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2016 (10) TMI 858 - AT - CustomsLevy of penalty - Principal of natural justice - demand based on statement of dealers - cross-examine the dealers whose statements were relied upon - 100% EOU - manufacture of readymade garments - duty free material imported and indigenously procured for use in the export of these garments diverted - finished products actually not exported - Held that: - during the course of investigation of evasion of Customs as well as Central Excise duty by M/s Dhanlaxmi, the officers also investigated the offence committed by other co-noticees including the present two appellants. On the basis of statements and other documentary evidences, both the appellants have been penalised. It is their common grievance that inspite of their specific request for cross examination of witnesses, whose statements have been relied in the issuance of Notice to them, the same was not allowed by the learned Commissioner during the adjudication proceedings, hence the findings recorded against them and imposition of penalty, is in gross violation of principles of natural justice. - reliance placed on the decision of Andman Timber Industries Vs CCE Kolkata II [2015 (10) TMI 442 - SUPREME COURT] where it was held that not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. The Appellants allowed to cross examination of the witnesses requested by them in their respective reply to the Show Cause Notice; whose statements were relied upon in the Notice and used against the Appellants. The question of imposition of penalty would arise only thereafter - Needless to say that reasonable opportunity of hearing be allowed to the Appellant - appeal disposed off.
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