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2015 (4) TMI 775 - CESTAT NEW DELHI

2015 (4) TMI 775 - CESTAT NEW DELHI - TMI - Clandestine removal of goods - Denial of cross examination request - principle of ejusdem genris and harmonious construction - arbitrarily rejection of the report of Institute of Paper Technology - Held that:- In this case charge of clandestine removal has been alleged against the appellants on the basis of certain records and statements of some persons relied upon were not allowed to be cross examined remained unproved. Moreover, report of the Institu .....

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ermined the production capacity for working plant during the period 1996-97 and 1997-98. Therefore, without tangible evidence or without being obtaining expert s opinion on the issue the said report determining the production capacity cannot be rejected by the adjudicating authority.

Moreover, machine log sheets were specifically directed by the Tribunal to examine in depth but the adjudicating authority rejected those machine log sheets on the ground that the same are manipulated and .....

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r the Appellant : Shri C. Harishankar, Advocate For the Respondent : Shri R. K. Mishra, A.R. ORDER Per Ashok Jindal : The appellants are in appeals against the impugned order wherein the Commissioner has confirmed the demand of duty of ₹ 25,74,737/- against M/s.Kawatra Papers Ltd. for the period 1.7.1994 to 31.3.1997, June,1997 and 1997 to 1998 alongwith interest and confiscation of building, plant and machinery of M/s.Kawatra Papers Ltd.which was allowed to be redeemed on payment of redem .....

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as alleged that M/s.Kawatra Papers Ltd (KP) is involved in the clandestine removal of paper to M/s.Himgiri Paper Enterprises Pvt.Ltd. (HP) during the period 1.4.1994 to 31.3.1997. To establish these charges, the documents which were relied upon as under:- (a) records showing despatch by HP to different customers during the period 1.7.94 to 7.7.97 (b) records showing receipt of paper by HP during the period 1.7.1994 to 7.7.1994 (c) Stock register maintained by HP during the period 1.1.1995 to 7.7 .....

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. 3. Apart from these documents, the statements of following persons were relied upon: (i) ShriSatish Sharma, sales man with HP (ii) ShriJagdishVerma, godown keeper, of HP (iii) ShriGopal Singh Rawat, accountant with HP (iv) ShriJoginder Kumar Kawatra, MD of HP (v) ShriY.P.Kawatra, MD of KP. 3. In the earlier round of litigation, the demand was confirmed and said order was challenged by the appellant before this Tribunal and this Tribunal remanded the matter back to the adjudicating authority to .....

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examination, the adjudicating authority confirmed the demand on the ground that no cross examination was allowed by this Tribunal while remanding the matter and cross examination is not absolute right. It also held that there was corroborative statement by Shri Joginder Kawatra and also confirmed the allegations. It was held that report of the Institute of Paper Technology, Roorkee is not acceptable and machine log sheets could be easily manipulated. Aggrieved with the said order, the appellants .....

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Cigarettes vs.CCE-2009 (242) ELT 189 (Del.), Govind Mills Ltd.-2013 (294) ELT 361 (All) and Arya Fibres Pvt.Ltd. vs. CCE-2014-TIOL-15-CESTAT-AHM. He submits that the statements could not be treated as relevant to prove the truth of the contents thereof, for failure to follow the procedure prescribed in section 9D of Central Excise Act, 1944. To support this, he relies on the decision of the Tribunal in the case of Swiber Offshore Construction Pvt.Ltd. vs. CC-2014 (301) ELT 119 (T). He further su .....

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e appellants. Moreover the appellant was engaged in the activity of clandestine removal of the goods in the guise of clearance to HP and the same was corroborated by the statements of Shri Jagdish Verma, Shri Satish Sharma and Shri Gopal Singh Rawat which have been accepted by the Shri Joginder Kawatra. Therefore, the impugned orders are required to be upheld. 6. Heart the parties and considered the submissions. 7. In the earlier round of litigation, this Tribunal has recorded the contentions of .....

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t left side figures represented clearances, not entered in RG-1 register; that no testimony has been elicited from any one to substantiate this assumption; that it was pointed out if the two figures were totalled, the resultant clearance would exceed 100% of the capacity utilization of the appellant, which was not correct. He submits that a number of points were raised before the Commissioner, Central Excise which were not attended to by him nor were commented upon. He, therefore, prays that the .....

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ppellants before the learned Commissioner in reply to the show cause notice as also at the time of hearing. We note that certain documents are very material for a decision in the appeals like machine, log sheets and the capacity of the paper mills, which were not considered adequately and examined in dept. We consider it a fit case for remand. In the circumstances, we remand the cases to the learned Commissioner to examine the various contentions and pass a speaking order specifically in regard .....

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not include the plea for cross examination and as such this plea was not available to the appellant in the remand proceedings. It was also held that cross examination was not an absolute right, and it was open to the adjudicating authority to rely on the statements without allowing cross examination. It was also held by the adjudicating authority that private records also established the allegation and he did not rely on the report of the Institute of Paper Technology for consideration capacity .....

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ppeals filed of the appellant in earlier round of litigation, this Tribunal has specifically remanded the matter back to the adjudicating authority to examine the various contentions made before this Tribunal. Admittedly learned Counsel for the appellants sought cross examination of Shri Jagdish Verma, Shri Satish Sharma and Shri Gopal Singh Rawat in the initial adjudication proceedings and that contention was not considered by the adjudicating authority at that time and in that context this Tri .....

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ment is used against the assesse, an opportunity of cross examination of the persons who made those statements ought to have given to the assesse. Admittedly in this case, the statements of Shri Jagdish Verma, Shri Satish Sharma and Shri Gopal Singh Rawat have been relied on and cross examination was not granted by the adjudicating authority to the appellants. The same is held gross violation of principles of natural justice. 11. I further observe that the issue of clandestine removal of the goo .....

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) Instances of actual removal unaccounted finished goods (not inferential or assumed) from the factory without payment of duty; (c) discovery of such finished goods outside the factory; (d) instances of sale of such goods to identified parties (e) receipt of sale proceeds, whether by cheque or by cash, of such goods by the manufacturers or persons authorised by him; (f) use of electricity for in excess of what is necessary for manufacture of goods otherwise manufactured and validly cleared on pa .....

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statements of some the persons may be even from responsible official of manufacturers or even its director/partner who are not permitted to cross examine and thereafter held charge of clandestine removal is not sustainable. 13. In this case charge of clandestine removal has been alleged against the appellants on the basis of certain records and statements of some persons relied upon were not allowed to be cross examined remained unproved. Moreover, report of the Institute of Paper Technology to .....

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