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Anjaneya Textiles Unit-ii Vs. Commissioner of Central Excise, Coimbatore - Court Judgment

SooperKanoon Citation

Court

Customs Excise and Service Tax Appellate Tribunal CESTAT Chennai

Decided On

Case Number

Appeal No. E/891 of 2006

Judge

Appellant

Anjaneya Textiles Unit-ii

Respondent

Commissioner of Central Excise, Coimbatore

Advocates:

For the Appearing Parties: M.N.Bharathi, Indira Sisupal, JDR, Advocate.

Excerpt:


.....these invoices showed clearances during april to august 05. evidence was gathered in the form of statements from the manager in charge of the factory and proprietor of the assessee unit. in a statement dt. 9.8.01, shri r.gurusamy, manager admitted having resorted to clearance of dutiable goods, namely cotton yarn on cone, without paying duty by manipulating the production and clearance records. they had adopted this modus operandi since they became ineligible to the ssi exemption from 1.4.01. he admitted evasion of central excise duty involved in the clearances reflected in the 13 parallel invoices recovered. shri r.nareshkumar, proprietor of the assessee unit endorsed the version of the transactions rendered by the manager vide his statement dt. 13.8.01. adjudicating allegations of clandestine clearances contravening statutory provisions, the original authority found that the proprietor and the manager had admitted having committed the offending transactions and had offered to pay the central excise duty due along with applicable interest. accordingly, he demanded an amount of rs.1,63,393/- under section 11a (2) of the central excise act (the act) towards the duty found.....

Judgment:


Following a visit to the appellants unit on 9.8.08 and scrutiny of the records maintained by them, officers attached to the Central Excise Division, Pollachi observed that the appellants had maintained parallel invoices showing clearances of dutiable cotton yarn without accounting the same in their statutory records. A total of 13 such invoices were recovered. These invoices showed clearances during April to August 05. Evidence was gathered in the form of statements from the Manager in charge of the factory and Proprietor of the assessee unit. In a statement dt. 9.8.01, Shri R.Gurusamy, Manager admitted having resorted to clearance of dutiable goods, namely cotton yarn on cone, without paying duty by manipulating the production and clearance records. They had adopted this modus operandi since they became ineligible to the SSI exemption from 1.4.01. He admitted evasion of Central Excise duty involved in the clearances reflected in the 13 parallel invoices recovered. Shri R.Nareshkumar, Proprietor of the assessee unit endorsed the version of the transactions rendered by the Manager vide his statement dt. 13.8.01. Adjudicating allegations of clandestine clearances contravening statutory provisions, the original authority found that the Proprietor and the Manager had admitted having committed the offending transactions and had offered to pay the Central Excise duty due along with applicable interest. Accordingly, he demanded an amount of Rs.1,63,393/- under Section 11A (2) of the Central Excise Act (the Act) towards the duty found to have been evaded on clearances of cotton yarn. He also demanded applicable interest under Section 11AB of the Act. He imposed equal amount of penalty as the duty demanded under Section 11AC of the Act. Vide the impugned order, the Commissioner (Appeals) sustained the order of the original authority. He relied on the Tribunals decision in Commissioner of Central Excise, Surat Vs N.D.Textiles, reported in 2004 (168) ELT 381 (Tri.-Mum.) wherein it was held that what was admitted did not need to be proved; proof of a fact in issue may be direct evidence as well as circumstantial evidence. He relied on another decision of the Tribunal in the case of M/s.India Cock Mills Ltd. and Others reported in 1984 (17) ELT 513 to hold that the department was not required to establish guilt beyond reasonable doubt; preponderance of probability was the relevant test to be applied. The Hon’ble High Court of Madras in the case of Santhanam Vs Collector of Central Excise, Madurai, reported in 1995 (79) ELT 564 (Mad.) had held to the same effect.

2. The appellants have assailed the impugned order on the ground that the buyers as reflected in the invoices recovered had denied having purchased cotton yarn covered by those invoices. Clandestine clearances could not be found solely relying on statements. The impugned order deserved to be set aside.

3. I have heard both sides. I find that, in this case, the authorities recovered 13 invoices, originals of which had been issued to cover clearances to various buyers. The quantity covered by these invoices was not reflected in the statutory production register R.G.1. The Manager of the factory or the Proprietor was unable to explain how they came to maintain additional set of invoices which showed clearances of cotton yarn. No satisfactory explanation could be advanced by the appellants in this connection till date. As rightly held by the lower authority, it is a case of clandestine clearances contravening statutory provisions evidenced by a parallel set of invoices and confessional statements rendered by the person in charge of the factory as well as the proprietor of the assessee unit. I find that the lower authorities held the appellants to be liable to pay duty, interest and also penalty based on sound grounds. I do not find any reason to interfere with the impugned order. In the result, the appeal filed by M/s.Anjaneya Textiles Ltd. is rejected as devoid of merit.


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