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2005 (5) TMI 224 - CESTAT, MUMBAICenvat/Modvat - Job work - evasion of Central Excise duty - Demand and penalty - seeking cross-examination - principles of natural justice to the manufacturer - HELD THAT:- Perusal of Rule 209A does not indicate that for aiding and abetting of availment of incorrect Modvat credit penalty could be imposed without arriving at a liability to confiscation of excisable goods. The allegation is that inferior goods have been used and that credit has been availed on AS 304 grade steel, that no such steel of AS 304 grade arrived at the factory. If that would be so, then there were no goods, which were liable to confiscation at best it would be a case of taking credit without goods coming and be a case of incorrect account maintained for ulterior motive. That could not be a cause for penalty under Rule 209A. No penalty for non-existent goods under Rule 209A could be imposed. Therefore, the penalty imposed under Rule 209A cannot be upheld for incorrect accounting. The penalties on these two appellants i.e. Shri C.I. Vaghani & Shri Satish Kulkarni are to be allowed after setting aside the penalty imposed on them, irrespective of the allegations in the notice sustained or other more. was not admissible as narrated above. He, therefore, has rendered himself liable for penalty under Rule 209A of CER, 1944. The request for cross-examination of the various persons whose statements have been relied upon, to bring on record evidence of one of the varieties of steel was substituted it was imperative to be granted. The denial of cross-examination has resulted in the violation of principles of natural justice to the manufacturer. The Commissioner's finding on this issue as well as the attempt of non-supply of the documents relied upon and required by defence would itself render the order to be set aside on grounds of denial of Natural Justice and remand be called for re-adjudication. Thus, the appeals are allowed.
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