Commissioner Vs. Maruti Fabrics [(2014) 47 taxmann.com 298 (Gujarat)]
In the instant case, Maruti Fabrics (the Assessee) clandestinely removed certain goods. Thereafter, the Assessee filed an application before the Settlement Commission (the SC) admitting the clandestine removal of goods. The SC sent back the case to the Adjudicating authority who relied upon the Assessee’s admission before the SC and confirmed demand on the ground of clandestine removal. The Assessee filed an appeal before the Hon’ble Tribunal wherein it was held that the Revenue had failed to establish the clandestine clearance of the goods by the Assessee. It was also held that the statements of the Assessee were retracted later.
The Revenue filed an appeal before the Hon’ble Gujarat High Court against the order of the Hon’ble Tribunal and contended that in the application before the SC submitted under Section 32E(1) of the Central Excise Act, 1944 (“the Excise Act”), the Assessee specifically admitted the charges as per the Show Cause Notice and duty liability. Therefore, the said admission is required to be considered by the Adjudicating authority to establish the clandestine clearance of the goods by the Assessee.
The Hon’ble High Court held that in terms of sub-section (2) of Section 32L of the Excise Act, whatever is admitted by the Assessee while submitting the application before the SC under Section 32E(1) of the Excise Act, straightway cannot be said to be admission on behalf of the Assessee of accepting the liability.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: firstname.lastname@example.org)