DGCEI officers is a pure ridiculous afterthought as the appellants had no defence and therefore cooked a story of manipulation without any evidence. (B) The remarks column of recovery of Seagate Model contains remark-"Hard disc installed in Vintron CPU operated by Shri Bhagirath Rai, A/c Assistant" in annexure A to Panchanama dated 10.07.2007. Hence, it is established beyond doubt that hard disc containing data of sale/purchase of PIPL was installed in the Computer/ CPU operated by Mr. Bhagirath Rai, Account assistant and the emphasis of the appellants on frivolous technical points like non-recording of computer Serial Number or non- mentioning of sealing of computer hard disc in the Panchanama are attempts to confuse the Hon‟ble court. These technical points raised by the appellants do not negate the substantial evidence in form of duly drawn recovery Memo (Panchnama) of hard disc and other records/devices. Further, the linkage bet....
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.... retracted his admission vide letter dated 19.07.2007 and then readmitted and confirmed the facts admitted on 18.07.2007 before SIO in his statement on 22.08.2007 under Section 14 of Central Excise Act, 1944. Hence, initial statement of Sh. Sanjay Agarwal dated 18.07.2007, recorded after 01 week of the initial search on 10.07.2007 is very much admissible and reliable. Hence, the linkage of PIPL with the First Floor, H8, Geeta Nagari, Bijnore is established beyond any reasonable doubt. (F) The investigation established beyond any reasonable doubt that the premises 1st floor,H-8, Geeta Nagri, Bijnore was rented to M/s PIPL and was being used by them as a secret place, to account for and keep the records of their duty paid as well as non duty paid clearances . The premises was first searched on 10.07.2007 and was left by DGCEI officers after conclusion of search proceedings on 10.07.2007. Again, on 18.07.2007, it was searched by DGCEI officers and Mr. Man Mohan Gautam was again found in the premises. As Mr. Man Mohan Gautam was employee of PIPL, naturally, the premises was under control of PIPL during the period from 10.07.2007 to 18.07.2007. (G) The conduct of search proceeding....
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....ose statements are being relied upon by the Revenue would also be examined by the adjudicating authority in the light of Hon‟ble High Court (Division Bench) Judgement. As the matter is almost four years old, we expect the Commissioner to complete the adjudication as expeditiously as possible. We make it clear that all the principles of natural justice would be adhered to by him and the appellants would also cooperate in the adjudication of matter." The appellant did not cooperate in securing the presence of the witnesses in spite of the the fact that all these persons were employees of M/s PIPL at the time of the visit of the officers of DGCEI in the factory of M/s PIPL and intimation letters were sent to them at the address of M/s PIPL as well as their residential addresses as per record of the case. However, (i) PIPL refused to receive the said letters and thereafter, all these letters were returned by the postal authorities with the remark-" company official told that addressee has left the company" (ii) the letters sent to their residential addresses were also returned by the postal authorities with the remarks- "Addressee has left/Address not existing/incomplete addre....
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....at even when any retracted confession is sought to be relied upon, prudence and practice require that court would seek assurance by getting corroboration from other evidence adduced by prosecution. The references and findings drawn by Hon‟ble Supreme court in case of Vinod Solanki V. UOI 2009 (233) ELT 157 (SC) were also taken into consideration by the adjudicating authority and thereafter adjudicating authority has rightly concluded that if the said persons were forced to give incriminating statements against M/s PIPL, they all should have retracted the same without delay. (L) Following case laws relied upon by the adjudicating authority also support the stand of the Revenue that retraction of statement is not always acceptable. (i) Commissioner Vs. K.Manickam-2001(128)ELTA66(SC) (ii) Ekramuddin V. Collector-2003(155)ELTA244(SC) (iii) Kalema Tumba Versus State of Maharashtra-2000(115) ELT38(SC) (iv) Laxmi Tex. Chem versus Commissioner of Central Excise,Surat I2008ELT677(Tri.-Ahmd) 18. We have carefully gone through the records of the case and heard the submissions made by both sides. 19. After service of SCN, PIPL submitted letter....
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..... Writ Petition No. 1685 of 2011 filed by PIPL was dismissed by Hon‟ble High Court on 28.2.2012 [Parmarth Iron Pvt. Ltd. v. Commissioner of Central Excise-I2017 (346) ELT 570 (All)] with the following directions:- "12. In the facts and circumstances, in which the petitioner is raising an issue in the writ petition under Article 226 of the Constitution of India to record findings on the compliance of the directions issued by this Court, as well as the question, whether the non-relied upon documents were actually supplied, failing which the opportunity of cross examination was a futility, can also be looked into by the Appellate Authority. These are questions of facts, which will require findings, after scrutiny of records, to examine the plea of denial of opportunity given to the petitioner in the proceedings of adjudication. 13. The writ petition is dismissed relegating the petitioner to file statutory appeal against the order, in the Customs, Central Excise and Service Tax Appellate Tribunal. As this writ petition was pending since 1.2.2011, in case the petitioner files an appeal along with the application for condonation of delay within a week, the questio....
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....elease of cash. He has only deferred the application until the adjudication is complete. 11. In view of the fact, that the petitioner had not filed reply to the show cause notice for the last five years, we do not propose to interfere in the matter. 13 The writ petition is dismissed." Thereafter, PIPL vide letter dated 4/12/2013 filed interim defence reply and also sought cross-examination of 69 persons. Other co-noticees filed final defence reply, which was followed by submissions and additional submissions etc. by PIPL and other co-noticees. 26. During the course of hearing of stay applications, Supplementary Affidavits were filed by PIPL & PSAPL bringing on record documents showing financial hardship, copy of order dated 20/07/2013 passed in Criminal Case No. 101/2007 under Section 135 of the Electricity Act and also the copies of assessment orders passed under the U.P Trade Tax Act, 1948. Second Supplementary Affidavit was also filed by PIPL bringing on record the orders by which bail was granted to Sri Lalit Kumar Agarwal and Sri Raj Kamal Agarwal, copy of order dated 23.8.2017 passed by U.P Electricity Commission, copies of registration certificates....
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....a nullity. Similarly in the case of Arya Abhusan Bhandar v. UOI [2002 (143) ELT 25], Hon‟ble Supreme Court has held that non-production of material witnesses for cross-examination, results in breach of principles of natural justice. 30. Apart from the aforesaid settled law, in the present case there was a specific direction of division Bench of Hon‟ble Allahabad High Court in the case of appellant itself i.e. CCE, Meerut-I v. Parmarth Iron Pvt.Ltd. [2010 (260) ELT 514(All.)] as under:- "16. We, therefore, have no hesitation in holding, that there is no requirement in the Act or Rules, nor do the principles of natural justice and fair play require that the witnesses whose statements were recorded and relied upon in the show cause notice, are liable to be examined at that stage. If the Revenue chose not to examine any witnesses in adjudication, their statements cannot be considered as evidence. However, if the Revenue chose to rely on the statements, then in that event, the persons whose statements are relied upon have to be made available for cross examination for the evidence or statement to be considered." It has also been informed at Bar that the afores....
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....spute i.e. 2004-05 to 2007-08, wherein names of all the employees were disclosed, which does not include the names of Sri Manmohan Gautam, Sri Bhagirath Roy, Sri Pankaj Agarwal, Sri Mukesh Chaudhary, Sri Shailendra Gupta. Further, as per revenue, PIPL was maintaining parallel set of records containing all accounted and unaccounted transaction, but there is no allegation in the SCN that parallel accounts also shows expenses towards salaries of these persons, rent of Geeta Nagri House etc. Thus, the charge of revenue that these five persons were employees of PIPL cannot be sustained, in absence of any evidence in support of the charge. 34. Further, it was not the responsibility of PIPL to produce these persons but it was the responsibility of revenue to produce these persons for cross-examination, since it was the revenue who was relying on statements given by these persons. As held by Hon‟ble Supreme Court in the case of Union of India v. Sardar Bahadur (1972) 4 SCC 618, where while following the law laid down in the case of Bareilly Electricity Supply Co. Ltd. v. Workman and Ors(1971) 2 SCC 61, it was held:- "We do not think that the statements should have been re....
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....pellant. 37. Further, law is well settled that in absence of cross-examination, statements relied upon by revenue has to be disregarded, as held by Hon‟ble Bombay High Court in the case of Kiran Nagindas Vora v. Commissioner of Customs 2015 (322) ELT 97 (Bom), Pahar Chand & Sons v. State of Punjab (supra) and larger bench decision of this Tribunal in the case of Arsh Castings Pvt. Ltd. v. CCE (Tri LB). 38. It is important to note that as per revenue‟s own case, the data retrieved from hard disc was feeded in computer by Sri Manmohan Gautam and Sri Bhagirath Roy only and not by any other person. Since the data retrieved from computer hard disc has important bearing on the case, hence it is necessary to refer to the law on the subject. 39. Hon‟ble Supreme Court in the case of Bareilly Electricity Supply Co. Ltd. v. Workman and Ors(1971) 2 SCC 61 has held that if a document is produced to establish some fact than its writer must be produced for giving opportunity to the party who challenges such fact. The relevant part of the judgment is reproduced hereunder:- "......But the application of principle of natural justice does not imply that what is not....
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....etrieved from hard disc, seized from H-8, Geeta Nagri, Bijnore. Since admittedly the sales, purchase and other accounts retrieved from hard disc, were prepared by Sri Manmohan Gautam and Sri Bhagirath Roy and since such accounts were being relied upon and used against the Appellant, hence it was incumbent upon the revenue to produce the author/writer of such accounts for cross-examination in view of the law laid down in the case of Bareilly Electric Supply case (supra), followed in Sardar Bahadur case (supra). However, inspite of the specific requests made by Appellants for cross-examination of Sri Manmohan Gautam and Sri Bhagirath Roy, none of them were produced for cross-examination. Thus, when the writer of entries made in computer from which hard disc was allegedly retrieved, was not produced by revenue for cross-examination, then the accounts retrieved from hard disc cannot be used as evidence against the Appellants. 41. On the same reasoning, since the three persons viz Sri Shailendra Gupta, Sri Pankaj Agarwal & Sri Rajesh Sharma, were the authors of documents resumed from 107, Ist Floor, Navyug Market, Ghaziabad, were also not produced for cross-examination and hence docu....
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....s made by Sri Lalit Kumar Agarwal, who was arrested on 12.7.2007 and was released on bail only on 10.9.2007 whereas Late Raj Kamal Agarwal was also arrested on 24.10.2007 and was released on bail only on 23.1.2008. The retractions made by them on 12/07/2007 & 25/10/2007 before the Ld. Court at Patiala House Court, New Delhi, is also on record showing that immediately upon arrest both these persons retracted from their statements which were given when they were in the custody of DGCEI. Further, Sri Lalit Kumar Agarwal again made retractions from his earlier statement on 16/7/2007 before Additional Director, DGCEI, New Delhi. Thus, the retraction of both these persons was at the first available opportunity and therefore cannot be brushed aside in absence of reliable independent material to corroborates the confession, as held in Vishnu & Co. (supra). 45. Further, the defence of Sri Lalit Kumar Agarwal that his confession was not voluntary but obtained under duress and coercion cannot be taken lightly. In the case like this, where the statements of alleged employees and data retrieved from hard disc, cannot be read as evidence, and there is no independent reliable material to corro....
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....y most of them rendered their confessional statement but when PIPL sought their cross-examination, revenue could produce only 30 persons for cross-examination and during cross-examination all of them retracted from their earlier statement. Once this is so, then their statements cannot be relied in absence of some other reliable material which corroborates such statements, as held by Hon‟ble Delhi High Court in the Vishnu & Co. (supra), wherein after considering the Apex Court judgments in the case of Collector of Customs v. D. Bhoormull AIR 1974 SC 859, Sujeet Singh Chabbra (supra) &K.I Pavunny (supra) has held that :- "40. In fact Ms. Sharma too insisted upon reading from such retracted statements in order to persuade the Court to hold that the impugned order of the CESTAT is perverse. According to her the retraction made more than 20 months after the making of the initial statements "would have no effect in the eye of law". She too submitted that the responsibility of ensuring the presence of such persons for cross-examination was of the noticees themselves. 41. What the above submission overlooks is the 'reliability' of such statements. Once it is....
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....lso submitted affidavits to this effect, but the same has been rejected by the Ld. Commissioner in the impugned order in original. Admittedly, the contents of the entries contained in these records were denied by the three persons by filing affidavits. Revenue was having notice of these affidavits but neither the admissibility of these affidavits nor the contents of these affidavits was challenged by revenue, but the same were merely brushed aside by Ld. Commissioner, which is not proper in view of the law laid down by Hon‟ble Supreme Court in the case of CIT, Calcutta v. T.I & M Sales Ltd. (1987) 3 SCC 132. Further, these records contains entries for only three months, which are not corroborated by any other independent material except statements, which are itself not admissible. Thus, Ld. Commissioner erred in not considering the three affidavits. 50. Now coming to the charge of clandestine clearances made by the revenue against PIPL & PSAPL. Law is now well settled on the subject and reliance in this regard on the judgment of jurisdictional High Court would suffice. In the case of Continental Cement Company v. Union of India 2014 (309) ELT 411 (All), a division bench of....
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....n in Petition No. 488/2017, shows that there was no excess consumption of electricity. There being no enquiry and consequently no evidence for excess consumption of electricity. To find out excess purchase of raw material and excess clearance of final product, revenue has made enquiries from dealers by identifying them on the basis of data allegedly retrieved from hard disc. Once it is held that such data cannot be considered as evidence, then it is difficult to sustain the outcome of enquiry made from such dealers. For a moment, even if it is assumed that enquiry was made from right persons, then also revenue has not collected any evidence from such dealers except their confessional statements. Such confessional statements, are not supported by opportunity of cross-examination and thus cannot be considered as evidence in view of law laid down by Hon‟ble Allahabad High Court in PIPL‟s case or were retracted during cross-examination, and hence not admissible as evidence in absence of any independent reliable material which corroborates such statements. Thus, the enquiry conducted by the revenue does not lead to any credible or tangible evidence regarding extra purchas....
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.... of any of the provisions of the Central Excise Rules, 1944‟ 55. A combined reading of Notification No. 68/63 dated 4.5.1963 (as amended) r/w Section 12 of C.E Act, 1944 r/w Section 121 of Customs Act, 1962 shows that, where any excisable goods are removed in contravention of any provisions of Central Excise Rules, 1944, the sale-proceeds of such goods are liable to be confiscated.However, Central Excise Rules, 1944 were rescinded by Central Excise Rules, 2002, but no corresponding notification was issued by the Central Govt. amending the Notifications issued under Section 12 of the C.E Act, 1944. Notification No. 68/63 dated 4/5/1963 was last amended by Notification No. 48/97 dated 02/09/1997, which could also not be denied by revenue. When during the period in question i.e. Feb‟2004 to July‟2007, Central Excise Rules, 2002 were in existence and there being no further amendment to Notification No. 68/63 (as amended), power to confiscate cash of Rs. 1,78,07,797.00 on the ground that the same is sale-proceeds of excisable goods clandestinely removed in contravention of Central Excise Rules, 2002, is wholly illegal. Although during the course of hearing, PIPL has....
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....hose not to examine witnesses, whose names are mentioned as follows:- Shri Manmohan Gautam and Shri Bhagirath Roy, Shri Mohan Aggarwal-Cashier, Shri Mukesh Chaudhary-Sales Executive, Shri Pankaj Aggarwal and Shri Rajesh Sharma and Shri Shravan Kumar Singhal partner of S.M. Computers and Shri Ram Mohan Jindal, Landlord of premises at H-8, Geeta Nagri, Bijnore, Shri Sheru Malik, Shri Aas Mohd and Shri Idris. 58. From the impugned Order-in-Original if the statements recorded in respect of the above stated persons are removed, then there is no evidence left for arriving at the conclusions drawn by the Original Authority. The statements of above stated persons were relied upon for alleging that the Geeta Nagari, Bijnore premises was taken on rent by the appellant, the computer was purchased by the appellant, Shri Bhagirath Roy, Shri Monmohan Gautam were employees of appellant and they were making entries in the computer on behalf of appellant and that the said entries revealed that the extra/unaccounted goods were manufactured by the appellant and clandestinely removed. All these conclusions do not have any other basis, than the statements of above stated persons, and as directed ....