Harisons Steel P. Ltd vs Commissioner Of Central Excise, Thane I

(Arising out Order-in-Appeal No. BR (343-344) TH-I/2012 dated 26.11.2012 passed by the Commissioner of Central Excise (Appeals), Mumbai I)

For approval and signature: Honble Mr. P.K. Jain, Member (Technical)

1. Whether Press Reporters may be allowed to see No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy Yes of the Order?

4. Whether Order is to be circulated to the Departmental Yes authorities?

Harisons Steel P. Ltd. Appellant

Vs.

Commissioner of Central Excise, Thane I Respondent

Appearance:

Shri H.G. Dharmadhikari, Advocate for the appellant Shri V.K. Shastri, AC (AR) for the respondent

CORAM:

Honble Mr. P.K. Jain, Member (Technical)

Date of hearing : 30.01.2015 Date of decision : 16.02.2015

O R D E R No:..

Per: P.K. Jain:

The brief facts of the case are that the appellants are engaged in the manufacture of MS ingots. A search was held on 24.09.2003. After the search, statement of Shri Ashok Fulwadhya, director of the appellant firm was recorded on 25.09.2003. In the statement, he admitted that certain goods have been cleared without payment of duty for which no documents have been maintained and the payments have been received in cash. It was also stated that the said goods were sold through two brokers and he did not know the address of the said brokers. Shri Kishan G. Gadekar, accounts clerk of the appellant firm, was also recorded wherein he also stated that the goods which was cleared unaccounted or without payment of duty no records have been prepared and no record have been kept of such clearances. Similarly, statement of Shri Chandu Singh, supervisor was also recorded wherein he admitted that the Tally production figure entered by him in the RG1 register were as given by Shri Ashok Fulwadhya and Shri Kishan G. Gadekar and these were different from the production figure sheet prepared by the chemist. It is upon the said statement a show-cause notice was issued and a sum of `8 lakhs was demanded and the amount of `8 lakhs already deposited was appropriated against the said demand. The case was adjudicated wherein the said demand was confirmed in addition to equal amount of penalty under Section 11AC was imposed. A penalty of `2 lakhs was also imposed on Shri Ashok Fulwadhya and interest under Section 11AB was confirmed. Aggrieved by the said order, appellant filed appeal before the Commissioner (Appeals), who in turn confirmed the said order. Aggrieved by the said order, the appellant are before us.

2. The main contention of the ld. counsel for the appellant is that the demand cannot be made purely based on the statement without any corroboratory evidence. The other contention is that they should have been permitted cross examination of various persons and for these reasons the matter should be remanded back. It is also contended that the demands is barred by limitation. Yet another contention that the penalty is not imposable as there is no proof relating to excess power consumption or consumption of excess of raw material or any statement of transport operator etc. In support of the various contentions the appellant has quoted certain judgments.

3. Ld. AR reiterated the finding in the impugned order and stated that it is well settled law that admitted facts need not be proved. In the present case, the director in the appellants company have admitted and so called retraction was made only after three years and four months, and is therefore irrelevant. He also submitted that the Hon'ble Supreme Court in the case of Surjeet Singh Chhabra 1997 (89) ELT 646 (SC) has held that when the petitioner has confessed the details, there is no need for cross examination. Ld. AR also quoted this Tribunals judgement in S.M. Steel Ropes 2014 (304) ELT 591 (Tri-Mum).

4. I have considered the submission made by both sides.

5. I note that the original authority in his finding has observed that the appellant has specifically admitted that they were removing the goods without payment of duty and all such transactions are in cash and no documents for such transactions were prepared. During the statement, appellant also stated that such goods are transported by the buyers on their vehicle. The transactions were done through brokers and the director of the appellant did not disclose their address. He further admitted that they would have cleared 450 MT of ingots and duty liability on the same would be `8 lakhs and he further paid the duty after sometime. It was also clarified that they had to clear the goods without payment of duty as the customer wanted the goods at a cheaper rate. The statement was further corroborated by the statement of Shri Kishan G. Gadekar and Shri Chandu Singh. The said statement was retracted after a period of 3 years and four months and retraction was of a general nature without going into details. It is well settled that admitted facts need not be proved. This has been settled by the Hon'ble High Court of Madras in Govindasami Raghupati 1998 (98) ELT 50 (Mad).

6. In the present case, the appellants director has admitted clearance of the goods without payment of duty without accounting any records and from the statement or details provided from him, no further investigation could have been carried out. In view of the said position, in the facts and circumstances of the case, the demand is upheld. As far as the contention of the ld. counsel about the cross examination is concerned, in view of the Supreme Court decision in Surjeet Singh Chhabra (supra), the contention is rejected. As far as the limitation is concerned, the place was searched on 24.09.2003 and the show-cause notice has been issued on 28.12.2007 which is within five years and therefore, keeping in view the clandestine nature of the clearance the proviso to Section 11A would be applicable. However, as far as penalty is concerned, we find that in the investigation further details have not been investigated and under the circumstances, penalty imposed under Section 11AC is set aside.

7. Appeal is disposed of in the above terms.

(Pronounced in Court on )

(P.K. Jain) Member (Technical)

//SR

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