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TMI Blog2010 (4) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... s are engaged in manufacture and trading of excisable goods i.e. Slotted Angles, Shelves, Cable Trays and other Sheet Fabricated goods classifiable under Chapter heading 7216, 7308 and 9403 respectively of the first Schedule to the Central Excise Tariff Act, 1985. The appellants were not registered at the relevant time under the Central Excise Act and rules made thereunder. 4. In the course of patrolling in Naraina Industrial area on 27-12-2005 the officers of preventive branch of Delhi Commissionerate spotted one loaded truck bearing registration No. HR-47-5887 having been parked outside factory premises of the appellants. On inquiry the driver of the truck informed that it was loaded at the appellant's premises and produced the documents which disclosed bill pertaining to one Surya Enterprises, R-80, Vani Vihar, Uttam Nagar, New Delhi, issued in the name of Bharat Electricals, C/o VIRSA, IT Park, Tower-C, IInd Floor, Chandigarh but could not produce any document evidencing loading of goods at appellants' factory. Pursuant to the further investigation carried out, the same disclosed certain irregularities committed by the appellants which warranted demand of duty for the period f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from the record. Several suppliers had shown the appellants as sundry debtors in their books of account and some suppliers are also reflected as sundry creditors in appellants' books of accounts and, therefore, the statements of the suppliers contrary to those materials ought to have been rejected outright. 10. Referring to the statements of Shri Mahesh Kaushik it is sought to be contended that he still continues to have business with the appellants and that shows that the sales affected by his firm to the appellants were above board and genuine sales contrary to the claim made by him in his statement. Besides some of the suppliers have also confirmed that they have actually made sales of slotted angles/channels, etc. to the appellants. 11. The statutory record maintained by the appellants disclose volume of the manufacturing sales and trading sales by the appellants and the same is also reflected from the balance sheet for the respective years. The returns filed by the appellants with the Sales Tax/VAT department were never disputed. During the relevant period the appellants had paid the sales tax to the tune of Rs. 58,58,434/-. 12. The payments for all purchases by the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading Corpn., a manufacturing unit revealed that it operated from B-66, Naraina Industrial Area which were the premises owned by Shri Subhash Khattar and that trading godown of the party was also located in the same premises. Shri Subhash Khattar admitted in his statement that SSP Manufacturing & Trading Corpn. is a proprietorship firm owned by Shri Ashok Arora who is the brother of shri Bhushan Arora, one of the directors of the appellant firm. As the appellants and SSP Mfg. & Trading Corpn. were manufacturing similar products, their consumption of electricity over a period of last 5 years was verified for comparison wherein it was revealed that electricity consumption of SSP Mfg. & Trading Corpn. was extremely low as compared to that of the appellants whereas the actual production was same. After examination of respective balance-sheet of both the firms it was also revealed that the ratio of wages of manufacturer, job work expenditure and machinery installed was not found comparable. Scrutiny and comparison disclosed that the appellants had suppressed their production which they had sown in the account of SSP Mfg. & Trading Corporation. 15. As regards the contention regarding cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased on the statements of witnesses which have not been subjected of being tested by way of cross-examination of the deponent. In other words, it is a case of the appellants that the deponent's statement cannot be relied upon unless the deponent is cross-examined and in this case no such opportunity was made available to the appellants. 20. It is not in dispute that pursuant to the request by the appellants for cross-examination of the deponents they were summoned by the adjudicating authority. However, none of them appeared or made themselves available for cross-examination by the appellants. It is also not in dispute that pursuant to the failure of those persons to appear before the adjudicating authority pursuant to the summons issued to them, the appellants thereafter did not insist for making those deponents available for cross-examination. Instead, the appellants requested for ignoring their statements while deciding the matter. In other words, merely because there was failure on the part of the deponents to answer to the summons issued by the adjudicating authority at the instance of the appellants, the appellants themselves did not pursue their right to cross-examine those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain circumstances, this right of cross-examination can be taken away." Having held so, the Hon'ble High Court analysed the Section 9D as under :- "Section 9D of the Act stipulates following five circumstances, already taken note of, under which statements previously recorded can be made relevant. These are:- (a) when the person who had given the statement is dead; (b) when he cannot be found; (c) when he is incapable of giving evidence; (d) when he is kept out of the way by the adverse party; and (e) when his presence cannot be obtained without an amount of delay or expense, which the Officer considers unreasonable. Hon'ble High Court thereafter held thus :- "Interestingly, the learned senior counsel for the petitioners did not join the issue that the aforesaid circumstances are not exceptional circumstances. They are the circumstances which naturally would be beyond the control of the parties and it would not be possible to produce such a person for cross-examinatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble High Court observed thus :- "In other words, it seems to be a fairly settled position in law that it is not necessary that persons whose statements have been previously recorded must be examined in the presence of the party against whom such previous statements are intended to be used. The rules of natural justice do require that their previous statements must be made available to the party against whom they were intended to be used and such party must be given a fair opportunity to explain the same or comment on them. What would amount to fair opportunity would depend upon the facts and circumstances of each case...." It was also held by the Bombay High Court therein that :- "Formal cross-examination may be a part of procedural justice but that does not mean that the content of natural justice excludes the right of cross-examination. As stated earlier, the rules of natural justice do cast an obligation on the Tribunals that they should not act on any information which they may receive unless they put it to the party against whom it is to be used and give him a fair opportunity to explain or comment on it and what is fair opportunity must depend upon the facts and ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive him opportunity to cross-examine the witnesses would not violative of principle of natural justice. It was also ruled that the Customs officials are not police officers. The confession though retracted is an admission and binds the petitioner. 26. Relying upon the decision of the Apex Court in Surjeet Singh Chhabra case (supra) this Tribunal in Jagdish Shanker Trivedi v. Commissioner of Customs, Kanpur - 2006 (194) E.L.T. 290 (Tri.-Del.) held that admission made by an assessee binds him and, therefore, failure to give him the opportunity to cross-examine the witnesses was not violative of principles of natural justice. It was specifically held that "principles of natural justice do not require that in matters like this, persons who had given information should be allowed to be cross-examined by the co-noticees on the statements made before the customs authorities. If cross-examination is to be allowed as a matter of right then in all cases of conspiracy and joint dealings between the co-noticees in the commission of the offences in connection with the contraband goods, they can bring about a situation of failure of natural justice by a joint strategic efforts such co-noticees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relation to those statements. However, those witnesses failed to appear before the authorities. As already pointed out above undisputedly this was to the knowledge of the appellants and there was no efforts made on the part of the appellants to insist for cross-examination of those witnesses and/or to insist for their presence for cross-examination. Instead the appellants themselves choose to make a submission to discard the statements of those witnesses and to decide the matter ignoring those statements. It is not a matter of right for any assessee to contend that the statements of witnesses should be discarded. His right is only to insist for cross-examination of the witness. Even in cases where the presence of the witness cannot be secured on account of delay, the authority is not forbidden from relying upon the statement of such witness which is apparent from Section 9D of the said Act. In the case in hand, since the appellants themselves choose not to insist for presence of witnesses and consequently for cross-examination of those witnesses, as rightly submitted on behalf of the respondent, it is too late in the day for the appellants to contend that there was failure on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the business of selling iron sheets to the party and descriptions in the invoices were incorrectly stated at the request of the party. Shri Vijender Singh has also admitted that he had issued bills without supply and manufacture of the items mentioned in the bills and for that purpose he was getting fixed commission from the party. 32. Undisputedly the statements of supplier disclose sufficient evidence in support of the case put forth by the respondent against the appellants. It is the case of the appellants themselves that the statements of suppliers are the bases for arriving at the findings adverse to the appellants. Only objection on the part of the appellants is that those statements were not subjected to verification by way of cross-examination. As already observed above, absence of cross-examination is entirely on account of failure on the part of the appellants to take appropriate step to exercise the said right. 33. In any case as rightly pointed out on behalf of the respondent the overall investigation clearly discloses clandestine manufacture and removal of the excisable goods with intention to evade excise duty. The records also disclose that many of the suppliers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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