Jagdish Biri Company Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. the captioned five appeals arise out of the same order, therefore, they were heard together and are being disposed of by this common order.2. these appeals are against the order of confiscation of hand-made branded biris, numbering 12,65,000 and loose and hand-made biris number 2,05,780 and redemption thereof on payment of a fine of rs. 20,000/- and imposition of penalty of rs. 5,000/- on m/s. jagdish biri company and rs. 5,000/- each on m/s. sidhardh biri works and m/s. manish agencies in addition to the confiscation of matador vehicle with an option to redeem the same on payment of a fine of rs. 25,000/- and imposition of penalty of rs. 1,000/- on shri neeraj sahu and shri mansukh.3. the facts of the case, briefly stated, are that the central excise officers intercepted a matador vehicle on 27-11-1994 at hasari in jhansi district. the said matador was found to be loaded with 12,65,000/- biris, comprising 40 bags containing 10,40,000 hunter chap biris and 3 bags containing 2,25,000 special hunter chap biris. on demand, shri mansukh, the driver of the matador, produced a challan no.195, dated 27-11-1994 for 10,40,000 biris out of a total of 12,65,000 biris loaded in the said matador. on examination of the documents vis-a-vis the goods, it was found that there was no bag number, no name of the manufacturer or any packing details on any of the packages. on enquiry, the driver stated that he was a regular driver of m/s. jagdish biri company; that the goods in the matador were loaded and cleared from the factory premises of m/s. jagdish biri company and that he had no other documents except that challan. this statement of the driver was confirmed by shri ramesh chandra, who was accompanying him in the matador. shri ramesh chandra stated that he was a packer in the factory of m/s. jagdish biri company. as the driver and the other person stated that the goods were cleared from the factory of m/s. jagdish biri company and there was no duty paying document accompanying the goods, the goods were seized in the reasonable belief that they were liable to confiscation.4. in follow-up action, on 27-11-1994 itself, biris numbering 2,05,780 were found in excess of recorded balance in the premises of m/s.jagdish biri company. these goods were also seized as nobody explained satisfactorily their non-accountal in the rg 12a register. on the request of shri manish sahu, the seized 12,65,000 biris were provisionally released. the matador was also provisionally released after furnishing security and bond. a show cause notice was issued to the appellants asking them to explain as to why the seized goods should not be confiscated; why duty should not be demanded and why penalty should not be imposed. the appellants in their reply stated that the statements of shri mansukh and shri ramesh chandra were obtained under duress and were retracted by filing sworn-in affidavits. it was argued by the appellants that the seized 12,65,000 biris comprise of two lots; that one lot was lifted from m/s. manish agencies under proper challan and the other lot of 2,25,000 biris lifted from the premises of m/s.mahendra and dharmendra; that the challan in respect of 2,25,000 biris lifted from the premises of mahendra and dharmendra was given to the driver and that the driver left that challan back by mistake; that in the challan issued by m/s. manish agencies, a reference was made to the invoices under which duty was paid and that it was invoice no. 14, dated 22-11-1994. after careful consideration of the submissions made, the lower authorities held as mentioned above and hence the appeals before us.5. shri b.l. jain, the ld. consultant appearing for the appellants, submits that the statements of shri mansukh, driver and shri ramesh chandra were neither voluntary nor true inasmuch as the statements were recorded under duress after detaining both of them for a long period that these two persons retracted their statements by filing sworn in affidavits; that the department did not produce any evidence to show that the invoice no. 14, dated 22-11-1994 mentioned in the challan no.195, dated 27-11-1994 did not cover the goods mentioned in the challan no. 195, dated 27-11-1994. the ld. consultant submitted that since the statements were taken under duress, therefore, they were not voluntary and true and since their statements were retracted by filing the sworn-in affidavits, the value of these statements ceases as evidence.the id. consultant submits that once these statements cease to have any evidenciary value, there is no other evidence brought on record to show that the confiscated goods were being removed without payment of duty.6. on the question of recovery of excess goods in the factory premises of m/s. jagdish biri company, the ld. consultant submitted that the verification of the number of biris was not correctly done, that it was only an estimation. he submitted that the demand for duty cannot be raised on the basis of estimated number. he also submitted that the goods were inside the factory and, therefore, their seizure and confiscation was not warranted, more so when the total number of biris involved was disputed. the ld. consultant referred to a number of decisions of the tribunal on the question of evidenciary value of retracted statements and also on the question of seizure and confiscation of the goods found in the factory. the ld. consultant submitted that since the department has not been able to bring on record any evidence and since the two statements were not true and voluntary and were retracted, therefore, the case of the department is completely demolished and does not stand to reason. he, therefore, prayed that the impugned order may be set aside and the appeals may be allowed.7. shri a.m. tilak, the ld. jdr appearing for the respondent commissioner, submits that the statements were true and voluntary inasmuch as nothing has been brought on record to show that there was torture or beating of shri mansukh, driver and shri ramesh chandra, packer. he submitted that the appellants have not brought on record any evidence to the effect that there were some injury marks or signs of torture; that no medical certificate has been produced by the appellants to show that the statements were procured and were untrue and involuntary. the ld. dr submitted that according to these statements, the goods were lifted from m/s. jagdish biri company and not from the premises of manish agencies. he submitted that the driver, shri mansukh was employed by m/s. jagdish biri company; that shri ramesh chandra was a packer with m/s. jagdish biri company; that since they were employees of m/s. jagdish biri company, there was no question of their telling lies at the time of interception of the matador vehicle. he submitted that nothing has been brought on record to show that there was enemity between these two employees and their employers.the ld. dr also submitted that incorrect accountal of biris in the premises of m/s. jagdish biri company is proved inasmuch as 2,05,780 biris were found in excess when the stock was verified. the ld. dr submitted that all these facts are to be examined in its entirity and when done so, it will be clear that the goods were being clandestinely removed as there was no bag number and name of the manufacturer on the containers. he, therefore, prayed that the impugned order maybe upheld.8. heard the submissions of both sides. on careful consideration of the submissions made, the case law cited and relied upon as also the evidence placed on record, i find that the statement of shri mansukh, driver of the matador vehicle and shri ramesh chandra, packer of m/s.jagdish biri company was recorded. now the question is whether this statement was recorded under duress and was involuntary. i find that no evidence has been placed on record to prove that there was injury on the person of either of them. further no evidence has been brought on record to prove that they had any hostility with the owners of m/s.jagdish biri company. on the contrary, shri mansukh was the driver of m/s. jagdish biri company and shri ramesh chandra was a packer of the same company. the question of the two being together, otherwise as explained in the affidavit, is not convincing inasmuch as manish agency did not appear to be hiring this driver every now and then. the simple fact that the goods were provisionally released to m/s. manish agency does not lead me to believe that the goods were being sent by m/s.manish agency.9. i have seen the challan no. 195, dated 27-11-1994 issued by m/s.manish agency. in this challan, i find that the invoice no. 14, dated 22-11-1994 has been inserted. there is no finding that no goods were cleared by m/s. jagdish biri company or other under invoice no. 14, dated 22-11-1994. the contention of the department was that there were no serial nos. of bags and there is no name of the manufacturer written on the containers (bags). the appellants, on the contrary, submitted that they had paper slips put in the bags to indicate the serial number of the bags and that, thus, the bags were serially numbered. on dispassionate examination of the challan no. 195, dated 27-11-1994,1 find that this challan indicates the number of the invoice and its date. nothing has been brought on record to show that different goods were cleared under invoice no. 14, dated 22-11-1994. the mix-up is possible inasmuch as the premises of m/s. mahendra dharmendra are located in the same building. therefore, in respect of 10,40,000 numbers of biris contained in 40 bags seized from the matador, i gave the benefit of doubt to the appellants.10. insofar as the biris numbering 2,25,000 are concerned, i find that there was no challan, bill or invoice produced by the driver and the story of the driver that he had left it back in his pant pocket is not convincing and, therefore, i hold that 2,25,000 biris were being removed clandestinely. in this view of the matter, i uphold the confiscation of 2,25,000 nos. of biris.11. insofar as confiscation of 2,05,780 biris found in excess of the recorded balance is concerned, i find that there is no satisfactory explanation putforth by the appellants as to why that could not be accounted for. looking to all the facts, circumstances, the case law and the submissions made, i uphold the confiscation of 2,05,780 bins.12. insofar as the confiscation of the matador is concerned, i note that i have already held that 2,25,000 biris were being transported without payment of duty in this matador. i also note that it was within the knowledge of the driver of matador as also the owner of the matador that non-duty paid biris were being transported. therefore, the confiscation of the matador and imposition of penalty on the driver and the owner of the matador is justified. the quantum of penalty being nominal, i do not see any reason to interfere with this and i hold accordingly.13. insofar as the involvement of m/s. jagdish biri company is concerned, i note that 2,25,000 biris have been held to be surreptitiously being removed. i also note that i have held that 2,05,780 biris found in excess were rightly confiscated. looking to the facts and findings as above, i do not see any reason to interfere with the finding of the lower authority.14. in view of the above findings, the impugned order is modified to the extent stated above and the appeals are disposed of accordingly.

Judgment:
1. The captioned Five Appeals arise out of the same order, therefore, they were heard together and are being disposed of by this common order.

2. These Appeals are against the order of confiscation of hand-made branded Biris, numbering 12,65,000 and loose and hand-made Biris number 2,05,780 and redemption thereof on payment of a fine of Rs. 20,000/- and imposition of penalty of Rs. 5,000/- on M/s. Jagdish Biri Company and Rs. 5,000/- each on M/s. Sidhardh Biri Works and M/s. Manish Agencies in addition to the confiscation of Matador Vehicle with an option to redeem the same on payment of a fine of Rs. 25,000/- and imposition of penalty of Rs. 1,000/- on Shri Neeraj Sahu and Shri Mansukh.

3. The facts of the case, briefly stated, are that the Central Excise Officers intercepted a Matador Vehicle on 27-11-1994 at Hasari in Jhansi District. The said Matador was found to be loaded with 12,65,000/- Biris, comprising 40 bags containing 10,40,000 Hunter Chap Biris and 3 bags containing 2,25,000 Special Hunter Chap Biris. On demand, Shri Mansukh, the Driver of the Matador, produced a Challan No.195, dated 27-11-1994 for 10,40,000 Biris out of a total of 12,65,000 biris loaded in the said Matador. On examination of the documents vis-a-vis the goods, it was found that there was no bag number, no name of the manufacturer or any packing details on any of the packages. On enquiry, the driver stated that he was a regular driver of M/s. Jagdish Biri Company; that the goods in the Matador were loaded and cleared from the factory premises of M/s. Jagdish Biri Company and that he had no other documents except that Challan. This statement of the Driver was confirmed by Shri Ramesh Chandra, who was accompanying him in the Matador. Shri Ramesh Chandra stated that he was a Packer in the factory of M/s. Jagdish Biri Company. As the Driver and the other person stated that the goods were cleared from the factory of M/s. Jagdish Biri Company and there was no duty paying document accompanying the goods, the goods were seized in the reasonable belief that they were liable to confiscation.

4. In follow-up action, on 27-11-1994 itself, Biris numbering 2,05,780 were found in excess of recorded balance in the premises of M/s.

Jagdish Biri Company. These goods were also seized as nobody explained satisfactorily their non-accountal in the RG 12A Register. On the request of Shri Manish Sahu, the seized 12,65,000 biris were provisionally released. The Matador was also provisionally released after furnishing security and bond. A Show Cause Notice was issued to the Appellants asking them to explain as to why the seized goods should not be confiscated; why duty should not be demanded and why penalty should not be imposed. The Appellants in their reply stated that the statements of Shri Mansukh and Shri Ramesh Chandra were obtained under duress and were retracted by filing sworn-in affidavits. It was argued by the Appellants that the seized 12,65,000 Biris comprise of two lots; that one lot was lifted from M/s. Manish Agencies under proper challan and the other lot of 2,25,000 biris lifted from the premises of M/s.

Mahendra and Dharmendra; that the challan in respect of 2,25,000 biris lifted from the premises of Mahendra and Dharmendra was given to the Driver and that the Driver left that challan back by mistake; that in the challan issued by M/s. Manish Agencies, a reference was made to the invoices under which duty was paid and that it was invoice No. 14, dated 22-11-1994. After careful consideration of the submissions made, the lower authorities held as mentioned above and hence the Appeals before us.

5. Shri B.L. Jain, the ld. Consultant appearing for the Appellants, submits that the statements of Shri Mansukh, Driver and Shri Ramesh Chandra were neither voluntary nor true inasmuch as the statements were recorded under duress after detaining both of them for a long period that these two persons retracted their statements by filing sworn in affidavits; that the Department did not produce any evidence to show that the invoice No. 14, dated 22-11-1994 mentioned in the Challan No.195, dated 27-11-1994 did not cover the goods mentioned in the Challan No. 195, dated 27-11-1994. The ld. Consultant submitted that since the statements were taken under duress, therefore, they were not voluntary and true and since their statements were retracted by filing the sworn-in affidavits, the value of these statements ceases as evidence.

The Id. Consultant submits that once these statements cease to have any evidenciary value, there is no other evidence brought on record to show that the confiscated goods were being removed without payment of duty.

6. On the question of recovery of excess goods in the factory premises of M/s. Jagdish Biri Company, the ld. Consultant submitted that the verification of the number of biris was not correctly done, that it was only an estimation. He submitted that the demand for duty cannot be raised on the basis of estimated number. He also submitted that the goods were inside the factory and, therefore, their seizure and confiscation was not warranted, more so when the total number of biris involved was disputed. The ld. Consultant referred to a number of decisions of the Tribunal on the question of evidenciary value of retracted statements and also on the question of seizure and confiscation of the goods found in the factory. The ld. Consultant submitted that since the Department has not been able to bring on record any evidence and since the two statements were not true and voluntary and were retracted, therefore, the case of the Department is completely demolished and does not stand to reason. He, therefore, prayed that the impugned order may be set aside and the Appeals may be allowed.

7. Shri A.M. Tilak, the ld. JDR appearing for the Respondent Commissioner, submits that the statements were true and voluntary inasmuch as nothing has been brought on record to show that there was torture or beating of Shri Mansukh, Driver and Shri Ramesh Chandra, Packer. He submitted that the Appellants have not brought on record any evidence to the effect that there were some injury marks or signs of torture; that no medical certificate has been produced by the Appellants to show that the statements were procured and were untrue and involuntary. The ld. DR submitted that according to these statements, the goods were lifted from M/s. Jagdish Biri Company and not from the premises of Manish Agencies. He submitted that the Driver, Shri Mansukh was employed by M/s. Jagdish Biri Company; that Shri Ramesh Chandra was a Packer with M/s. Jagdish Biri Company; that since they were employees of M/s. Jagdish Biri Company, there was no question of their telling lies at the time of interception of the Matador Vehicle. He submitted that nothing has been brought on record to show that there was enemity between these two employees and their employers.

The ld. DR also submitted that incorrect accountal of Biris in the premises of M/s. Jagdish Biri Company is proved inasmuch as 2,05,780 Biris were found in excess when the stock was verified. The ld. DR submitted that all these facts are to be examined in its entirity and when done so, it will be clear that the goods were being clandestinely removed as there was no bag number and name of the manufacturer on the containers. He, therefore, prayed that the impugned order maybe upheld.8. Heard the submissions of both sides. On careful consideration of the submissions made, the case law cited and relied upon as also the evidence placed on record, I find that the statement of Shri Mansukh, Driver of the Matador Vehicle and Shri Ramesh Chandra, Packer of M/s.

Jagdish Biri Company was recorded. Now the question is whether this statement was recorded under duress and was involuntary. I find that no evidence has been placed on record to prove that there was injury on the person of either of them. Further no evidence has been brought on record to prove that they had any hostility with the owners of M/s.

Jagdish Biri Company. On the contrary, Shri Mansukh was the Driver of M/s. Jagdish Biri Company and Shri Ramesh Chandra was a Packer of the same company. The question of the two being together, otherwise as explained in the Affidavit, is not convincing inasmuch as Manish Agency did not appear to be hiring this Driver every now and then. The simple fact that the goods were provisionally released to M/s. Manish Agency does not lead me to believe that the goods were being sent by M/s.

Manish Agency.

9. I have seen the Challan No. 195, dated 27-11-1994 issued by M/s.

Manish Agency. In this challan, I find that the Invoice No. 14, dated 22-11-1994 has been inserted. There is no finding that no goods were cleared by M/s. Jagdish Biri Company or other under Invoice No. 14, dated 22-11-1994. The contention of the Department was that there were no Serial Nos. of Bags and there is no name of the manufacturer written on the Containers (bags). The Appellants, on the contrary, submitted that they had paper slips put in the bags to indicate the serial number of the bags and that, thus, the bags were serially numbered. On dispassionate examination of the Challan No. 195, dated 27-11-1994,1 find that this Challan indicates the number of the invoice and its date. Nothing has been brought on record to show that different goods were cleared under Invoice No. 14, dated 22-11-1994. The mix-up is possible inasmuch as the premises of M/s. Mahendra Dharmendra are located in the same building. Therefore, in respect of 10,40,000 Numbers of Biris contained in 40 bags seized from the Matador, I gave the benefit of doubt to the Appellants.

10. Insofar as the Biris numbering 2,25,000 are concerned, I find that there was no Challan, Bill or Invoice produced by the Driver and the story of the Driver that he had left it back in his Pant Pocket is not convincing and, therefore, I hold that 2,25,000 Biris were being removed clandestinely. In this view of the matter, I uphold the confiscation of 2,25,000 Nos. of Biris.

11. Insofar as confiscation of 2,05,780 Biris found in excess of the recorded balance is concerned, I find that there is no satisfactory explanation putforth by the Appellants as to why that could not be accounted for. Looking to all the facts, circumstances, the case law and the submissions made, I uphold the confiscation of 2,05,780 Bins.

12. Insofar as the confiscation of the Matador is concerned, I note that I have already held that 2,25,000 Biris were being transported without payment of duty in this Matador. I also note that it was within the knowledge of the Driver of Matador as also the owner of the Matador that non-duty paid Biris were being transported. Therefore, the confiscation of the Matador and imposition of penalty on the Driver and the owner of the Matador is justified. The quantum of penalty being nominal, I do not see any reason to interfere with this and I hold accordingly.

13. Insofar as the involvement of M/s. Jagdish Biri Company is concerned, I note that 2,25,000 Biris have been held to be surreptitiously being removed. I also note that I have held that 2,05,780 Biris found in excess were rightly confiscated. Looking to the facts and findings as above, I do not see any reason to interfere with the finding of the lower authority.

14. In view of the above findings, the impugned order is modified to the extent stated above and the appeals are disposed of accordingly.