Commissioner of Central Excise is not a Court: Calcutta HC allows Appeal in absence Retraction of Statements [Read Order]

A Division Bench of the Calcutta High Court allowed appeal by the Revenue as there was absence retraction of statements and opined that Commissioner of Central Excise is not a Court.

The appeal filed by the revenue under Section 35G of the Central Excise Act against the final order passed by the Customs, Excise and Services Tax, Appellate Tribunal (CESTAT) by which the appeal filed by the respondent, M/s. Ashirwad Foundries Pvt Ltd and Anothers challenging the order passed by the Commissioner of Central Tax, (GST & CEX) was allowed setting aside the service tax demanded and deleting the penalty imposed was deleted in its entirety.

The respondent is a manufacturer of castings falling under Chapter 73 of the First Schedule to the Central Excise Tariff Act, 1985. A notice to show cause was issued to the respondent alleging that they have contravened the provisions of Rule 4, 6, 8 and 12 of the Central Excise Rules, 2002, read with Rule 3, 4 and 9 of the CENVAT Credit Rules, 2004 in as much as they fraudulently reaped financial gain by availing inadmissible CENVAT Credit of Rs. 5 crores.

What weighed in the mind of the tribunal was that during the course of search at the factory premises of the respondent incriminating documents were not recovered nor any shortage/excess of raw materials/finished goods were found by the officers of the anti evasion wing. Further the tribunal held that the statement recorded under Section 14 of the Act cannot be relied upon as the evidence unless the provisions of the Section 9D of the Act had been followed

The Bench consisting of Justice TS Sivagnanam and Justice Hiranmay Bhattacharyya observed that “The tribunal had “picked holes” in the adjudication process forgetting that the Commissioner of Central Excise is not a court but an adjudicating authority. On going through the order and also the materials which were placed on record, we are fully convinced tohold that there was sufficient material available with the adjudicating authority to make out a case of fraudulent availment of credit and consequently, the tribunal erred in reversing the order passed by the adjudicating authority

“At no point of time there has been any retraction of the statements recorded under Section 108 of the Customs Act” the Court opined.

To Read the full text of the Order CLICK HERE

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