TaxTMI 
TaxTMI 
2020 (3) TMI 15
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.... Iron for the period from December, 2012 to July, 2013. Thereafter, the department recorded inculpatory statements dated 20.08.2013 and 20.09.2013 of Shri Basant Kumar Sahu, V.P. (Commercial) of the appellant under Section 14 of the Central Excise Act, 1994 (here-in-after referred to as 'the Act'). Based on the aforesaid documents recovered and the statements, a show cause notice has been issued to the appellant, demanding Cenvat duty of Rs. 48,81,921/- on the allegation of suppression of production of 717.03 MT of MS Round and 605 MT of Sponge Iron and clandestinely cleared for the period December, 2012 to July, 2013. The said show cause notice was adjudicated by the learned Adjudicating Authority vide its order-in-original dated 14.02.2018, confirming Central Excise duty of Rs. 48,81,921/- along with interest and equivalent penalty, which has been further affirmed by the learned Commissioner(Appeals), vide the impugned order. Hence the present appeal before the Tribunal. 3. The learned Counsel appearing for the appellant has vehemently argued that the impugned order is liable to be set aside on the following grounds : 3.1 That the statement recorded under Section 14 of the Ac....
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....n Section 36A of the Act, which is not applicable to the facts of the present case. It is also submitted that it is a well settled law that alleged private records cannot be relied upon as evidence without any corroborative evidence. 3.3 It was further argued that, during the course of search at the factory premises of the appellant, the department has not found any shortage or excess of any raw material or finished goods. 3.4 It is submitted that the huge demand has been confirmed merely on the basis of alleged private records, without adducing any other corroborative evidence. 3.5 It is further submitted that, merely deposit of money at the time of investigation would not amount to acceptance of allegations of clandestine manufacture and removal as alleged by the department. It is well settled law that, payment of money at the time of investigation would be treated as a deposit under protest. The appellant would like to place reliance on the following judgements to support its contention:- i. Bayshore Glass Trading Pvt. Ltd. Vs CC, Kolkata, 2002 (148) ELT 1243 (Tri-Kol.) ii. CCE, Lucknow Vs Eveready Industries India Ltd., 2017 (357) ELT 11 (All.) iii. CC, New Delhi....
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....Undoubtedly, the proceedings are quasi criminal in nature because it results in imposition of not only of duty but also of penalty and in many cases, it may also lead to prosecution. The provisions contained in Section 9D, therefore, has to be construed strictly and held as mandatory and not mere directory. Therefore, unless the substantive provisions contained in Section 9D are complied with, the statement recorded during search and seizure operation by the Investigation Officers cannot be treated to be relevant piece of evidence on which a finding could be based by the adjudicating authority. A rational, logical and fair interpretation of procedure clearly spells out that before the statement is treated relevant and admissible under the law, the person is not only required to be present in the proceedings before the adjudicating authority but the adjudicating authority is obliged under the law to examine him and form an opinion that having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. Therefore, we would say that even mere recording of statement is not enough but it has to be fully conscious application of mind b....
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....peals) erred in relying upon Section 36A of the Act, which is not applicable to the facts of the present case. I further find that the alleged private records cannot be relied upon as evidence without any corroborative evidence. I find that the Hon'ble Chhattisgarh High Court in the case of Hi-Tech Abrasives Ltd. Vs. CCE&C, Raipur, 2018 (362) ELT 961 (Chhattisgarh), has held that:- "12.2 We have gone through the detailed order passed by the adjudicating authority and we find that so far as the demand of challenge in the present case is concerned it rested only on two materials. One was the so called statement of the Director which the adjudicating authority and the Customs, Excise and Service Tax Appellate Tribunal received in advance as admission of clandestine removal by the Director of the appellant/Company and the other was the notebook which contained certain entries, which according to the adjudicating authority constitute relevant material to draw inference of clandestine removal by the avoidance of payment of duty. Once we have held that the statement of the Director could not be admitted as relevant piece of evidence, there is no question of there being any admission on....
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....from regular dealers/buyers. (vi) To find out the excess power consumptions. 13. Thus, to prove the allegation of clandestine sale, further corroborative evidence is also required. For this purpose no investigation was conducted by the Department." I further find that admittedly, in the present case, no such investigation has been conducted by the department qua purchase of raw material, use of electricity, sale of final products, payment, realization of sale proceeds, mode and flow back of funds. Similar view has been taken by the following judgements of the Hon'ble High Courts and this Tribunal, which have been affirmed by the Hon'ble High Courts and Supreme Court:- i. CCE, Chandigarh-I Vs. Laxmi Engineering Works, 2010 (254) ELT 205 (P&H) ii. Flevel International Vs CCE, 2016 (332) ELT 416 (Del.) iii. CCE, Ahmedabad-I Vs. Gopi Synthetics Pvt. Ltd., 2014 (310) ELT 299 (Guj.) iv. Vikram Cement (P) Ltd. Vs CCE, Kanpur, 2012 (286) ELT 615 (Tri-Del.) affirmed by the Hon'ble High Court of Allahabad in the case of CCE Vs Vikram Cement (P) Ltd., 2014 (303) ELT A82 (All.) v. Sakeen Alloys Pvt. Ltd. Vs CCE, Ahmedabad, 2014 (296) ELT 292 (Tri-Del.), affirmed by the H....