Page 105 - ELT_3rd_1st May 2020_Vol 372_Part

2020 ] N.R. SPONGE PVT. LTD. v. COMMISSIONER OF CENTRAL EXCISE, RAIPUR 327

that the allegation of clandestine removal was not substantiated by the Revenue
by adducing any evidence in the form of raw materials, shortage of raw materi-
als, use of electricity, excess or shortage of inputs found in the stock and that
mere entries of records of traders and transporters cannot be the basis for prov-
ing the charge of clandestine removal. The Tribunal observed that the finding
rendered by the Commissioner (Appeals) based on the facts as above, was not
liable to be interdicted and hence, the appeal was dismissed. Unlike the factual
position in the said case, various incriminating circumstances have been brought
on record in the instant case, including the admitted shortage of 2.580 MT of
stock detected on the date of inspection held on 4-10-2006. That apart, various
other records including the records seized from the premises of the Assessee and
from the Transporters/Brokers/Commission Agents, along with the statements
taken from different persons/witnesses and also the Director of the Company
(who finally agreed to satisfy the duty and effected the payment accordingly,
before adjudication) clearly supported the case of the Revenue. It also remains a
fact, that the penalty imposed upon the Director of the Appellant-Company (as
reduced) is not challenged any further and this has attained finality. As such, the
above verdict does not support the Assessee-Appellant in any manner.
17. Coming to the other case considered by the Division Bench of this
Court (cited supra), it was a case where the liability was fixed by the Adjudicat-
ing Officer with reference to the clandestine removal of the goods which came to
be interdicted by the Commissioner (Appeals), but restored by the Tribunal.
Apart from the question relating to the bar of limitation (which is not involved
herein), the substantial question of law considered by this Court was whether the
procedure adopted by the Tribunal was contrary to Section 9D of the Act, 1944
insofar as the verdict passed by the Tribunal was based on the statement given
by the Director of the Appellant-Company before the investigating team and not
any version given before the Tribunal. The question was answered in favour of
the Assessee, leading to allowing the appeal and setting aside the verdict of the
Tribunal. The substantial question of law raised in the said case are as given be-
low :
“(i) On the facts and in the circumstances of the case, did the Tribunal
act contrary to the law relying on the statement of the Director of
the Appellant to decide the appeal against the appellant herein?
(ii) Is the procedure adopted by the Appellate Tribunal contrary to Sec-
tion 9D of the Central Excise Act, 1944?”
The submission on behalf of the Appellant/Assessee was that the statement of
the Director of the Assessee-Company recorded during investigation was inad-
missible in evidence and once it was found accordingly, the only material availa-
ble in the said case was the “unverified note book” containing certain entries
which could not be the basis to draw inference of clandestine removal, more so,
when the author of the said document was not called to appear before the Adju-
dicating Officer to give his statement, in turn involving violation of Section 9D of
the Act, 1944. The said contention was examined by the Tribunal while rendering
the finding on the substantial questions of law at (i) and (ii) as given under para-
graph 9 (9.1, 9.2, 9.3, 9.4 and 9.5). As taken note of in the opening portion of par-
agraph 9, the contention of the Appellant was that the Director’s statement was
inadmissible and that it could not be treated as ‘admission’, because in the reply
to the show cause notice, it was pointed out that such statement was obtained
‘under duress’.
EXCISE LAW TIMES  1st May 2020  105