TMI Blog2016 (10) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... oned in this report are not reflected in the statutory records of Appellant GSCL. Appellant also requested for the cross examination of Shri Pradip Chatterjee but the same has not been entertained by the Adjudicating authority. It is now a well accepted legal proposition that by virtue of Section 9D of the Central Excise Act, 1944 cross examination of the relied upon witness has to be extended when the same is sought for by the aggrieved party. If for any reasons the request cannot be entertained then the same has to be rejected and informed to the concerned party separately for redressal if he intends to appeal against such rejection. In the absence of cross examination of the concerned witness the evidentiary value of that statement is lost. Alleged shortage of finished goods as per a joint stock taking held on 07.09.2005 - Held that: - When on the date of stock taking itself appellant was reluctant to sign the stock taking made by the department and the authorized representatives then it cannot be said that GSCL has extended any concessions to the department in stock taking in whatever manner they want. Stock was required to be verified on actual weighment basis as per relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which other two Appellants have also filed Appeals. 2. Shri Biswajit Dutta (Advocate) appeared for Appellant GSCL and its Director whereas Shri B.N.Chattopadhyay (Consultant) appeared on behalf of the third Appellant. Shri Biswajit Dutta argued that a case of clandestine removal of excisable goods of Chapter 72 of the first schedule to Central Excise Tariff Act, 1985 has been decided against his clients demanding duty of ₹ 21,81,526/- along with interest and equivalent penalty has also been imposed. That the above demand is with respect to the following constituents:- (i) Demand of ₹ 9,86,411/- is calculated on the basis of one Daily Performance Report of HR Strips for the period 18.08.2005 to 31.08.2005 prepared by Shri Pradip Chatterjee who is the quality control in-charge of GSCL. (ii) Demand of ₹ 4,47,064/- pertains to duty on shortages of finished goods and waste and scrap calculated by the officers of Central Excise during joint stock-taking done on 07.09.2005. (iii) Demand of ₹ 7,11,407/- is for clandestine removal of 311.920 MT of HR Strips calculated on the basis of weighment slips recovered from the Headquarters of GSCL. 2.1 Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat demand of ₹ 7,11,407/- based on weighment slips is not sustainable as the same is entirely based upon the statements of Shri Ashim Kumar Pal (weighment clerk of M/s.Golden Weigh Bridge) and Shri Debdas Bhattacharjee (Office Assistant) of GSCL. That GSCL asked for cross-examination of Shri Pradip Chatterjee and Shri Sahaney as per Para-11 of the Order-in-Original dated 26.09.2006 which has been denied by the Adjudicating authority. 3. It was strongly argued by the learned Advocate of GSCL that demand of clandestine removal cannot be based on presumptions and there should be other supportive/positive evidences in the form of procurement of extra raw materials, excess power consumption, shortages/excesses in the raw material stock. That in the absence of any such positive evidences and due to denial of cross-examination of witnesses no case of clandestine removal is established against the Appellants. In addition to above case laws learned Advocate relied upon the case law of Durga Trading Company v. Commissioner of C.Ex., Lucknow [2002 (148) ELT 967 (Tri.-Del.)] which has been dismissed by Apex Court in an Appeal filed by Revenue. 4. Shri B.N.Chattopadhyay (Consultant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebdas Bhattacharjee and Shri Rakesh Sahney did not disclose the identity of Shri Kedhar Babu. Learned AR argued that as per Section 36A of the Central Excise Act, 1944 truth of the documents recovered from the office premises of the GSCL is an admissible evidence unless Appellant proves to the contrary. He relied upon the following case laws in support of his arguments:- (i) AC CEx, Rajamundry v. Duncan Agro Industries Ltd. [2000 (120) ELT 280 (SC)] (ii) Commr. of Central Excise v. International Cyilnders Pvt.Ltd. [2010 (255) ELT 68 (HP)] (iii) RHL Profiles Ltd. v. Commissioner of C.Ex., Kanpur [2016 (334) ELT 110(Tri.-Del.)] (iv) Umiya Chem Intermediate v. Commissioner of C.Ex. Cus. [2009 (239) ELT 429(Guj.)] (v) Somani Iron Steels Ltd. v. CESTAT [2011 (270) ELT 189(All.)] 6. Heard both sides and perused the case records. The issue involved in these appeals revolves around the activities of appellant GSCL whether they have indulged in clandestine manufacture and clearance of Iron and Steel finished goods falling under Chapter-75 of the Central Excise Tariff Act, 1985. The case against GSCL is based on the following three elements: i) A daily perf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Customs Act, 1962 was to be used against the accused. In the present case appellants have never confessed to the offence committed. No doubt Shri Rajnish Gambhir, Director of GSCL gave evasive/ambiguous version but never admitted to have indulged in clandestine manufacture and removal of finished goods. In such a factual matrix evidences like procurement of extra raw-materials, power consumption, any transit seizure of clandestine clearances etc. become relevant for corroboration. Alternately third party s statement, being used against the appellants was required to pass the test of cross-examination. The case of CCE vs. International Cylinders Pvt. Ltd. [2010(255) E.L.T. 68(H.P.)] relied upon by the department involved a seizure of 822 cylinders from the godown of International Cylinder Pvt. Ltd. and the concerned persons confessed to the clandestine activity. There were host of other statements indicating clandestine activity. There is no indication in this order of Himachal High Court that cross-examination was denied to the party. In the present proceedings investigation has only suggested to some clandestine activity but there is no positive evidence that any goods wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stock taking in whatever manner they want. Stock was required to be verified on actual weighment basis as per relied upon case laws and not on the basis adopted by the department while calculating shortages in stock of the appellant. Charge of the department regarding clandestine removal and demand on this ground is not sustainable and is required to be rejected. 6.3. Demand of duty of ₹ 7,11,407/- is based on quantities of clandestine removal calculated on the basis of certain weighment slips recovered from the Golden Weighbridge under the control of GSCL and the statements recorded during the investigation. It was strongly argued by the Learned AR appearing for the Revenue that certain details in the relied upon weighment slips were filled in by the employees of GSCL in the name of one Shri Kedhar Babu indicated one such weighment slips. That the payments received from Shri Kedhar Babu were admitted by Shri Debadas Bhattacharjee of GSCL. Learned Adjudicating Authority vide para-16(V) of Order-in-Original dated 26.09.2006 gave a finding that cross-examination is denied as the voluntary statements relied upon in the show cause notice were not the sole evidence in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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