The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that Statements recorded during the investigation to be admissible should stand test under Section 9D of the Central Excise Act.
M/s Mittal Pigments Pvt. Ltd, the respondent-assessee is engaged in the manufacture of various excisable products like Lead and Alloy Ingot, Lead Chloride, etc. They were availing Cenvat Credit of duty paid in terms of Cenvat Credit Rules, 2004 (CCR). The Department got information that Amit Gupta was operating some registered dealer and is issuing the invoices with the intent to pass on inadmissible Cenvat credit to numerous manufacturers and dealers without delivery of the goods with the invoices.
Statements from various persons were also recorded in relation to the investigation. The Counsel for the appellant submitted that the Commissioner (Appeals) has miserably failed to consider the admission of Amit Gupta, incriminating documents recovered from the premises of the respondent-assessee, and the denial of transporter for transporting any goods from Amit Gupta and his company as mentioned above to various manufacturer including M/s. Mittal Pigments Pvt Ltd.
The Bench relied on the judgment in C.C. vs. Bussa Overseas Properties Ltd. wherein it was held that Tthe Adjudicating Authorities are bound by the general principles of evidence. Since Commissioner (Appeals) has placed extensive reliance on the statements recorded during the investigation without invoking speaking section (1) of Section 9 D of the Central Excise Act, the findings of confirmation of duty demand due to alleged clandestine removal are therefore liable to be set aside.”
The Coram consisting of P V Subba Rao, Technical Member, and Dr. Rachna Gupta, Judicial Member observed that “In view thereof, we hold that any findings solely based upon the statements cannot be confirmed against M/s. Mittal Pigments Pvt Ltd. unless those statements have stood the test of Section 9(D) of Central Excise Act.”
“The departmental investigating agencies as well as the Adjudicating Authorities have not yet started observing compliance of mandatory statutory provisions i.e. section 9D of Central Excise Act, 1944 and section 138 B of Customs Act, 1962 without which the statement recorded at the stage of inquiry or investigation will not be relevant for the purpose of proving the truth of requisite facts during prosecution” the Tribunal said.
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