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2019 (1) TMI 429 - AT - Central ExciseClandestine manufacture and removal - TMT bars - certain documents resumed from the premises of M/s Pahalwan Goods Carrier - on the basis of records resumed from the premises of transporter and the statement of the proprietor of the transport firm - denial of cross-examination of Shri Mahipal Yadav, Proprietor of M/s Pahalwan Goods Carrier - principles of natural justice. Whether the charge of clandestine removal can be made on the basis of documents resumed from the premises of a third party without independent corroboration? Held that:- Neither the factory premises of the Appellants has been searched nor any discrepancy in the stocks of finished goods & raw materials has been found by the Central Excise Officers. No investigation has been conducted by the officers at the Appellant’s end, as to whether they have the capacity to produce the alleged quantity of TMT bars, electricity consumption, purchase of raw materials, its transportation and payment to the suppliers. There is no investigation about the buyers of goods involving duty of more than ₹ 4.53 Crores. The entire case has been made upon the recovery of some documents from the third party premises. It is well settled law that allegations and findings of clandestine removal are required to be made upon cogent and positive evidence which corroborate unaccounted production and clearance of finished goods - In the present matter, no such evidence is available on record at all, except the third party records which cannot be relied upon as admissible piece of evidence. The allegation of clandestine manufacture and removal of finished goods cannot be proved merely on the basis of third party records without independent corroboration. Cross-examination of statements denied - principles of natural justice - Held that:- The impugned Order has been passed in gross violation of the principles of natural justice inasmuch as the cross-examination of Shri Mahipal Yadav, Proprietor of transport firm was not allowed though the statement recorded from him has been relied upon by the learned Adjudicating Authority - demand on this ground also not sustainable. Demand not sustainable - appeal allowed - decided in favor of appellant.
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