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2019 (4) TMI 175 - AT - Central ExcisePenalty u/r 26 of Central Excise Rules, 2002 - clandestine removal of cigarettes - fictitious firms - cross-examination not carried out properly - reliability on the statements - Held that:- The main objection raised by the Ld. AR this Tribunal is functus officio as the appeals have already been dismissed by this Tribunal for non compliance of the stay order and the order of this Tribunal have been merged with the order of the Hon’ble High Court. the appeals of the appellants have already been restored by this Tribunal vide its order dt.27.8.2018 and the said order has not been challenged by the Revenue. Therefore, the objection raised by the ld.AR is not sustainable and accordingly, the same is discarded. During the relevant period in terms of Rule 6 of Central Excise Rules, 2002, the factory of the appellants was under physical control of the Superintendent or Inspector of Central Excise, wo were required to assess the duty payable before removal by M/s. Pelcan. However, as per Chapter 4, cigarettes would have been removed only on invoice which shall be countersigned by the Central Excise Superintendent. When the department itself is controlling manufacturing process of the appellant, in that circumstance, without hand in gloves with the Central Excise officers, the clandestine removal cannot take place - Moreover, in this case, no incriminating documents received from the possession of the appellants. Moreover, no extra amount has been received from the custody of the appellants which can be presumed the sale of clandestine removed goods. he whole case of the Revenue is based on the third party document and the statements of various persons whose cross examination has not been granted in terms of Section 9D of the Central Excise Act,1944. The allegation based on the third party document without any corroborative evidence cannot be the basis to allege clandestine removal of the goods. In the absence of examination-in-chief, allowing the cross-examination, the adjudication is a futile exercise. As the said procedure has not been followed by the authority below and the appeal of M/s. Pelican has already been dismissed. In that circumstance, the statements of witnesses on the basis it has been alleged that the appellants are engaged in the activity of clandestine removal without payment of duty are not admissible. Nod corroborative evidence have been brought on record to support the statement of witnesses and the whole case is based on third party documents, the penalties on the appellants are not imposable. Penalties set aside - appeal allowed - decided in favor of appellant.
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