TMI Blog2017 (2) TMI 1424X X X X Extracts X X X X X X X X Extracts X X X X ..... rson before any Central Excise Officer of a Gazetted Rank, relevant, for the purpose of proving anything in any prosecution for an offence, truth of facts which it contains but it does not declare such statement to be a conclusive evidence so as to base findings in regard to fiscal liability only on that statement. Making a document relevant for the purpose of proving truth of facts which it contains is one thing and holding such statement as conclusive evidence to prove a fact is another thing. Revenue in the case in hand has tried to use and rely aforesaid statements of third parties, without permitting cross-examination by assessee, as a conclusive evidence to prove facts stated therein. It means that Revenue want to utilize an ex parte version to pass an adverse order against a person without giving such person an opportunity to cross-examine the persons who have made such statements so as to have an opportunity to show that those statements are not true or there is some inaccuracy or otherwise irregularity etc. Such an attempt on the part of Revenue is not only illegal but also in the teeth of principles of natural justice and beyond the scope of Sections 14 and 9D of Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Subhash Agarwal, Sri Ram Bala Gupta, M/s. B.D. Agnihotri and Sons; and (vi) Premises of transporters namely M/s. Bhartiya Forwarding Agency, M/s. Thakur Transport Company, M/s. Pahalwan Transport Co., M/s. M.P. Roadlines and M/s. New Pooja Road Corporation. 7. During the course of search of factory premises, stock of finished goods, i.e., MS Bars, raw material, i.e., M.S. Ingots was checked. Shortage of 146.24 metric ton in the stock of MS Bars involving Central Excise duty of ₹ 3,09,535/- and 67 metric tonnes of MS Ingots involving Cenvat credit of ₹ 1,04,977/- was detected. No other incriminating document was found from factory premises of assessee or its office premises. 8. Statement of Sri Subhash Agarwal was recorded on 17-7-2003 under Section 14 of Act, 1944 wherein he stated that he used to arrange trading bills of the Firms registered with Sales Tax Department for sale of MS Bars manufactured by assessee on commission. For this purpose, he used to arrange a meeting of owners of Trading Firms with the owners/directors of assessee; that he was responsible for ensuring that goods cleared from assessee factory under trading bills o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee without payment of duty. He also stated that a total of 54 blank books of various Trading Firms recovered from his residential premises were being used for clandestine clearance of MS Bars and MS Ingots under the cover of Trader s invoices. 12. Statement of Sri Ajay Kumar Jain was also recorded on 13-4-2004 wherein he reiterated statements dated 15-7-2002 and 18-7-2003. 13. Revenue authorities from the documents recovered from residential premises of Sri Subhash Agarwal and Sri Ajay Kumar Jain and their statements, inferred, that assessee and M/s. Premier Ispat Ltd., Kanpur and other companies of their group were removing finished goods manufactured by them. Once goods reached consignees, these invoices were destroyed. In case any consignment is intercepted by Sales Tax and Excise authorities, Sri Subhash Agarwal immediately informed the concerned persons of assessee or Premier Ispat Ltd. and immediately an invoice was issued in the name of trader whose invoice was being used for transportation of clandestinely cleared goods. 14. Inquiry was also conducted with proprietors of five Transport Agencies whose premises were searched in course of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Assessee and Sri Ajay Kumar Jain both filed appeals before Commissioner (Appeals), who vide order dated 30-5-2008, confirmed duty demand of : (a) ₹ 3,09,535/- on shortage of 146.24 M.T. of MS Bars and Cenvat credit demand of ₹ 1,04,542/- on shortage of 67.36 M.T. of MS Ingots Cenvat credit availed MS Ingots; and, (b) Duty demand of ₹ 8,35,865/- on 462.27 M.T. of MS Bars held to have been cleared clandestinely and transported under 39 GRs (38 GRs of M/s. Pahalwan Transport Co. and one GR of M/s. New Pooja Transport) along with interest thereon under Section 11AB of Act, 1944. 19. Commissioner (Appeals) dropped duty demand of ₹ 10,97,160/- based on GRs of M/s Thakur Transport Co. and 27 GRs of M/s. Pahalwan Transport Co. and remanded duty demand based on GRs of M/s. MP Bihar Road Lines and M/s. New Bhartiya Forwarding Agency to ACCE for de novo adjudication. In the result, penalty on assessee under Section 11AC was reduced to ₹ 12,49,987/- and on Sri Ajay Kumar Jain it was reduced to ₹ 1,25,000/-. 20. Assessee and Sri Ajay Kumar Jain, both filed further appeal before Tribunal. Revenue, to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Reference No. 5 of 2011 (CCE, Meerut-II v. M/s. Vam Organic Chemical Ltd.), decided on 4-10-2016 [2016 (342) E.L.T. 174 (All.)], following a Division Bench judgment of Gujarat High Court in Commissioner of Central Excise v. Omkar Textile Mills Pvt. Ltd., 2010 (259) E.L.T. 687, held, that statement under Section 14 of Act, 1944, if shows a clear admission on the part of assessee or his representative or is corroborated by further credible evidence, is a relevant piece of evidence but if there is any retraction or explanation or other circumstances, the mere statement would not be sufficient and corroborative material would be necessary. 26. In M/s. Kellogg India Pvt. Ltd. v. Union of India, 2006 (193) E.L.T. 385 (Bom.), Division Bench considered the effect of non-permission of cross-examination of Deputy Chief Chemist, who analyzed a food sample. On the basis of test report submitted by Deputy Chief Chemist, Revenue formed opinion that subject product needed to be classified under a separate Chapter sub-heading and not under chapter or sub-heading relied upon by M/s. Kellogg. Consequently, a show cause notice was issued. When Revenue relied upon the said report, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the teeth of this material and which was placed by it before the department was in a position to defend itself effectively. It had in its possession several documents including from the suppliers abroad. It is in these circumstances and where several opportunities were given to the assessee/appellant to make submissions with regard to the findings of the report of the expert panel that refusal to permit cross-examination of some of the panel members was justified. (emphasis added) 31. These peculiar facts and circumstances of the case where denial of cross-examination was not found to vitiate proceedings the matter was decided in Patel Engineering Ltd. v. Union of India (supra). Moreover, we do not find that therein question in the context of Section 14 or Section 9D of Act, 1944 had arisen. Bombay High Court had no occasion to consider these provisions. Therefore, in our view, aforesaid judgment in Patel Engineering Ltd. v. Union of India (supra) would not help Revenue in any manner. 32. In the present case, it is not a case of admission on the part of assessee himself or his authorized representative but statements relied herein are that of propr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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