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M/s. Shiv Shakti Earth Movers, Shri NK Gupta, Proprietor, Shri Vivek Gupta, Proprietor Versus CCE, Faridabad

2017 (10) TMI 431 - CESTAT CHANDIGARH

Principles of Natural Justice - Valuation - dummy units - the appellants specifically sought cross examination of the witnesses and argued that in terms of section 9D of the CEA, 1944, the statement of witnesses cannot be relied upon - Held that: - the adjudication order has been passed in violation of procedure laid down in section 9D of the Central Excise Act, 1944. Therefore, the matter needs examination in terms of procedures laid down in Section 9D of the Act - appeal allowed by way of rema .....

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pellants. 2. The brief facts of the case are that on 2.4.2008, the searches were made at the premises of M/s.Shiv Shakti Earth Movers (SSE) and M/s.Robot Industries (RI) at 14/3, Matura Road, Faridabad. Thereafter, the panchnama was drawn, list of plant & machinery an documents were prepared. During investigation, various statements were also recorded. Even one Sh. Rupesh Verma, witness who gave statement against the appellant and on the basis of statement of Sh. A.P. Malik and other documen .....

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tice, duty has been demanded from both units whereas in the impugned order, one unit has been declared dummy by the adjudicating authority and whole of the duty has been demanded from M/s.SSE which is beyond the scope of show cause notice, therefore the demands are not sustainable as held by the Hon ble Supreme Court in the case of M/s. Balrampur Industries Ltd.-2007 (215) ELT 489 (SC). 4. He further submits that the appellant sought cross examination of panch witnesses as well as the witness wh .....

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, the adjudicating authority has relied upon the statement of Shri Santosh and his bank account and various deposits made but Shri Santosh has not been made the party to the show cause notice. In that circumstance, the cash receipt by Shri Santosh cannot be added to the clearance of the appellants. Moreover, it is also argued that deposits shown in the personal bank account of Shri N.K.Gupta and Shri Vivek Gupta, who are brothers have not been considered by the adjudicating authority. He also re .....

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enue can proceed with the case. 7. Heard the parties and considered the submissions. 8. On careful consideration of the submissions, we find that the appellants specifically sought cross examination of the witnesses and argued that in terms of section 9D of the Central Excise Act, 1944, the statement of witnesses cannot be relied upon in view of the decision of the Kuber Tobacco India Limited (supra) and the decision of Hon ble High Court of Punjab & Haryana in the case of Jindal Drugs Pvt.L .....

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e circumstances in which a statement, made and signed by a person before the Central Excise Officer of a gazetted rank, during the course of inquiry or proceeding under the Act, shall be relevant, for the purpose of proving the truth of the facts contained therein. Therefore, there is no doubt about the legal position that the procedure prescribed in sub-section (1) of Section 9D is required to be scrupulously followed, inasmuch as in adjudication proceedings as in criminal proceedings relating .....

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ein as observed by Hon ble Delhi High Court in the case of J.K. Cigarettes (supra) wherein Hon ble High Court has observed as under :- Bare reading of the above section manifests that under?12. certain circumstances, as stipulated therein, statement made and signed by those persons before any Central Excise Officer of a gazetted rank during the course of inquiry or proceedings under this Act can be treated as relevant and taken into consideration if under the given circumstances such a person ca .....

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Section 9-D of the Act were invoked by the Collector holding that it was not possible to procure the attendance of some of the witnesses without undue delay or expense. Whether such a finding was otherwise justified or not can be taken up in the appeal. 9. In other words, in the absence of the circumstances? specified in Section 9D(1), the truth of the facts contained in any statement, recorded before a gazetted Central Excise officer, has to be proved by evidence other than the statement itsel .....

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to form the opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. The same view has been taken by Hon ble Allahabad High Court in the case of Parmarth Iron Pvt. Ltd. (supra) wherein the High Court has observed as under :- We, therefore, have no hesitation in holding, that there is 16. no requirement in the Act or Rules, nor do the principles of natural justice and fair play require that the witnesses whose statemen .....

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Hon ble High Court of Punjab & Haryana in the case of Jindal Drugs Pvt.Ltd. (supra) wherein the Hon ble High Court has observed as under: 19. Clearly, therefore, the stage of relevance, in adjudication proceedings, of the statement, recorded before a Gazetted Central Excise Officer during inquiry or investigation, would arise only after the statement is admitted in evidence in accordance with the procedure prescribed in clause (b) of Section 9D(1). The rigour of this procedure is exempted o .....

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