Coolwels Automobile Engineers Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:
1. these two appeals are filed against the order-in-appeal dt. 25-3-04 which upheld the order-in-original confirming the demand of duty and imposition of penalties and also confiscation of goods and truck.2. the relevant facts that arise for consideration are the preventive officers of central excise intercepted a vehicle on 22-11-2000 and on demand, driver could not produce any duty paying documents for 92 boxes loaded in the said vehicle. after recording the statement of driver and panchnama, in a follow-up action on 22-11-2000, the officers visited the factory premises of the appellant and conducted further investigation. on conclusion of such investigation, the revenue issued scn to the appellants directing them to show cause as to why duty should not be demanded on the goods seized and also why the penalties should be imposed on them in addition to confiscation of the said seized goods. the adjudicating authority confirmed the demand, imposed penalties and also confiscated the goods and truck with an option to redeem the same on payment of redemption fine. on an appeal, commissioner (appeals) also concurred the views. hence this appeal.3. ld. authorised representative of the adv. appearing for the appellant submits that appellant no. 1 is the company while the appellant no. 2 is the manager of the company on whom the personal penalty is imposed. it is his submission that the seizure of the goods by panchnama dt. 22-11-2000 is incorrect and there were no statements of the drivers recorded. it is his submission that when there is no valid seizure or any valid statement, the whole issue is vitiated in law. he relied upon the judgment of the hon'ble high court of judicature at bombay in the case of state v. yakub ahmed reported in 2000 (125) e.l.t. 113 (bom.) and in the case of satpushp steels (p) ltd. v. cce, jaipur 4. ld. dr on the other hand contends that it is an admitted fact that the marking found on the seized goods were the marking of the goods as manufactured by the appellant and the drivers on the spot had clearly indicated loading of these goods from appellant's factory. it is his submission that the remarks on the goods which was seized and indicated that these goods were loaded from the appellant's factory.5. considered the submissions made at length by both the sides and perused the records. from the records i find that the panchnama dt.22-11-2000 of the seizer of the goods reads as under: we, the above named panchas, on being called by shri a.k. saini, inspector, central excise, mod-v, new delhi (herein after referred to as "ceo") presented ourselves at c-19, dda, community centre, janak puri, new delhi to witness the central excise proceedings. the ceo informed us that the staff of preventive branch, mod-v, new delhi has while patrolling in the mayapuri inds. area, phase ii, new delhi intercepted one vehicle ei-cher bearing registration no. op-80j-9978 loaded with steering wheels. the driver of the vehicle shri satinder kumar, on demand, could not produce any document covering the goods.6. from the above reproduced portion of the panchnama of seizure of goods, it can be seen that the panchnama was drawn by and signed by the inspector of central excise it is very clear that provision of section 108 of the customs act were invoked on seizure of the goods. provisions of section 110(1) of the customs act permits seizures if the proper officer has a reasonable belief that the goods are liable for confiscation. in this case the seizure of the goods has been done by the inspector of central excise which is as per law. the revenue's case is solely based on the so called statements of drivers of the vehicle, wherein it was stated that the goods were loaded from the factory of the appellant. i find that the so called statements were only signed by the driver and there is no recording done as required under law. the law requires that the statement has to be recorded before a gazetted officer of the central excise or customs, for considering it as a evidence. on closure perusal of the said submissions by both drivers, i find that it is nothing but a signed letter written by them and cannot be considered as confession as they are not a statement recorded before a gazetted officer. in view of this fact, i find that the statement of the drivers cannot be considered as a valid evidence for demand of duty, imposition of penalty and confiscation of goods. i also find from records, that the revenue has not adduced any corroborative evidence even remotedly, to indicate that the goods were removed from the appellant's factory, without payment of duty, even after follow up action undertaken at the appellants factory.7. the hon'ble high court in the case of state v. yakub ahmed (supra) held as under: the only evidence in that behalf which the prosecution could lead was the statements made by these accused persons before the customs officer under section 108 of the customs act, 1962. in this case statements purporting to be of these accused have been produced. exhs. a to i are the statements of the nine accused person. the ld trial magistrate has held these statements inadmissible in evidence. the ground on which he held them inadmissible was that the statements ought to be recorded by any gazetted officer of the customs and not by others. inspector divekar of the customs has signed below all the nine statements, but his evidence shows that he recorded none of them.8. the ratio of the hon'ble high court judgment squarely covers the issue before me. accordingly respectfully the judgment of the high court, i find that the impugned orders are liable to be set aside and i do so and allow the appeals with consequential relief, if any.

Judgment:
1. These two appeals are filed against the order-in-appeal dt. 25-3-04 which upheld the order-in-original confirming the demand of duty and imposition of penalties and also confiscation of goods and truck.

2. The relevant facts that arise for consideration are the Preventive Officers of Central Excise intercepted a vehicle on 22-11-2000 and on demand, driver could not produce any duty paying documents for 92 boxes loaded in the said vehicle. After recording the statement of driver and Panchnama, in a follow-up action on 22-11-2000, the officers visited the factory premises of the appellant and conducted further investigation. On conclusion of such investigation, the revenue issued SCN to the appellants directing them to show cause as to why duty should not be demanded on the goods seized and also why the penalties should be imposed on them in addition to confiscation of the said seized goods. The adjudicating authority confirmed the demand, imposed penalties and also confiscated the goods and truck with an option to redeem the same on payment of redemption fine. On an appeal, Commissioner (Appeals) also concurred the views. Hence this appeal.

3. Ld. Authorised Representative of the Adv. appearing for the appellant submits that appellant No. 1 is the company while the appellant No. 2 is the Manager of the company on whom the personal penalty is imposed. It is his submission that the seizure of the goods by Panchnama dt. 22-11-2000 is incorrect and there were no statements of the drivers recorded. It is his submission that when there is no valid seizure or any valid statement, the whole issue is vitiated in law. He relied upon the judgment of the Hon'ble High Court of Judicature at Bombay in the case of State v. Yakub Ahmed reported in 2000 (125) E.L.T. 113 (Bom.) and in the case of Satpushp Steels (P) Ltd. v. CCE, Jaipur 4. Ld. DR on the other hand contends that it is an admitted fact that the marking found on the seized goods were the marking of the goods as manufactured by the appellant and the drivers on the spot had clearly indicated loading of these goods from appellant's factory. It is his submission that the remarks on the goods which was seized and indicated that these goods were loaded from the appellant's factory.

5. Considered the submissions made at length by both the sides and perused the records. From the records I find that the Panchnama dt.

22-11-2000 of the seizer of the goods reads as under: We, the above named Panchas, on being called by Shri A.K. Saini, Inspector, Central Excise, MOD-V, New Delhi (herein after referred to as "CEO") presented ourselves at C-19, DDA, Community Centre, Janak Puri, New Delhi to witness the Central Excise proceedings. The CEO informed us that the staff of preventive branch, MOD-V, New Delhi has while patrolling in the Mayapuri Inds. Area, Phase II, New Delhi intercepted one vehicle Ei-cher bearing Registration No. OP-80J-9978 loaded with steering wheels. The driver of the vehicle Shri Satinder Kumar, on demand, could not produce any document covering the goods.

6. From the above reproduced portion of the Panchnama of seizure of goods, it can be seen that the Panchnama was drawn by and signed by the Inspector of Central Excise It is very clear that provision of Section 108 of the Customs Act were invoked on seizure of the goods. Provisions of Section 110(1) of the Customs Act permits seizures if the proper officer has a reasonable belief that the goods are liable for confiscation. In this case the seizure of the goods has been done by the Inspector of Central Excise which is as per law. The revenue's case is solely based on the so called statements of drivers of the vehicle, wherein it was stated that the goods were loaded from the factory of the appellant. I find that the so called statements were only signed by the driver and there is no recording done as required under law. The law requires that the statement has to be recorded before a Gazetted Officer of the Central Excise or Customs, for considering it as a evidence. On closure perusal of the said submissions by both drivers, I find that it is nothing but a signed letter written by them and cannot be considered as confession as they are not a statement recorded before a Gazetted Officer. In view of this fact, I find that the statement of the drivers cannot be considered as a valid evidence for demand of duty, imposition of penalty and confiscation of goods. I also find from records, that the revenue has not adduced any corroborative evidence even remotedly, to indicate that the goods were removed from the appellant's factory, without payment of duty, even after follow up action undertaken at the appellants factory.

7. The Hon'ble High Court in the case of State v. Yakub Ahmed (supra) held as under: The only evidence in that behalf which the prosecution could lead was the statements made by these accused persons before the Customs Officer under Section 108 of the Customs Act, 1962. In this case statements purporting to be of these accused have been produced.

Exhs. A to I are the statements of the nine accused person. The Ld Trial Magistrate has held these statements inadmissible in evidence.

The ground on which he held them inadmissible was that the statements ought to be recorded by any Gazetted Officer of the Customs and not by others. Inspector Divekar of the Customs has signed below all the nine statements, but his evidence shows that he recorded none of them.

8. The ratio of the Hon'ble High Court judgment squarely covers the issue before me. Accordingly respectfully the judgment of the High Court, I find that the impugned orders are liable to be set aside and I do so and allow the appeals with consequential relief, if any.