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2016 (4) TMI 622 - CESTAT NEW DELHI

2016 (4) TMI 622 - CESTAT NEW DELHI - 2016 (338) E.L.T. 113 (Tri - Del.) - Absence of examination in chief - whether the deponents whose statements have been relied upon by the adjudicating authority were not put to examination-in-chief before providing an opportunity of cross examination? - misuse of brand name - Held that:- As during adjudication, the adjudicating authority is required to first examine the witness in chief and also to form an opinion that having regard to the facts and circums .....

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available during the course of adjudication and the same has not been considered judicially. - In view of the above, the impugned order is set aside. The adjudicating authority shall be at liberty to re-adjudicate the matter after following the procedure laid down under section 9D of the Act - Appeal No. E/768/2011, Appeal Nos. E/55867,56023-56025/2014 - Final Order No. 50938-50942/2016 - Dated:- 4-3-2016 - Ashok Jindal, Member (J) And B. Ravichandran, Member (T) For the Appellant : Shri R K .....

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y of unaccounted manufacture of 'Kanchan/Kanchann' brand gutka and 'wiz' brand pan masala by clandestinely installing and operating FFS machines from an undeclared and unregistered premises of Sandeep Poultry Farm, Khasra No.63/3, Village Khera Khurd, New Delhi-110082 As on manufacture of gutkha and pan masala the duty is payable under the compounded levy scheme on the basis of number of pouch packing machine installed in the factory and MRP of the poches manufactured by such pou .....

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ayable under the compounded levy scheme. An investigation was conducted on 31.10.2008/1.11.2008 and it was found that at the premises of Sandeep Poultry Farm five pouch packing machines were installed out of which four machines manufacturing 'Kanchan/Kanchann' brand gutka bearing the marking manufactured by M/s.Kuber Tobacco India Ltd.,30-K, Siraspur, Deihi-42. As the activity done at the premises of Sandeep Poultry Farm and the five machines installed were not declared to the Central Ex .....

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i Dhanpat Singhee, Director, Shri Chatar Singh Baid and Shri Vikas Malu were imposed of ₹ 10,00,000/-, ₹ 8,00,000/- and ₹ 8,00,000/- respectively for the period September, 2008 to November, 2008. Aggrieved from the said order, the appellants are in appeal and against dropping the demand for August, 2008, the Revenue is in appeal before us. 3. As all the appeals are arising from a common order, therefore they are disposed of by this common order. 4. Learned Counsel appearing on .....

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e appellant by certain elements who were manufacturing duplicate goods bearing M/s.Kuber brand names and clearing them in the market. It was also submitted that the whole affair was the result of conspiracy between Dhanpat Singhee, its ex-director in collusion with Shri Om Prakash Dubey, the tenant of Sandeep Poultry Farm, and Rajesh Kumar Dubey and Manoj Triparthi and others and it was also submitted that the names of S/Shri Moolchand Malu, Vikas and C.S.Baid have been unnecessarily been dragge .....

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ence in the adjudication proceedings, so that the commissioner could not have relied on the said statements, in view of section 9D of the Act and the law has been developed thereon. It is further submitted that the said statements are eschewed from consideration, there is no credible evidence on the basis whereof M/s.Kuber, or any of other appellants in the present appeals, could be linked to the activities allegedly carried out at Sandeep Poultry Farm. It is further submitted that the statement .....

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e preceded re-examination. Once adjudication and criminal proceedings have been parallelized by J.k.Cigarettes in that event in the absence of examination-in-chief, there can be no question of cross examination would apply which is what the words "when the person who made the statement is examined as a witness in the case before the court". He also referred to the decision in the case of Shardadamma v. Kenchamma, MANU/KA/8690/2006. He also relied upon the decision of Hon'ble Punjab .....

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cision stands affirmed by the Hon'ble Apex Court reported 2007 (216) ELT 659 (SC). He also relied upon the decision in Nazir Ahmed vs. King Emperor, AIR 1936 PC 253 and in the case of State of UP.vs. Singhara Singh, AIR 1964 SC 358. He further submitted that there is no admissible evidence on record to link the assessee to the activities at the premises of Sandeep Poultry Farm. Therefore, he prayed the impugned order is to be set aside. 5. With regard to the appeal filed by the Revenue, he r .....

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elves come forward and made voluntary deposition, therefore, the appellant cannot run away from their liability in view of the decision of the apex court in the case of Kalvert Foods India Pvt.Ltd.-2011 (270) ELT 643 (SC). He also relied upon the decision in the case of Vinod Solank-2009 (233) ELT 157 (SC), He further submitted that the learned counsel has heavily relied upon in the case of J.K.Cigarettes. In that case, Hon'ble High Court as opined that the provisions of section 9D (2) are n .....

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re installed at Sandeep Poultry Farm Khasra No.63/3, Village Khera Khurd, New Delhi-110082 found wherein 'Kanchan/Kanchann' brand gutka and 'wiz' brand pan masala manufactured clandestinely without declaring the said premises as registered premises for manufacture of the said gutka. The contention of M/s.Kuber is that they were not involved in the activity of manufacture of gutkhas and the said activity was illicit and misused of their brand name and goodwill of the appellant by .....

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tements under certain circumstances - (1)A statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, - (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose .....

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ings under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court," 8. The main contention of the appellant is that the deponents whose statements have been relied upon by the adjudicating authority were not put to examination-in-chief before providing an opportunity of cross examination. A plain reading of sub-section (1) of section 9D makes it clear that clauses (a) and (b) of the said sub-section set out the circumstances in which a sta .....

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ection (1) of section 9D set out the circumstances in which a statement, made and signed by a person before the Central Excise Officer shall be relevant, for the purpose of proving the truth of the facts contained therein. If the circumstances are absent, therefore, the statement, which has been made during the course of inquiry/investigation, before a gazette Central Excise Officer, cannot be treated as relevant for the purpose of proving the facts contained therein as observed by Hon'ble D .....

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-examination. Thus, this provision makes such statements relevant for the purposes of proving the truth of the facts which it contains, in any prosecution for an offence under the Act in certain situations. Sub-section (2) extends the provision of sub-section (1) to any proceedings under the Act other than a proceeding before the Court. In this manner, Section 9D can be utilized in adjudication proceedings before the Collector as well. In the present case, provisions of Section 9-D of the Act we .....

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the statement, in so far as proving the truth of the contents thereof is concerned, therefore, completely lost, unless and until the case falls within the parameters of section 9D(1). Therefore, two steps are required to be followed by the adjudicating authority, under clause (b) of section 9D(1) (t) the person who made the statement has to first be examined as a witness in the case before the adjudicating authority, and (ii) the adjudicating authority has, thereafter, to form the opinion that, .....

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ied upon to issue the show cause notice, are liable to be examined at that stage. If the Revenue choose not to examine any witnesses in adjudication, their statements cannot be considered as evidence. However, if the Revenue choose to rely on the statements, then in that event, the persons whose statements are relied upon have to be made available for cross-examination for the evidence or statement to be considered. 10. We further find that in the case of Smt.Sharadamma (supra), hon'ble Karn .....

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misconceived as the question of cross examination arises only when a witness has tendered evidence in chief-examination. Under section 138 of the Indian Evidence Act, cross-examination follows chief-examination, but not without chief-examination. If there is no chief-examination, there is no cross examination. It is only witness who is examined in chief who can be cross-examined. Therefore, a prayer for cross-examination of the plaintiff even when the plaintiff has not been examined in chief is .....

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as per the ratio laid down in the above binding precedent. Request for cross-examination has been denied and the witnesses have not been examined despite specific reliance by the appellant on Section 138B without there being any objective formation of opinion based on any material on record to come to the conclusion that any specified circumstance mentioned in Section 138B(1)(a) exists. These circumstances mentioned in Section 138B(1)(a) are also contained in pan materia Section 9D(1)(a) and we .....

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of delay or expense, which the Officer considers unreasonable." These circumstances show that if witness cannot be examined for any of these five reasons, the statement previously recorded would be relevant. The adjudicating authority was therefore bound to follow the binding precedent and in absence of any specified circumstance to consider the statement relevant without examining the witnesses, erred in rejecting the request of the appellant to examine the witnesses and to offer them for .....

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minations. - Witnesses shall be first examined-in-chief then (if the adverse party so desires) cross-examined, then (if the party calling him so desires) re-examined. The examination and cross-examination must relate to relevant facts but the cross-examination need not be confined to the facts to which the witness testified on his examination-in-chief. Direction for re-examination. - The re-examination shall be directed to the explanation of matters referred to in cross-examination; and if new m .....

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d in evidence in the interest of justice. 12. We further find in the case of Bussa Overseas Properties Ltd., this Tribunal again observed as under:- 24. The fact that in cases relating to smuggling or indeed any case civil or criminal cannot or need not been proved for degree of mathematical precision or that the department governed by strict rules of evidence is again no answer, The department is certainly bound by the contents of the Customs Act, 1962 and the general principles of evidence. wh .....

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ust relate to relevant facts but the cross-examination need not be confined to the facts to which the witness testified on his examination-in-chief. Direction for re-examination. - The re-examination shall be directed to the explanation of matters referred to in cross-examination; and if new matter is, by permission of the Court, introduced in re-examination, the adverse party may further cross-examine upon that matter." 9. It would, thus be seen that Section 138 (supra) envisages that a wi .....

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