TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 684
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....Brief facts of the case are that on 08.03.2017, the Officers of Director General of Central Excise Intelligence [DGCEI], Kanpur conducted search at a premises situated at 105, Baldau Chowk, Orai. During the course of search proceedings, one Shri Ram Kumar Parihar was found present at the said premises and Panchnama was drawn recording stock of finished goods of various brands namely 'Tazza 5000 supari', 'VIP Sugandhit Supari', 'Mawa Tazza' and '5000 tobacco' valued at Rs.2,03,225/- along with stock of raw material/packing material was found. The Panchnama also records that the officers took sample of finished goods namely 'Tazza 5000 supari', 'VIP Sugandhit Supari', 'Mawa Tazza' and '5000 tobacco'. It is the specific case of the Appellants that the Panchnama nowhere records any manufacturing activity or presence of any machine or equipment. 4. During the course of search proceedings, the officers recorded statement of Shri Ram Kumar Parihar to the effect that the said premises was used for manufacturing and sale of Gutkha under the names of non-existent units, the Appellant is the owner of the factory and goods found there, he was working as a supervisor in the premises on the d....
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....ur and also the residence of its partner. The statement of Shri Manoj Chaurasiya was also recorded on 03.04.2017 wherein he stated that he used to get orders from agents and in his statement dated 13.02.2020 he stated that as per the information received from the agents, the Appellant is the owner of A-1 and VIP brands. 8. One of the co-owner of the premises situated at 105, Baldau Chowk, Orai also submitted letter dated 09.09.2017 to the effect that the said premises was owned by him and his relative and the premises was given on rent by them to Shri Ram Kumar Parihar in support of which he also submitted rent receipt. In the meanwhile, the officers sent the samples of finished goods drawn from the premises situated at 105, Baldau Chowk, Orai for testing to Central Revenue Control Laboratory [CRCL] for the presence of ingredients, namely beetle nut, lime, catechu and tobacco. The CRCL in its reports did not confirm the presence of tobacco and thereafter the samples were sent to the Referral Food Laboratory [RFL] and the report of RFL dated 02.08.2017 indicated presence of nicotine in the samples. SCN dated 01.09.2017 was then issued directing the Appellant to show cause as to w....
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....ained under duress and coercion and were subsequently retracted and have also not underwent the procedure contemplated under Section 9D, the loose papers purportedly resumed from Appellant's residence were not in the handwriting of the Appellant. Without prejudice to these submissions, the Ld. counsel further submitted that duty liability can be fastened only on evidence of manufacturing activity whereas no manufacturing activity was found during search dated 08.03.2017, contents of Panchnama have been blindly relied without proving the same and the confiscation of goods and currency from the residence of the Appellant is bad in law. 12. Per contra, Ld. Departmental Authorized Representative for the Revenue supported the impugned orders and has submitted that there is enough material on record to prove manufacturing activities at the factory premises situated at 105, Baldau Chowk, Orai were linked with the Appellant and that the Appellant is the person behind the entire scheme of clandestine manufacturing and removal of goods and therefore the duty liability has been rightly fastened on the Appellant and the currency of Rs.16,72,000/- has rightly been confiscated along with good....
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....tatements have been relied upon in the adjudication order on the ground that the statements were voluntary, without proving as to how the said statements were voluntary. Law in this regard is well settled in Vinod Solanki vs. Union of India (2008) 16 SCC 537, wherein the Hon'ble Supreme Court has held as under:- "36. A person accused of commission of an offence is not expected to prove to the hilt that confession had been obtained from him by any inducement, threat or promise by a person in authority. The burden is on the prosecution to show that the confession is voluntary in nature and not obtained as an outcome of threat, etc. if the same is to be relied upon solely for the purpose of securing a conviction." 17. To the same effect is the judgment of Hon'ble Supreme Court in Commissioner of Customs (Imports), Mumbai vs. Ganpati Overseas (2023) 386 E.L.T. 802 (SC), wherein the Hon'ble Supreme Court after considering the catena of judgments on the subject has held as under:- "28. Thus, what is deducible from an analysis of the relevant legal provisions and the corresponding judicial pronouncements is that a customs officer is not a police officer. Further, the ....
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....g 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 shown that the maker of such statement has in fact resiled from it, even if it is after a period of time, then it is no longer safe to rely upon it as a substantive piece of evidence. The question is not so much as to admissibility of such statement as much as it is about its 'reliability'. It is the latter requirement that warrants a judicial authority to seek, as a rule of prudence, some corroboration of such retracted statement by some other reliable independent material. This is the approach adopted by the CESTAT and the Court finds it to be in consonance with the settled legal position in this regard." 19. The statements of Shri Ramesh Soni and Shri Manoj Chauraisya have also been relied upon by the revenue. While Shri Ramesh Soni retracted from his statement by submitting letter dated 28.03.2017, Shri Manoj Chaurasiya in his statement dated 03.04.2017 did....
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.... which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word "shall" in Section 9D(1), makes it clear that, the provisions contemplated in the sub-section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. 18. The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the Gazetted Central Excise Officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudicating authority, as, in such an atmosphere, there would be no occasion for any trepidation on the part of the witness concerned. 19. Clearly, therefore, the stage of relevance, in adjudication proceed....
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....ned order, it was incumbent upon the learned adjudicating authority to examine the person, who made the statement. However, the adjudicating authority chose to rely on the statement alone as evidence, which is beyond the scope and ambit of the statutory provisions. Thus, contents of the retracted statement cannot simply be brushed aside, to conclude that the Appellant has indulged into the activity of undervaluation of goods." Jeen Bhavani International (supra) was challenged by revenue before the Hon'ble Supreme Court in Commissioner of Customs vs. Jeen Bhavani International (2023) 6 Centax 14 (SC) and the appeal was dismissed as under:- "1. We have heard Mr. N. Venkataraman, learned Additional Solicitor General, appearing for the Appellant. 2. Delay condoned. 3. We do not find any merit in these appeals and the same accordingly stand dismissed. 4. Pending application(s), if any, shall stand disposed of." 21. Therefore, the statements relied upon by revenue are not admissible evidence and the same are required to be eschewed from consideration. Apart from the statements, the revenue has relied upon by the presence of goods namely tobacco, ....
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.... 411 (All), the charge of clandestine removal is a serious charge, required to be proved by revenue by tangible and sufficient evidences, which are clearly missing in the present case. 24. The case of the Appellant that he has no connection with the alleged factory premises and the said premises was in possession of Shri Ram Kumar Parihar, which fact was not only admitted by Shri Ram Kumar Parihar but also by the owner of the said premises. Once the person who was found during search dated 08.03.2017, retracted from his earlier statement and admitted that the premises was taken on rent by him, which fact was further corroborated by the owner of the premises and there being no direct/indirect admissible evidence linking Appellant was the alleged factory premises, the only conclusion which can be drawn is that the Appellant is not connected with the alleged factory premises. 25. Further, I find that the entire case of the revenue is that manufacturing was done by hand i.e. by mixing raw materials by hand. In this regard, I find that the revenue not only alleges presence of any sealing machine or even a hand sealer in the alleged factory premises. Neither the Panchnama nor the S....