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2014 (4) TMI 13 - AT - Central ExciseDuty demand - equivalent penalty u/s 11AC - Undervaluation of ‘Frit’ manufactured - No opportunity for cross examination granted - clandestine removal of frit - gas consumption of the main appellant - Held that:- Adjudicating authority has written eleven pages from Para 10.1 to 10.3 on the aspect as to why appellants request for cross-examination is not justified, however, one fails to understand as to how one entry of Transparent -2 quality Frit, in a pen drive maintained by an employee of ‘Sanyo’ can be applied to the entire period for determining undervaluation during which different varieties of frit are manufactured. There could be variation in the sale prices of the same product as per the transaction price and market negotiations. To test this piece of the evidence, it is perfectly justified on the part of the appellant to seek cross-examination of the persons who maintained the record in the pen-drives. Further, there are factual irregularities in the Panchnamas prepared by the investigation justifying cross-examination of the panchas. Gas consumption varied from season to season, from one quality of frit to other quality of frit, use of better technology etc. It has also been brought on record that after change in the management in Oct 2007 and installation of new furnaces and new refractories, the gas consumption has reduced. Further appellant has also brought on record that due to expert consultations and use of certain fluxes also the gas consumptions per MT of frit have come down. Evidences were also brought on record during the course of hearing regarding installation of an Electricity Generator and replacement of better quality refractories in the kilns by the main appellant. Under the above factual matrix, the method used by the investigation cannot be a sound method to demand duty on assuming 318 SCM of gas required for manufacturing one MT of any quality of frit. The improper method adopted by the Revenue for calculating duty was agitated by the appellants before the adjudicating authority. During conducting of gas consumption studies on 23/ 24.02.2010 by investigation only frit product code ‘OP 202’ was being manufactured. It has been contested by the appellant that different frit product codes may consume different quantities of gas. As the appellant is not undertaking the manufacture of one standard product, in the interest of justice, it will be appropriate to conduct a few more representative studies of different frit product codes in order to arrive at a more realistic gas consumption PMT of frit manufactured - matter is required to be remanded back to the adjudicating authority to extend the opportunity of cross-examination of the persons - and also to conduct a few more representative studies on the gas consumption on the pre-dominant frit codes manufactured by the appellant during the relevant period - Following decision of Basudev Garg vs. Commissioner of Customs [2013 (5) TMI 350 - DELHI HIGH COURT] - Decided in favour of assessee.
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