TMI Blog2017 (3) TMI 1211X X X X Extracts X X X X X X X X Extracts X X X X ..... f breach of natural justice - appeal allowed by way of remand. - Appeal No. E/1397-1398/2012-EX. (DB) - Final Order No. 51889-51890/2017 - Dated:- 20-2-2017 - Hon ble Mr. Justice (Dr.) Satish Chandra, President And Hon ble Mr. V. Padmanabhan, Member (Technical) Shri Prabhat Kumar, Advocate - for the appellant Shri Yogesh Agarwal, D.R. - for the respondent ORDER Per V. Padmanabhan These two appeals have been filed against the Order-in- Original dated 19.3.2012 passed by the Commissioner, Central Excise, Jaipur. 2. The appellant-assessee is engaged in the manufacture of abrasive stones falling under Sub-Heading No.6801.90 of the Central Excise Tariff Act, 1985. The officers of anti evasion branch of the Central Excise Commissionerate made a surprise visit to the factory premises on 7.3.2001 and conducted various checks. On physical verification of the stock of polished abrasive stones and raw materials, it was found that the stocks were tallying with the balance recorded in the statutory record. During checks, the officers recovered some private records of the assessee and 62 nos. of loose kucchi slips from the factory premises. The records recovered by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furt variety, 10% Triangle variety and 5% Chamfering variety. Neither Shri Manvendra Singh nor Mukesh nor Jitendra Hinger could give the complete details pertaining to the quality, number of pieces in one box and value per piece charged from the buyer. In this way, the departmental officers after investigations arrived at total quantity of 3455.5 boxes + 918 pcs. of polished abrasive stones (1557.5+1898 boxes and 632+286 pcs.) allegedly cleared clandestinely by considering that the clearance was entirely of Fickert A quality and the highest value of Fickert A quality was adopted. By adopting the value of ₹ 274 per piece, the total value of abrasive stones allegedly cleared clandestinely was worked out to ₹ 4,56,98,268/- and the Central Excise duty on such clearances amounting to ₹ 73,11,723/- was demanded from the assessee vide Show Cause Notice dated 16.5.2005. 6. The Commissioner, Central Excise, Jaipur decided the Show Cause Notice vide the order in original dated 28.10.2005 in which the demand was confirmed along with an order for payment of interest and penalty equal to the duty evaded. Further, penalties of ₹ 10 lakh and ₹ 2 lakhs was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ients of such clandestinely cleared goods. Without prejudice to the above arguments, they have raised further grounds: (a) The demand has been confirmed by arbitrarily adopting the highest value of the abrasive stones manufactured and cleared by the assessee. The adjudicating authority has not taken note the Chartered Accountant s certificate indicating the selling price of various type of goods cleared by the assessee for the last 11 financial years. They have also submitted a statement of purchase of empty corrugated boxes for the relevant years but these have not been considered by the adjudicating authority. (b) Explanation offered by Shri Jitendra Hinger, Marketing Executive with reference to the 62 pieces of loose slips recovered has not been considered by the adjudicating authority. Further, he has also not given credence to the submissions made by him that the boxes shown in the outward registers (Ann-B) were only empty corrugated boxes and empty plastic folders. (c) The show cause notice has been issued after a gap of 1529 days after the search in the factory on 7.3.2001 and since delayed it is hit by limitation. Finally, he submitted that the demand for excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of 60 and 50 boxes respectively were cleared to M/s Pacific Granites, Udaipur on 7.2.2001 and 22.2.2001. These were initially supplied with kuccha challan, but proper invoices were issued afterwards for these consignments, (iii) In respect of 47 entries found in the three dispatch registers, goods actually dispatched were empty corrugated boxes and plastic folders without any abrasive stones. However, he was unable to supply any documentary evidence to substantiate his statement as above. Accordingly, the adjudicating authority has brushed aside such statement as an afterthought. 12. During investigation, the departmental officers placed together the total number of boxes and a few pieces on the basis of Ann-A and Ann-B prepared from the kucchi slips as well as outward dispatch registers. In the statements recorded from Shri Mukesh Sahuas well as Shri Jitendra Hinger, the officers were unable to get clear details as to the number of pieces in each box. Further, no details were available from which the detailed distribution of various qualities of abrasive stones could be made between the various numbers of boxes in Ann-A and Ann-B. For conclusion of the investigations, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant has submitted a Chartered Accountant s certificate indicating the percentage of clearance of various types of abrasive stones. They have also submitted the average price prevalent in various time periods for the various types of abrasive stones. But we find that the adjudicating authority has not considered these submissions and in any case not discussed the same in the impugned order. He has also gone ahead and adopted the valuation of the entire abrasive stones as pertaining to one type and adopted the higher value of such abrasive stones. The appellants have also sought the cross-examination of Shri Mukesh Sahu as well as Shri Jitendra Hinger which was denied. To satisfy the principles of natural justice, we are of the view that the adjudicating authority should permit the cross-examination of these witnesses. 16. In the light of the above observations, we are of the view that the case needs to be remanded back to the original adjudicating authority for making good the observations in the above paragraphs. He is directed to consider the arguments advanced by the appellant during the course of the appeal and summarised in the above paragraphs and give detailed findi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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