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Statement
obtained under duress and Mental Pressure is not admissible as voluntary
admissions and burden of proof for the alleged clandestine removal rested with
the department
Case Details: Sanjay Goel (Director of M/s Master India Pvt.
Limited), M/s M. S. Metal Co., Sunil Gupta (Partner of M/s M. S. Metal Co.),
and M/s Master India Pvt. Limited. Vs. Commissioner of Central Goods and Service Tax,
Delhi (East).
Case Numbers:
- Excise Appeal
No. 50465 of 2019-SM
- Excise Appeal
No. 50533 of 2019-SM
- Excise Appeal
No. 50534 of 2019-SM
- Excise Appeal
No. 50535 of 2019-SM
Court Name:
Customs,
Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, Principal
Bench - Court No. IV.
Date of Order: Final
Order Nos. 51244-51247/2021 dated 12th April 2021.
Date of Hearing:
5th
April 2021.
Summary of the Case: This
case revolves around the adjudication of an appeal filed by several appellants,
including directors and partners of M/s Master India Pvt. Limited and M/s M. S.
Metal Co., against the order passed by the Commissioner, Central Goods &
Service Tax, Delhi East. The appeal contested the demand and penalties imposed
due to alleged clandestine removal of copper ingots and rods without proper
duty payment. The appellants argued that the demand was based on documents and
statements obtained under duress, which they retracted during
cross-examination.
Facts of the Case:
1.
M/s Kaycee Electricals was engaged in the
manufacturing of copper wire ingots. The premises of M/s Kaycee Electricals and
its partners were searched on 21st September 2005.
2.
During the search, certain documents
(kachha parchies) and unaccounted stock were found, along with cash, leading to
the issuance of show cause notices alleging clandestine removal of copper
ingots by the appellants.
3.
The appellants were also involved in the
manufacturing of copper wire and undertook job work for others.
4.
The initial order was passed on 27th March
2009, which was challenged, leading to a remand by the CESTAT for denovo
adjudication. The subsequent order dated 26th October 2018 confirmed the demand
against the appellants but dropped charges against M/s Kaycee Electricals.
Submission by Petitioner
(Appellants):
1.
The appellants argued that the demand was
based on documents recovered from M/s Kaycee Electricals and that these
documents were not directly related to them.
2.
The statements made during the
investigation were retracted during cross-examination, stating that they were
made under threat of arrest.
3.
The appellants claimed that the
Adjudicating Authority incorrectly relied on sections of the Evidence Act and
failed to comply with the Tribunal’s order for denovo adjudication.
Submission by Respondent
(Department):
1.
The respondent argued that the appellants
had admitted to the clandestine removal of goods and that these admissions were
corroborated by documents recovered during the search.
2.
They maintained that the statements made
during the investigation were voluntary and should be treated as conclusive
evidence.
Findings and Judgment by
the Court:
·
The CESTAT found that the Adjudicating
Authority had not correctly interpreted the Tribunal's remand order and had
failed to allow the proper cross-examination of witnesses, which was crucial
for a fair adjudication.
·
The Tribunal held that the statements
obtained under duress were not admissible as voluntary admissions and that the
burden of proof for the alleged clandestine removal rested with the department,
which had failed to provide concrete evidence.
·
The reliance on third-party documents and
statements from M/s Kaycee Electricals' employees was insufficient to sustain
the demand against the appellants.
·
The Tribunal set aside the order under
challenge, noting that the Adjudicating Authority had improperly applied
sections of the Indian Evidence Act.
Conclusion: The
Tribunal allowed the appeals filed by the appellants, setting aside the order
passed by the Commissioner, Central Goods & Service Tax, Delhi East, and
warned the Adjudicating Authorities to ensure proper compliance with remand
orders in the future.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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