Anurag Steel Enterprise vs. Commissioner Of CGST And Central Excise Howrah CGST And Cx Commissionerate

Facts

The appellant, M/s. Anurag Steel Enterprise, is appealing a final order of the Customs, Excise and Service Tax Appellate Tribunal. The case originated from a search conducted by the Central Excise intelligence wing on Shree Parashnath Re-Rolling Mills Limited (SPRML) based on intelligence of duty evasion. This led to a show-cause notice issued to the appellant on March 16, 2017, proposing a penalty under Rule 26(1) of the Central Excise Rules, 2002. The allegations were that the appellant was involved in the clandestine removal of wire rods manufactured by SPRML between February 1, 2012, and December 25, 2012, without Central Excise invoices. The appellant procured 543.15 MT of MS wire rods from SPRML during this period. The proprietor of the appellant admitted to procuring MS wire rods from SPRML without invoices and making cash payments. The adjudicating authority imposed a penalty of Rs. 26,94,687/-. The Commissioner (Appeals) and the Tribunal affirmed this order, finding the appellant involved in clandestine purchase and sale.

Held

The Court held that no substantial question of law arises for consideration in the appeal. Regarding the issues raised: 1. & 2. The Court found that the penalty was imposed based on the admitted facts from the proprietor's voluntary statement and other corroborative evidence, including computerized ledger accounts. The proprietor admitted to procuring MS wire rods without Central Excise invoices and making cash payments. The Court relied on the Supreme Court's decision in K.I. Pavunny v. Assistant Collector (HQ) Central Excise Collectorate, Cochin, which held that a voluntary confessional statement can form the sole basis for conviction in the absence of valid retraction. The proprietor's statement was considered admissible in evidence as it was voluntary, not retracted effectively, and corroborated by other records. 3. & 4. The Court distinguished the case of M/s. Jai Balaji Industries Limited, stating that in that case, the department had not adequately investigated to prove clandestine removal. However, in the present case, the admission made by the appellant's proprietor in his voluntary statement, which remained valid, obviated the need for further proof. Therefore, the earlier decisions of the Tribunal were found to be factually distinguishable and not applicable to the facts of this case. The Court concluded that the matter was entirely factual, and the findings of the adjudicating authority, Commissioner (Appeals), and the Tribunal were affirmed.

Key Issues

1. Whether penalty under Rule 26 of the Central Excise Rules, 2002, is imposable without holding any goods as confiscable under the Central Excise Act, 1944, or its rules? (Question of law) 2. Whether penalty under Rule 26 of the Central Excise Rules, 2002, is imposable upon any person without a specific finding of prior knowledge or reason to believe about the confiscable nature of goods under the Act and Rules? (Question of law) 3. Whether the Tribunal failed to follow its own Final Order No. 75583-75585/2020 dated November 12, 2020, in the case of M/s. Jai Balaji Industries Limited (Unit-III) v. Commissioner of CGST and CX, Bolpur Commissionerate, which held that recoveries from Shree Parasnath Re-Rolling Mills Limited on December 27, 2012, could not be relied upon for adverse conclusions? (Question of mixed law and fact) 4. Whether the rule of judicial discipline requires the Tribunal to follow its earlier order concerning similarly situated appellants, especially when the earlier order in M/s. Jai Balaji Industries Limited was not appealed against? (Question of law) Contentions: Petitioner/Appellant: Argued that the Tribunal failed to follow its own precedent in the Jai Balaji Industries case, which involved similar facts where the assessee was a purchaser from Shree Parasnath Re-Rolling Mill Limited. The appellant contended that the Tribunal should have extended similar relief as the earlier orders had become final. They also argued that penalty under Rule 26 is not imposable without establishing confiscability of goods and without specific findings of prior knowledge or reason to believe. Respondent/Revenue: Relied on the statements recorded from the proprietor of the appellant and other computerized records, including ledger accounts, which showed clandestine removal and purchase of goods without invoices and without payment of duty. The respondent argued that the appellant's proprietor admitted to these facts and failed to produce any purchase invoices. They also contended that the decision in Jai Balaji Industries was factually distinguishable.