TMI Blog2015 (4) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... he view that the appellants request for cross examination of Shri Darpan Jain of M/s Kaka Roadlines, Sh. Chandmal Kumawat of M/s Kumawat Industris the fly ash supplier and Sh Kailash Sharma of Shubham Fly Ash Products and M/s Nirmala Fly Ash Industries is genuine. It is also seen that in terms of section 9D(2) of Central Excise Act, 1944, the provision of sub section(I) shall, so far as may be, apply in relation to any proceeding under this act other than proceeding before the court as they apply in relation to proceedings before the court. Under section 9D(1) in course of prosecution proceedings, for offences under the Central Excise Act, 1944, the statement of a person can be used against an assessee only when the person who has made the statement is examined as a witness in that case before the court and the court is of the opinion that having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. - In terms of sub section (2) of section 9D, the provisions of sub-section (1) have to be applied, as far as possible for adjudication proceedings also. Therefore, when the Department s case against an assessee is mainly ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 the factory of the appellant company was visited by the Central Excise Officers and they conducted inquiry to ascertain whether the appellant are using at least 25% fly ash in the ACC pipes and couplers being manufactured by them. In this regard, the officers resumed the accounts regarding receipt and use of the fly ash being maintained by the appellant. At the time of the officers visit to the factory, one Shri Laxman Meghwal, Mixture Master, was present and his statement was recorded under section 14 of the Central Excise Act, 1944, wherein he stated that fly ash was not being used for the last one year and that sometimes fly ash in the ratio of 2 to 3 Kg. per 100 Kg. of cement had been used and that if more than 2 to 3 Kg. of fly ash per 100 kg of cement is used, the pipes will break. He also stated that the fly ash was being received but was being used not for the manufacture of the ACC pipes/ couplers but was being used for earth filling of an adjoining plot. 1.3 Inquiry was made with Sh. Girish Panth, Sales Executive, present at that time and he also broadly corroborated the statement of Sh. Laxman Meghwal. Thereafter, inquiry was made with Sh. Manish Kala, Director of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kota and both these persons in their statements denied having supplied any fly ash to the appellant company. 1.5 It is in view of the above investigation that a Show Cause Notice dated 4.4.2005 was issued to the appellant company for denying the benefit of notification no. 6/2000-CE, 3/2001-CE and 6/2002-CE and demanding the differential duty of ₹ 7,41,941/- in respect of clearances of Asbestos Cement pipes and couplers during period from 01.04.2000 t0 26.09.2000 along with interest thereon under section 11AB and also for imposition of penalty on the appellant under section 11AC. Beside this, the SCN also proposed confiscation of 40M of ACC pipes which has been seized in the appellants factory on the ground that the same has been mis-declared, as being manufactured by using more than 25% fly ash. Beside this, the SCN also sought recovery duty of ₹ 22,030/- in respect of shortage of finished gods found at the time of visit. 1.6 The SCN was adjudicated by the Joint Commissioner vide order-in-original dated 07.10.2005 by which the duty demand of ₹ 4,07,075/- out of total duty demand of ₹ 7,41,941/- and also the duty demand of ₹ 22,030/- in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Departments case against the appellant alleging that the appellant were not using fly ash to the extent of at least 25% is based only on: (a) Statement of fly ash suppliers Sh. Chandmal Kumawat of M/s Kumawat Industries and Sh. Kailash Sharma of M/s Shubham Industries and M/s Nirmala Fly Ash Industries wherein they have stated that they have not supplied any fly ash to the appellant company; (b) Statement of Sh. Darpan Jain of M/s Kaka Roadlines, wherein he has stated that he has issued only bogus GRs showing transportation of fly ash from the premises of M/s Kumawat Industries, M/s Shubham Fly Ash Products and M/s Nirmala Fly Ash Industries, Kota to the appellants premises without actually transporting any fly ash; (c) The statement of Sh. Laxman Meghwal, Mixture Master and Sh. Girish Panth, Sales executive of the appellant company, wherein they have stated either the fly ash was not being used or more it was being used in the ratio of 2 to 3 Kg. per 100 Kg. of Cement; and; (d) Statement of Sh. Manish Kala, Director of the appellant company wherein, agreeing with the statments of Sh. Laxman Meghwal and Sh. Girish Panth, he has stated that the fly ash consumptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cking the use of fly ash in the manufacture of ACC Pipes, no irregularity had been found, merely on the basis of the statements of the suppliers and transporter of fly ash suppliers and of some certain employees and of the Director, the Department cannot infer that the appellant company was not using the fly ash to the extent 25%, that the Department had also drawn sample of the ACC pipes available at the time of their visit on 07.10.2004 but the SCN and the Adjudication order are totally silent about the outcome of the test of those samples, that the statement dated 07.10.2004 of Sh. Laxman Meghwal that fly ash can be used only to the extent of 2% to 3% in the manufacture of ACC pipes and if higher percentage of fly ash is used the pipes will break is factually incorrect as the ISI specifications for ACC pipes permitted the use of fly ash upto 40% and this is also one more reason as to why the statement of Sh. Laxman Meghwal cannot be relied upon without permitting his cross examination, that the appellant has also requested the investigating officers on the spot at the time of search to verify their claim to verify as to whether the fly ash received was being used for land fillin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued only bogus GRs on insistence of Sh. Manish Kala showing transportation of fly ash from the premises of M/s Kumawat Industries, M/s Shubham Fly Ash Products and M/s Nirmala Fly Ash Industries, Kota to the Appellants factory. He emphasized that the statements of Sh. Chandmal Kumawat and Sh. Kailash Sharma have not retracted and Sh. Darpan Jain of M/s Kaka Roadlines retracted his statement only after 7 months and his retraction cannot be treated as credible. Beside this, he pleaded that the appellant have not produced any evidence or proof of payment to the fly ash suppliers which also shows that no fly ash had been supplied. As regards the statement of Sh. Manish Kala, Director of the appellant company, he pleaded that he has not retracted his statement and that since the same is corroborated by the statement of Sh. Laxman Meghwal and Sh. Girish Panth, cross examination of the transporters and suppliers of fly ash suppliers was not necessary and on account of not permitting the cross examination of these persons, the proceedings have not been vitiated. He also pleaded that as pointed out in para 5 of the SCN, the records regarding receipt and use of fly ash were not being proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sh. Girish Panth. (c) The statement of Sh. Chandmal Kumawat, proprietor of M/s Kumawat Industries and statement of Sh. Kailash Sharma, Manager of M/s Shubham and M/s Nirmala wherein they have stated that they had not supplied any fly ash received by them from KTPPS to the appellant company and; (d) Statement of Shri Darpan Jain, proprietor of M/s Kaka Roadlines wherein he has stated that he had issued only bogus GRs on the request of Shri Manish Kala, Director of the appellant company showing transportation of the fly ash from the premises of M/s Kumawat Industries, Kota, M/s Shubham Fly Ash Products, Kota and M/s Nirmala Fly Ash Industries, Kota, to the appellant premises without actually transporting any fly ash. 8. It is seen that there is contradiction between the statements of Sh. Laxman Meghwal and Sh. Girish Panth on one hand wherein they have stated that while fly ash was being received but the same was being used only to the extent of 2 to 3% and the balance quantity of fly ash was being used for land filling/ levelling of an adjoining plot and the statement of Sh. Darpan Jain of M/s Kaka Roadlines and statement of Sh. Chandmal Kumawat and Sh. Kailash Sharma of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) of section 9D(1), that is, when the person who made the statement is dead or cannot be found, or is incapable of acting evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay, or absences which under the circumstances of the case, the court considers unreasonable. In terms of sub section (2) of section 9D, the provisions of sub-section (1) have to be applied, as far as possible for adjudication proceedings also. Therefore, when the Departments case against an assessee is mainly based on statements given by some persons and those statements are not corroborated by some other independent evidence, and contradict each other, for using those statements, against the assessee for proving the charge of duty evasion against their, their cross examination would be necessary. 9. In view of this we are of the view that the rejection for the appellants request for cross examination was not correct and this has vitiated the proceedings. Therefore, the impugned order is set aside and the matter is remanded to the Original adjudicating authority for de novo adjudication after permitting the cross examination of the witne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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