Full Judgment
2. The respondents, M/s Yamuna Bardana Traders, were engaged in the manufacture of HDPE/PP Bags. During the preventive checks conducted by the Department in the premises of the respondents on 18.12.1997, the goods were found short than the recorded balance in RG-1 Register. The respondents admitted the shortage and deposited duty amounting to Rs. 2,09,000/- under protest out of Rs. 2,09,612/-. In the order-in-original issued by the Deputy Commissioner on 27.11.1998, the demand was confirmed and penalty of equal amount of duty under Section 11-AC, earlier imposed. Besides, they were also made liable for payment of interest under Section 11-AB. Aggrieved by the said order of Deputy Commissioner, the respondents filed an appeal before the Commissioner (Appeals). In his order dated 13.05.2003, the Commissioner (Appeals) has set aside the orders of Deputy Commissioner observing that, the input fabric was issued from RG-23A, Part I account, for manufacture and the said fabric was accounted as production ie. HDPE bags without actually stitching bags from the fabrics and that the verification of in-process material was not carried out. Aggrieved by the orders of the Commissioner (Appeals), the Revenue has approached the Tribunal on the following grounds : (i) The Commissioner (Appeals) has not taken into consideration the facts of panchnama drawn on the spot and the statement of the partner of the firm, Shri Ashwani Kumar recorded under Section 14 of the Central Excise Act, 1944 in which he had already admitted that there was nil stock of finished products i.e HDPE bags.
(ii) Shri Ashwani Kumar in his statement dated 18.12.1997 recorded under Section 14 did not mention anything about their practice that they used to issue the entire quantity of modvatable inputs i.e PP Fabrics for manufacture and the same quantity was shown as manufactured final products on the same day. Thus the plea taken by the party at a later stage that there was no shortage of the finished products was clearly an after thought.K.L. Pavunny v. AC (HQ), Cochin Patel v. ACC, Bulsar reported at had held that a confessional statement of an accused, if found to be voluntary, can form the sole basis for conviction.
(iv) As per Section 9D a statement made and signed by a person before any Central Excise Officer of a Gazetted Rank during the course of any inquiry or proceedings under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains.
(v) Section 36-A of the Central Excise Act, 1944 also shifts burden of proof on the person from whom documents are resumed/seized as regards to the tariff of those documents. That burden has also not been discharged by the party.
3. Nobody represented the respondents today, despite the notice for today's hearing. The learned JDR reiterated the grounds of appeal. To support her contention, the following case laws are relied upon :Majestic Auto Ltd. v. CCE, Ghaziabad, , wherein it has been held that - Explanation offered two months after physical verification by Department and no documentary proof given in support of same is not acceptable especially when the correctness of Panchnama and method adopted by Revenue officers were not disputed on the spot.
(b) Kirloskar Brothers Ltd. v. Union of India and Ors. 2002 (83) ECC 497 (Bom.), wherein it has been held that, whether one had intention to evade payment is a question of fact and also liability under Rule 173Q, CE Rules does not depend on mens rea.
4. I have examined the case records and heard the learned Representative. I notice that the impugned order relies upon a point that was made at a later date by the respondents while defending his case. It was explained by them that the quantity of input i.e HDPE fabrics purchased from outside was shown as having removed to the floor of the factory after making entry in RG-23A, Part I. The same quantity was shown as the quantity of manufactured bags in the RT-1 register. It is also evident from Panchnama and the statement recorded under Section 14 that no such new grounds ever came into light. This goes to prove that this explanation is an after-thought. In the case of Majestic Auto Ltd. v. CCE, Ghaziabad, supra, relied upon by the learned JDR, the explanation came to be offered two months after physical verification by the Department. In the present case, however, Page 0180 this explanation was never available during investigation and even during recording of the statement. Though the Officers visited the premises of the respondents on 18.12.1997 and the show cause notice came to be issued on 27.05.1998. It is only vide their letters dated 25.06.1998 and 17.08.1998, that the respondents have come forward with this explanation. Further, the veracity of Panchnama and method adopted during investigation have all never been disputed on the spot or immediately thereafter. It is also noticed that while RG-1 Register is meant for entering fully finished goods, but in the subject case, the respondents have claimed to have entered the inputs used for production in the RG-1 Register. Therefore, the explanation offered subsequently - nearly after six months - is apparently an afterthought which has obviously misled the Commissioner (Appeals) while passing his impugned order.
5. This view finds support in the Tribunal's decision in the case of Majestic Auto Ltd. v. CCE, Ghaziabad, supra, as it has held that an explanation offered two months after physical verification by the Department, is not acceptable.
6. Considering the facts and circumstances of the case, I set aside the impugned order of the Commissioner (Appeals) by upholding the order of the original authority.