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2016 (10) TMI 736 - CESTAT NEW DELHI

2016 (10) TMI 736 - CESTAT NEW DELHI - TMI - Clandestine manufacture and removal of excisable goods - Sponge Iron - demand of duty with imposition of penalties - recovery of certain private records and statement of employees of the main appellant - denial of cross examination - Held that: - the appellants should have been offered an opportunity to cross examine the persons, who gave statements, which were relied upon by the Department. This is more relevant in the present case as the Director of .....

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ken selectively to allege excess clandestine production. We note that wherever the figures are to their advantage to support the allegation of Revenue those figures were selectively taken in respect of some of the selective days to arrive at a calculation. Certain parameters have been taken as per RG-I and Form-IV, which are statutory records. The percentage yield is taken from the private records. We find that there is no consistent approach in calculating the quantification of unaccounted prod .....

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X(DB), Excise Appeal No. E/3145/2010-EX(DB) - Final Order Nos. 53974-53977/2016 - Dated:- 5-10-2016 - Shri S.K. Mohanty, Member (Judicial) And Shri B. Ravichandran, Member (Technical) Shri A.K. Prasad, Advocate and Shri Kumar Vikram, Advocate for the appellants Shri Amresh Jain, AR for the respondent ORDER Per B. Ravichandran These four appeals along with one cross objection are taken up together as they are against the same impugned order dated 30.04.2010 of the Commissioner of Central Excise, .....

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ine manufacture and clearance of excisable goods by the main appellant during the period Feb., 2004 to December, 2012. On completion of the investigation, a show cause notice was issued in Jan. 2009 proposing demand of central excise duty and penalties on various persons. The Original Authority adjudicated the case by confirming a duty demand of ₹ 73,50,921/- and imposing penalties of equivalent amount on the main appellant and various penalties on the Directors and employees. He dropped a .....

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ot tenable as the ore used by the appellant is not high grade. (b) The private registers based on which the case was built up do not reflect the production figures correctly. These figures are only kept to monitor the performance of kiln and this has been clarified by the Director in his statement. Even for 371 days, the production for which is considered, on 151 days the production shown in the RG-I Register was higher than those mentioned in the private registers. This goes to show that the pr .....

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Excise Act, 1944 to be applied in such situation. When the Director of the company denied the authenticity of the private records maintained and gave explanation in this regard, the cross examination of the employees is relevant. Clandestine clearance of more than 5,000 MTs will involve a larger number of buyers. The department located only one buyer. Though inquiries were conducted, no statement or documents were cited or relied upon by the Department even in respect of this buyer. (d) The inqu .....

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ppellant was not considered or discussed by the Original Authority. 4. Ld. AR opposed the submissions of the ld. Counsel for the assessee/appellant. He submitted that the Department is aggrieved by that portion of the order dropping the demand as stated above. He submitted that as given in para 10 of the grounds of appeal, the calculation made on the basis of 63% recovery is applicable to second kiln too. The adjudicating authority erred in observing that production figures shown in the private .....

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the request for cross examination is only to delay the proceedings. On this issue, we find the records maintained by Shri B.S. Rathore is the main source of evidence in this case. The statement of three of the employees including B.S. Rathore has been relied upon by the Original Authority. It is a well settled position of law that when the statements are relied upon, the Adjudicating Authority has to follow the provisions of Section 9 D of Central Excise Act, 1944. The settled position of law h .....

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herein are fulfilled. For relying on the said statement as relevant for proving the truth of the contents thereof, he has to first admit the statement in evidence in accordance with Clause (b) of Section 9 D(1).The person, who gave statement should be examined first before admitting the same. The Hon ble Delhi High Court in Flevel International -2016 (332) ELT 416 (Delhi) held that Section 9 D of the Act restricts the ground on which the cross examination can be denied. The Hon ble High Court re .....

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ster maintained privately by one of the employees. As noted above, since the whole case rests on these private records and statements, it is necessary to get the truth of the matter after following the procedure laid down by the law. 8. Further, we also note that the chart submitted by the Revenue in para 10 of their appeal, shows that the private records and the RG-I and other statutory records were taken selectively to allege excess clandestine production. We note that wherever the figures are .....

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