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2022 (3) TMI 936 - AT - Central ExciseClandestine removal - shortage of finished goods - relied upon documents for demand provided or not - during adjudication in remand cross-examination were allowed or not - revenue has discharged burden to prove or not - HELD THAT:- Appellant’s Factory was searched on 08.02.2011. Excise Duty demand of ₹ 23,613/- only is on shortage of 3.275 M/T of finished goods SS Patta Patti found at the time of search as compared to the recorded stock in daily stock account RG-1 and it has been concluded in O-I-O/O-I-A that the said quantity of 3.275 M/T valued at ₹ 2,29,250/- attracting Excise duty of ₹ 23,613/- was removed clandestinely by the Appellant M/s Sarvottam Steel Industries. Other demands worked out are totally of ₹ 13,30,355/- on the basis of LRs of M/s Alpesh Roadways, found from Factory of Appellant M/s Sarvottam Steel Industries, and from offices of of M/s Alpesh Roadways, [Transporter] at Ahmedabad and Rajkot alleging clandestine manufacture and removal of the finished goods by M/s Sarvottam Steel Industries, based on such LRs. Cross-examination of witnesses - HELD THAT:- By not allowing Cross Examination of witness u/s 9D of Central Excise Act 1944, adjudicating authority has destroyed case of Revenue and the entire case of Revenue in remand has vitiated proceedings, making the duty demand unsustainable for violation of the Principles of Natural Justice. Except these statements of witnesses and co-noticee, there is nothing on record to establish clandestine manufacture or removal of finished goods from the Factory of Sarvottam Steel Industries. Thus, when in remand Adjudicating Authority has neither provided all documents sought by Appellants nor allowed cross examination of any of the witnesses, then, all such statements and documents need not be considered as valid evidences and consequently, duty demands based thereon deserves to be dropped in the facts of this case. Shortage of 3.275 M/T - HELD THAT:- Settled judicial view is that stock taking would be conducted in a proper manner, which should obviously be supported by some material such as, weighment slip, counting slip etc., as the case may be. It cannot be on the basis of eye estimation or otherwise of employee witness [Amrishbhai] who is not allowed for cross examination to ascertain facts on shortage of goods found on 08-02-2011. Unsupported statement of representative of the assessee during stock verification, without allowing his cross examination is not sufficient to prove actual weighment as alleged - demand of ₹ 23,613/- on alleged shortage found on 08-02-2011 is not sustainable in the law. There are force in submissions of Appellants that in the remand proceedings, adjudicating authority has not followed judicial discipline and by not allowing cross examination of witness as sought by Appellants, the entire proceedings have been vitiated in facts of this case. In the second round of litigation, the Commissioner(Appeals) has also brushed aside submissions of Appellant by only general findings - as per Remand directions by Commissioner (Appeals) in the first round of litigation, allowing the cross examination of witness was mandatorily required in the facts of this case, to arrive at correct fact finding in the interest of justice. There is no other material placed on record by Revenue to justify excise duty demands. Therefore, the duty demand is also not sustainable on this legal ground alone. The disputed excise duty demands of total ₹ 13,53,968/- deserves to be set aside - When the duty demand is not sustained against main Appellant M/s Sarvottam Steel Industries, consequential demands of interest and imposition of penalties on all the Appellants would not survive and the same are also set aside - Appeal allowed - decided in favor of appellant.
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