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2017 Supreme(Raj) 2701
RAJASTHAN HIGH COURT (JAIPUR BENCH)
K.S. Jhaveri, Vijay Kumar Vyas, JJ.
Commissioner Of C.G. And S.T., Jaipur - Appellant
Versus
Goyal Tobacco Co. Pvt. Ltd. - Respondent
Central Excise Appeal No. 69 of 2017 and D.B. Excise Appeal (Excia) No. 70 of 2017
Decided On : 19-09-2017
Shri Kinshuk Jain, Advocate, for the Appellant
The standard of proof in departmental proceedings or domestic tribunals is not proof beyond reasonable doubt, but the preponderance of probabilities tending to draw an inference that the fact must be more probable.
Headnote:
EXCISE - CONFIRMATION OF DEMAND - CROSS-EXAMINATION OF WITNESSES - EVIDENCE - PANCHNAMA - SECTION 14 OF THE CENTRAL EXCISE ACT, 1944 - SECTION 11A(2) OF THE CENTRAL EXCISE ACT, 1944 - SECTION 41AC OF THE CENTRAL EXCISE ACT, 1944 - RULE 18(1) OF THE CHEWING TOBACCO AND UN-MANUFACTURED TOBACCO PACKING MACHINES (CAPACITY DETERMINATION AND COLLECTION OF DUTY) RULES, 2010 - RULE 25 OF THE CENTRAL EXCISE RULES, 2002 - RULE 26 OF THE CENTRAL EXCISE RULES, 2002 - SECTION 34 OF THE CENTRAL EXCISE ACT, 1944 - SECTION 11AB/11AA OF THE CENTRAL EXCISE ACT, 1944 - SECTION 108 OF THE CUSTOMS ACT - SECTION 161 OF THE CRIMINAL PROCEDURE CODE, 1973 - The Tribunal held that the confirmation of demand of duty on impugned goods was not sustainable merely on the basis of the presence of machines and certain statements of laborers and accountants, whereas there were evidences in the form of verification and still photography of machines and a confessional statement of the Director. The Tribunal also held that the statements of concerned persons used as corroboratory evidences were not legally sustainable as cross-examination of witnesses was not allowed by the adjudicating authority, whereas the assessee had not claimed that the statements of said persons were factually wrong or that they had any bias or malice towards the assessee, and cross-examination of such persons would not have reduced the weight of the evidentiary value of their statements.
Fact of the Case:
The assessee challenged the Tribunal's order allowing the appeal of the assessee, reversing the view taken by the original authority imposing the liability of payment of excise and penalty. The Tribunal held that the confirmation of demand of duty on impugned goods was not sustainable merely on the basis of the presence of machines and certain statements of laborers and accountants, whereas there were evidences in the form of verification and still photography of machines and a confessional statement of the Director. The Tribunal also held that the statements of concerned persons used as corroboratory evidences were not legally sustainable as cross-examination of witnesses was not allowed by the adjudicating authority, whereas the assessee had not claimed that the statements of said persons were factually wrong or that they had any bias or malice towards the assessee, and cross-examination of such persons would not have reduced the weight of the evidentiary value of their statements.
Finding of the Court:
The Court held that the Tribunal's finding that witnesses in the panchnama were not examined by the Commissioner of Excise was a finding of fact and could not be disturbed. The Court also held that the Tribunal's view that the statements of concerned persons used as corroboratory evidences were not legally sustainable as cross-examination of witnesses was not allowed by the adjudicating authority was correct, as the assessee had not claimed that the statements of said persons were factually wrong or that they had any bias or malice towards the assessee, and cross-examination of such persons would not have reduced the weight of the evidentiary value of their statements.
Issues: 1. Whether the Tribunal was correct in holding that the confirmation of demand of duty on impugned goods was not sustainable merely on the basis of the presence of machines and certain statements of laborers and accountants, whereas there were evidences in the form of verification and still photography of machines and a confessional statement of the Director? 2. Whether the Tribunal was correct in holding that the statements of concerned persons used as corroboratory evidences were not legally sustainable as cross-examination of witnesses was not allowed by the adjudicating authority, whereas the assessee had not claimed that the statements of said persons were factually wrong or that they had any bias or malice towards the assessee, and cross-examination of such persons would not have reduced the weight of the evidentiary value of their statements?
Ratio Decidendi: The Court held that the Tribunal's finding that witnesses in the panchnama were not examined by the Commissioner of Excise was a finding of fact and could not be disturbed. The Court also held that the Tribunal's view that the statements of concerned persons used as corroboratory evidences were not legally sustainable as cross-examination of witnesses was not allowed by the adjudicating authority was correct, as the assessee had not claimed that the statements of said persons were factually wrong or that they had any bias or malice towards the assessee, and cross-examination of such persons would not have reduced the weight of the evidentiary value of their statements.
Final Decision: The Court dismissed both appeals.
JUDGMENT
K.S. Jhaveri, J. - Heard on application (26168) filed in Excise Appeal (Excia) No. 70/2017 to waive the defect/s. The application (26168) is allowed and the defect/s pointed out by the office are waived.
In both these appeals, common question of law and facts are involved therefore, they are decided by the common judgment.
2. By way of these appeals, the appellant has challenged the judgment and order of the Tribunal whereby Tribunal has allowed the appeal of the assessee reversing the view taken by the original authority imposing the liability of payment of excise and penalty.
3. Learned counsel for appellant has framed in Excise Appeal No. 69/2017, the following substantial questions of law : -
(a) Whether the Hon''ble CESTAT is correct in holding that confirmation of demand of duty on impugned goods was not sustainable merely on the basis of presence of machines and certain statements of labourers and accountants whereas there were evidences in form of verification and still photography of machines and confessional statement of Shri Rajesh Goyal, Director? and;
(b) Whether the Hon''ble CESTAT is correct in setting aside the demand of nonpayment of Central Excise Duty of Rs. 3,17,41,935/- by holding that the statements of concerned persons used as corroboratory evidences were not legally sustainable as cross-examination of witnesses was not allowed by the adjudicating authority whereas the assessee had not claimed that statements of said persons were factually wrong or they had any bias or malice towards the assessee and cross-examination of such persons would not have reduced the weight of evidentiary value of their statements.
4. Learned counsel for appellant has framed in Excise Appeal No. 70/2017 the following substantial questions of law : -
(a) Whether the Hon''ble CESTAT is correct in holding that confirmation of demand of duty on impugned goods was not sustainable merely on the basis of presence of machines and certain statements of labourers and accountants whereas there were evidences in form of verification and still photography of machines and confessional statement of Shri Rajesh Goyal, Director? and;
(b) Whether the Hon''ble CESTAT is correct in setting aside the penalty of Rs. 50,00,000/- by holding that the statements of concerned persons used as corroboratory evidences were not legally sustainable as cross-examination of witnesses was not allowed by the adjudicating authority whereas the assessee had not claimed that statements of said persons were factually wrong or they had any bias or malice towards the assessee and cross-examination of such persons would not have reduced the weight of evidentiary value of their statements.
5. While passing the order, the Tribunal observes as under : -
"115. In view of the above discussion and findings, I pass the following order : -
ORDER
(I) I confirm, under Section 11A(2) of the Central Excise Act, 1944, Central Excise duty of Rs. 3,17,41,935/- (including cess and other levies as applicable) (Rupees three crore seventeen lacs forty one thousand nine hundred and thirty five only) against M/s. Goyal Tobacco Co. P. Ltd., D-21, Krishnapuri, Old Ramgarh Mod, Jaipur and order its recovery from them along with interest leviable under Section 11AB/11AA of the Act ibid.
(ii) I impose, under Section 41AC of the Act ibid read with Rule 19 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010, a penalty of Rs. 3,17,41,935 (Rupees three crore seventeen lacs forty one thousand nine hundred and thirty five only) on M/s. Goyal Tobacco Co. P Ltd., D-21, Krishnapuri, Old Ramgarh Mod, Jaipur. However benefit of reduced penalty of 25% as per proviso to Section 11AC, is available to them subject to the condition that Central Excise Duty amounting to Rs. 3,17,41,935/- (including cess and other levies as applicable) and the interest payable thereon is paid within thirty days from the date of communication of thi
