Commissioner, Central GST And Cx 117/7, Sarvaodaya Nagar vs. M/S Raghunath International LTD. 84/12 Fazalganj Kanpur

Held

The Court held that no substantial question of law arose for consideration. It noted that there was no dispute regarding the CESTAT's factual finding that all persons, including the Authorized Signatory, had retracted their statements recorded under Section 14 of the Central Excise Act, 1944, during their cross-examination before the Adjudicating Authority. These retractions were based on the assertion that the statements were recorded under duress. Specifically, Rajesh Agarwal stated his statement was recorded late at night in the DGCEI office while surrounded by officers and dictated by them. The Court found the Adjudicating Authority's reliance on these statements, despite their retraction and allegations of duress, to be perverse. The Court emphasized that clandestine removal requires clinching evidence beyond retracted statements. It also noted the CESTAT's finding that the manufacturers were neither consignor nor consignee in third-party transporter records and their consistent stand of selling goods ex-factory. Therefore, the CESTAT's decision to set aside the Adjudicating Authority's findings based solely on retracted statements was not an error of law. The appeals were dismissed.

Facts

The Commissioner of Central GST & CX filed these appeals against the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad. The CESTAT had set aside the demand of duty, interest, and penalty previously confirmed by the Adjudicating Authority. The original proceedings stemmed from searches conducted on December 1, 2007, and May 9, 2008, at the premises of manufacturers of 'Sir' Brand Gutkha and Pan Masala, namely M/s Raghunath International Limited, M/s Seema Enterprises, and M/s Shanker Enterprises. Incriminating documents, unaccounted raw material, and finished goods were seized. The Revenue alleged clandestine clearance of goods without invoices and payment of excise duty. Statements were recorded from various individuals, including Rajesh Agarwal, the Authorized Signatory for M/s Seema Enterprises and M/s Shanker Enterprises, and Sushil Gupta, a clerk for M/s Shanker Enterprises, who allegedly admitted to dispatching goods without bills.

Key Issues

1. Whether a retracted confessional statement requires corroboration from independent evidence? (Section 14 of the Central Excise Act, 1944). 2. Whether a demand for duty based on third-party documents supported by corroborative statements is justified? 3. Whether the CESTAT was justified in ignoring evidence and statements of witnesses and concerned persons? 4. Whether the CESTAT was justified in setting aside or reducing the demand, redemption fine, and confiscation of goods by ignoring material facts? 5. Whether statements recorded under Section 14 of the Central Excise Act, 1944, by departmental officers can be taken as proof of statutory violations by the respondents? Arguments for the Revenue (Appellant): The Revenue contended that incriminating documents and seized goods were sufficient to establish guilt for clandestine clearance. They argued that statements of individuals, including Rajesh Agarwal, corroborated the allegations. They further argued that the Adjudicating Authority was justified in relying on statements, even if retracted, and that the CESTAT erred in ignoring evidence. They relied on precedents like Continental Cement Company, Sponge Pvt. Ltd. vs. Commissioner of Central Excise, Raipur, and Principal Commr. of CGST & Central Excise, Raipur vs. G.P. Ispat Pvt. Ltd. Arguments for the Assessee (Respondent): The Revenue did not record specific arguments for the respondents in the provided text, other than their counsel's appearance.