Vakharia Traders and Biren Vs. Commissioner of Central Excise - Court Judgment

Excerpt:

.....its partner simultaneously, citing decisions of the tribunal in support.3. the departmental representative says that vakharia's statement, not having been retracted is sufficient basis for confirming the demand for duty.4. i agree that the failure to retract the statement by vakharia undermines the claim made by on his behalf by the representative that he was compelled to furnish the statement and that retraction could not be done. at the same however, on reading vakharia's statement it is difficult to accept that he has accepted that duty was payable. the relevance of the crucial sentence in the statement was that total evasion worked out by the officers involves fabrics of a specific type.this is very different from saying that he has removed the goods without payment of duty. having regard to this, i direct the assess to deposit rs. 40,000/- towards duty. on such deposit within three months from today, the deposit of the remaining duty and penalty is waived and recovery stayed.5. it is settled position that penalty cannot be imposed on a partner and the partnership firm simultaneously. i therefore waive deposit of the penalty on biren vakharia and stay its recovery.

Judgment:

1. The application by Vikharia Traders is f or waiver of deposit of duty totalling Rs. 1,86,995/- and Rs. 2 lakhs and application by Biren Harishchandra Vakharia, the partner, is for waiver of deposit of penalty of Rs. 25,000/-.

2. The notice issued to the applicant proposed to demand duty on two counts. The first of Rs. 18,965/- related to finished processed textiles in the factory of the assessee which had not been entered in the RG1 register. The contention of the representative of the applicant is that the goods were production of the same day and that in any event duty is not payable on it prior to their removal. The other demand for duty of Rs. 1,68,030/- is based solely on the admission made by Biren Vakharia in his statement before the officer in which he has accepted removal of 27 consignments on which duty payable amounts to Rs. 168030/-. He contends that Vakharia's statement is clearly not voluntary or true. There is not a word in it saying the dates on which the goods were removed or their quantity. Such a statement alone without any material corroboration cannot be the basis for demanding duty. He further contends that penalty cannot be imposed on the partnership firm and its partner simultaneously, citing decisions of the Tribunal in support.

3. The departmental representative says that Vakharia's statement, not having been retracted is sufficient basis for confirming the demand for duty.

4. I agree that the failure to retract the statement by Vakharia undermines the claim made by on his behalf by the representative that he was compelled to furnish the statement and that retraction could not be done. At the same however, on reading Vakharia's statement it is difficult to accept that he has accepted that duty was payable. The relevance of the crucial sentence in the statement was that total evasion worked out by the officers involves fabrics of a specific type.

This is very different from saying that he has removed the goods without payment of duty. Having regard to this, I direct the assess to deposit Rs. 40,000/- towards duty. On such deposit within three months from today, the deposit of the remaining duty and penalty is waived and recovery stayed.

5. It is settled position that penalty cannot be imposed on a partner and the partnership firm simultaneously. I therefore waive deposit of the penalty on Biren Vakharia and stay its recovery.