TMI Blog2018 (12) TMI 1532X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the Tribunal. Principles of natural justice - opportunity to cross-examine - Held that:- The necessity of strictly complying with the provisions of Section 9D of the Central Excise Act, 1944, including the requirement for grant of cross examination, has been consistently reiterated by higher appellate forums - the directions of the Tribunal in the earlier final order dt. 16.11.2009 has not been complied with and has only been followed in the breach. In consequence, appellants surely have been denied natural justice and opportunity to establish their credentials and case. The proceedings which have seen two rounds of litigation had commenced by way of issue of first SCN No.29/2008 dt. 10.4.2008. More than a decade has passed by, without any sign of resolution of the allegations raised by the department. The opportunity given for causing verification of the activity of the appellants was frittered away only due to quasi-judicial lethargy. The directions for granting cross examination was also not honoured - we find no purpose would serve by once again causing remand of the matter to the adjudicating authority. The impugned order cannot then sustain and will have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntry; that goods are sold at far higher price ranging from 70% to 120% in retail after repacking the goods. Statement of Shri G. Shankar Sr. Manager (Spare Parts) of appellants was recorded. The aforesaid investigations culminated in issue of SCN No.10.04.2008 interalia, proposing that activities undertaken by appellants should be considered as manufacturing activity, proposing demand of duty amount of ₹ 3,94,56,933/-, education cess of ₹ 7,89,139/- and HS Education cess of ₹ 1,72,017/- with interest thereon and also imposition of penalties under various provisions of law. Another SCN dt. 03.12.2008 was also issued similarly proposing duty demand of ₹ 1,13,28,277/- with interest and imposition of penalties. Both these notices were adjudicated by a common order No.13/2009 dt. 29.06.2009 inter alia, confirming a total demand of ₹ 5,17,46,366/- with interest thereon, imposition of equal penalty under Section 11AC of the Act and penalty of ₹ 1,00,00,000/- under Rule 25 of Central Excise Rules, 2002. Appellants preferred appeal before CESTAT Chennai, who, vide their Final Order No.1769/2009 dt.16.11.2009 remitted the matter to jurisdictional Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luntary admissions, are valid in law and cross examination of such statements would lead to bias. Further, the Adjudicating Authority has also failed to list out the exceptional circumstances under which cross examination has been denied. Further, the Ld. Adjudicating Authority has failed to consider the affidavit filed by P. Ganesan dated 25.06.2009. Thus, the impugned OIO which has sought to rely upon the statements without granting a right of cross examination and without seeking to establish any of the circumstances as laid down under section 9D of the Excise Act, is bad in law and liable to be set aside. iv) As the matter has already been remanded once with specific directions to cross examine and verify, which were not undertaken, no purpose would be served by remanding the matter again. Accordingly, in light of the circumstances, the impugned order, being passed in violation of principles of natural justice, ought to be set aside. Reliance in this regard, is placed on the decision of the Hon ble Tribunal at Madras in the case of Kiran Overseas v. Collector of Customs, 1988 (38) ELT 362 (Tribunal). v) In the present factual scenario, none of the activities allegedly car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner in paras 10 11 of the impugned order. 3.3 Nonetheless, although the Tribunal had remanded the matter back vide their Final Order dt. 16.11.2009, the adjudication order was passed almost after an year on 29.10.2010 only. Even so, vide letter dt. 13.04.2010 appellants had informed the department of their shifting of their premises from Hosur to Bangalore which was acknowledged by the department letter dt. 22.04.2010. In the circumstances, almost more than four months were available for the adjudicating authority to have caused verification of the activities of the appellants with respect to packaging and labeling, however, no such verification was caused to be done by the authority. Personal hearing in the matter was also accorded only on 29.10.2010. Due to this delay, the adjudicating authority has stated, in para-10 of the impugned order that there is no feasibility of conducting such a study as the appellants have closed down their manufacturing, packing / lebeling activity and had shifted to Karnataka State. The non-conduct of the verification as directed by the Tribunal would have the effect of vitiating the de novo proceedings. 3.4 The adjudicating authority h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2 In this regard, we find that the Ld. Advocate is correct in his contention that though the matter had been remanded by the Tribunal on 16.11.2009 and intimation of shifting of manufacturing was made by the appellant only on 13.04.2010 and acknowledged by department on 22.04.2010, the verification of the activity carried out by appellants had not been caused during the period of more than four months that had lapsed after the Tribunal order. Adjudicating authority has justified the non-conduct of such verification by the observing that due to shifting of the manufacturing there is no feasibility of conducting a study of the practice followed earlier. The incontrovertible conclusion that will become a natural corollary on such facts is that there was no justifiable reason for non-conduct of the verification process when the appellant s manufacturing premises were still in Hosur. Such laches will therefore not only preclude the Revenue from wriggling out of responsibility for conduct of the verification process, but at the same time put a question on the stand of the department that activity of appellant only amounted to manufacture‟, which issue per se had been remanded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s inter alia, on the grounds that finding of adjudicating authority was mainly based on the test report of expert who could not be made available for cross examination. The Tribunal also, without expressing any opinion on the merits of the case, on technical grounds, held that order impugned appealed which is against violative of principles of natural justice, cannot be sustained and since the matter had already been remanded once, it would not be just and proper to once again order remand. The appeal filed by department was dismissed by the Hon ble Supreme Court as reported in 1996 (88) A187 (SC). 6.5 In any case, the necessity of strictly complying with the provisions of Section 9D of the Central Excise Act, 1944, including the requirement for grant of cross examination, has been consistently reiterated by higher appellate forums, for example, the Hon ble Delhi High Court in the case of J K Cigarettes Ltd. Vs CCE - 2011 (22) STR 225 (Del.), wherein inter alia, held except for the circumstances stipulated under Section 9D of the Act, right of cross examination cannot be denied in any quasi-judicial proceedings. Closer home, this very Bench in the case of Venus Cotton and Othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances would be to proceed with the adjudication de-hors the report of the expert. But in the present case notwithstanding the fact that the CLRI did not respond to the summons of the Collector of Customs, i by sending any of its expert, the adjudicating authority has chosen to place reliance against the appellant, on the opinion of the expert body. Such a course apart from being violative of principles of natural justice, is not, permissible in law. Therefore, without expressing any opinion on the merits of the issue, on technical grounds, we held that the impugned order appealed against is violative of principles of natural justice and cannot be sustained. Since already the matter has been remanded once, we do not think would be just and proper to remand the matter once over in the context of the case. We are, therefore, constrained to set aside the impugned order in the above circumstances. We accordingly set aside the impugned order appealed against and allow the appeal. 7. In view of the discussions, findings and conclusions herein above, and also relying upon the ratio of the cases laws supra, we hold that the impugned order cannot then sustain and will have to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
