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K. Thangaswamy Vs. Collector of Customs and Central - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1985)(5)LC1887Tri(Chennai)
AppellantK. Thangaswamy
RespondentCollector of Customs and Central
Excerpt:
.....in the book no. 11/3 mentioned in sl. no. 1 of the annexure, the kattus have been worked out in terms of biris on the page relating to transactions on 3-1-80 by adopting 25 biris per kattu. when a relevant entry in the account books of the appellant clearly indicates that he was adopting 25 biris as the basis for a kattu, i find no substance in the present contention of the appellant with reference to the irregularity or mistake in the computation of the total quantum of biris arrived at.8. it was submitted that the appellant is an illiterate rustic villager and has never been involved in any offence under the excise law or rules in the past and is in very poor circumstances. having regard to the facts and circumstances of the appeal, i am inclined to take a lenient view in the matter.....
Judgment:
1. Appeal under Section 35B of the Central Excises and Salt Act, 1944 praying that in the circumstances stated therein, the Tribunal will be pleased to set aside the order of the Additional Collector of Central Excise and Customs, Madurai dated 31-12-81 in C. No. V/4II(3) (ii)/15/5/81-CX. 3.

2. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri Sheik Ahmed, Advocate for the appellant and upon hearing the arguments of Shri J.M.K. Sekhar, Senior Departmental Representative for the respondent, the Tribunal makes the following order.

3. The appeal filed by the appellant before the Central Board of Excise and Customs against the order of the Addl. Collector referred to supra has been transferred to the Tribunal in terms of Section 35P of the Central Excises and Salt Act, 1944. This is an appeal against the order of the Additional Collector imposing a total penalty of Rs. 4,500/- on the appellant under Rules 9(2), 52A and 226 of the Central Excise Rules, 1944, appropriating a sum of Rs. 2,000/- out of the security amount in terms of the bond executed by the appellant before the authorities for provisional release of the confiscated biris, besides demanding duty of Rs. 21,450.27 in terms of Rule 9(2).

4. On 22-11-80, the Central Excise officers attached to the Preventive Group, Tirunelveli, notice, at Sendamaram village in Tirunelveli District, one Kasilingam carrying biris in a bicycle and unloading them at a place in Salai Street. Enquiries by the authorities revealed that the said Kasilingam was a clerk of the appellant who was manufacturing biris in the aforesaid premises and an inspection of the said premises revealed that there was a stock of 6,21,000 unbranded biris kept there without being accounted for. Apart from it, bill books, bearing different names, such as K. Velayutham, P. Selvaraj, K. Selvaraj Sndeyi Beedi Works (K. Krishnan) were also recovered. The biris found in the premises and which were unaccounted, totalling 6,31,000 including the 10,000 biris brought by the said Kasilingam were seized under mahazar as per law by the authorities. Kasilingam gave a statement before the authorities on 22-11-80 that the appellant was manufacturing unbranded biris in the names of various persons. Likewise, the statements recorded from Selvaraj and Krishnan referred to supra also clearly implicated the appellant as the manufacturer of the biris under seizure. The appellant himself was examined on 26-11-80 when he gave an inculpatory statement that he was manufacturing biris without bringing them into account in the names of various persons and were clearing the same for sale without payment of duty. It is in these circumstances that proceedings were instituted against the appellant by issue of show cause notice which ultimately resulted in the impugned order now appealed against.

5. The learned Consultant for the appellant submitted that the statements recorded from the appellant and others were not voluntary and were extorted under circumstances of threat and coercion and inasmuch as they were retracted at a later point of time, no value should be attached to the same under law. It was further urged that the duty amount arrived at on the basis of a total quantum of 1,30,11,025 biris is factually incorrect and is based on erroneous calculation. The validity of the mahazar was also assailment on the ground that it was not prepared at the place of seizure. Finally it was submitted that the answers elcited from the various witnesses including the mahazar witnesses in cross-examination during adjudication discredit the version of the Department and the benefit arising therefrom should enure in favour of the appellant.

6. The learned Senior Departmental Representative submitted that the statements recorded from the appellant and others with reference to the seizure are voluntary and true and clearly implicate the appellant as the manufacturer of biris without bringing the same into account. The appellant or the other persons did not immediately retract from their statements and the inordinate delay is not satisfactorily explained.

Even if a search or seizure is illegal, the Courts have held that the same will not affect or vitiate the recovery. He finally urged that the plea regarding the incorrect calculation of the total quantum of biris is also unfounded.

7. I have carefully considered the submissions of the parties herein.

This is a case where immediately on seizure of 10,000 biris from Kasilingam, the authorities recovered the rest of the balance quantity of biris under seizure. Kasilingam gave a statement stating that the biris were manufactured by the appellant and that he himself was an employee of the appellant. The appellant has himself given a statement clearly confessing to the fact that the biris under seizure were manufactured by him without being brought into account and cleared without payment of duty. This statement of the appellant has been corroborated by the statements of K. Salvaraj and K. Krishnan who are benami name lenders to the biris manufactured by the appellant. The plea that the statements of these various persons were recorded under threat or coercion is not substantiated, much less probablised by any materials by the appellant. One important factor that has to be taken into account in this context is the fact that there is no immediate retraction of the various inculpatory statements recorded from the aforesaid persons. It is only in reply to the show cause notice on or about 21-9-81, after a period of about 10 months, the appellant - chose to retract from his earlier inculpatory statement. As rightly argued by the learned Senior Departmental Representative no satisfactory convincing explanation is offered by the appellant for such belated retraction. It is settled proposition of law that when a statement which is inculpatory in nature and confessional in character is retracted by a person the Court will look to the factors and reasons to find out whether the reasons of retraction are true. Having gone through the statements recorded from these various persons, I am convinced that they are true and voluntary. I, therefore, reject the plea advanced on behalf of the appellant that the statements were recorded under threat or coercion. Regarding the next submission of the appellant that the mahazar is not entitled to any weight because of certain alleged irregularity is also without any substance under law.

It is well settled that any irregularity in the conduct of a search or seizure will not vitiate the ultimate recovery of goods. The statements recorded immediately on seizure of the biris, the account books and other circumstances clearly bear out the charge levelled against the appellant. I therefore hold that the impugned order is legally sustainable and is in order. Regarding the plea of the appellant that the quantum has been erroneously calculated. I find that the same is without substance. Indeed this point has been clearly dealt with by the adjudicating authority in para 13.7 of the impugned order wherein he has observed that he himself has perused the three Day Books and found that in the Book No. 11/3 mentioned in Sl. No. 1 of the Annexure, the kattus have been worked out in terms of biris on the page relating to transactions on 3-1-80 by adopting 25 biris per kattu. When a relevant entry in the account books of the appellant clearly indicates that he was adopting 25 biris as the basis for a kattu, I find no substance in the present contention of the appellant with reference to the irregularity or mistake in the computation of the total quantum of biris arrived at.

8. It was submitted that the appellant is an illiterate rustic villager and has never been involved in any offence under the Excise Law or Rules in the past and is in very poor circumstances. Having regard to the facts and circumstances of the appeal, I am inclined to take a lenient view in the matter of imposition of penalty and reduce the same as under : (i) penalty of Rs. 1,900 under Rule 9(2) to Rs. 1,000 (Rupees one thousand only) ; (ii) penalty of Rs. 800 under Rule 52A to Rs. 300 (Rupees three hundred only) ; and (iii) penalty of Rs. 1,850 under Rule 226 to Rs. 1,000 (Rupees one thousand only).

So far as the appropriation of Rs. 2,000 in enforcing the terms of the bond executed by the appellant for the provisional release of the confiscated bids is concerned, I hold that part of the order is not appealable because goods confiscated were provisionally released subject to the bond executed by the appellant, the terms of which are admittedly to the effect that the goods would be produced when the authority called upon him to do so. Since non-compliance of the bond and enforcement thereof are administrative in nature and not quasi-judicial in character, no appeal under law would lie to the Tribunal in that respect. Except for the above modifications in the amounts of penalty, the appeal is otherwise dismissed.


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