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2019 (1) TMI 1823 - AT - Central ExciseLevy of penalty u/r 26 of CER - Clandestine removal - Steel Ingots - evasion of duty - willful suppression and mis-statement as excess stock of raw material was found in the factory premises - entire case has been made against the Appellants on the basis of documents and statement of witnesses - third party evidences - opprotunity of cross-examination not provided - principles of natural justice - HELD THAT:- Though the Appellants had requested for the cross examination of the witnesses whose statements have been relied upon, the learned Commissioner has declined the same without assigning any reason. It has been held by Supreme Court, High Courts and this Tribunal in a number of cases that when Revenue places heavy reliance on certain statements of the witnesses recorded during the course of investigation the Noticees are well within their right to seek cross-examination. In fact using a statement, the deponent of which has not been cross-examined, amounts to using evidence which the Appellant/Noticee has no opportunity to question. Denial of cross-examination results in gross violation of principles of natural justice and not allowing fair hearing to the Noticee. Further, the provisions of Section 9D of the Central Excise Act are very specific which have not been complied with in the present matter. Section 9D clearly mandates that a statement shall be relevant only if the person concerned is examined as a witness and the Adjudicating Authority is of the opinion that the statement should be admitted in evidence. No doubt there are certain exceptions. But it is not the case of the Revenue that any of those exception is applicable in the present matter. The Revenue has not adduced on record any independent evidence to corroborate the contents of those documents. Without any independent corroboration it cannot be presumed that the entries contained in those documents pertain to the Appellant No.1. The tallying of some entries in those documents with the records of the Appellant may raise suspicion but cannot be used to establish malafide. The onus to prove clandestine manufacture and clearance of excisable goods is on the Revenue by adducing cogent and tangible evidence which is lacking in the present matter. Clandestine removal of goods is a serious charge and cannot be leveled on the basis of presumption, assumptions and surmises. It is settled law by the decision of the Courts and this Tribunal that the charge of clandestine manufacture and removal cannot be leveled on the basis of documents recovered from the premises of a third party. There are no force in the argument of the learned AR for the Revenue that the three cheques given by the Appellants towards duty amounts to admission of removing the goods without payment of duty. The learned Advocate has controverted the said argument by submitting that Binod Kumar Jaiswal was threatened to give the letter dated 18.07.2006 with three cheques. Mere giving of cheques during the course of investigation would not amount to admission of charge of clandestine removal in absence of corroborative evidence about procurement of raw material/physical manufacture, use of electricity, transport of finished goods and statement of buyers, etc. Revenue has not established the charge of clandestine manufacture and removal of finished goods by the Appellants No.1 - Appeal allowed - decided in favor of appellant.
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