TMI Blog2021 (9) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... ity view is agreed upon that rejection of the request for cross examination of Thakkar would mean that Thakkar's statement cannot be relied upon. The Member (Judicial) has held without discussion that there is also no justification for imposition of penalty of ₹ 40 lakhs on Thakkar. The Member (Technical) has held that the penalty on Thakkar will also depend on the ultimate determination of penalty on respondent nos. 1 and 2. Penalty on Thakkar was not the subject matter of reference to the third member. Thus, question no.4 also in the affirmative. Questions are answered in the affirmative - Appeal dismissed. - CENTRAL EXCISE APPEAL NO. 104 OF 2008 - - - Dated:- 17-9-2021 - K.R. SHRIRAM, AND M. S. KARNIK, JJ. Mr. Swapnil Bangur a/w Mr. Siddharth Chandrashekhar i/b Mr. Siddharth Chandrashekhar for Appellant. Mr. Darius Shroff, Senior Advocate a/w Mr. Jas Sanghavi i/b PDS Legal, for Respondents No. 1 2 ORAL JUDGMENT (PER K.R.SHRIRAM, J.) : 1. This is an Appeal preferred by the Commissioner of Central Excise, Thane-II under the provisions of Section 35G of the Central Excise Act, 1944 impugning the order dated 22/09/2006 passed by the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal No. 261 of 2007. 4. The facts in brief are that respondent no.2 who was earlier called Indo Green Textiles Pvt. Ltd. was engaged in the processing of Man Made Fabrics classifiable under Sections 54 and 55 of the First Schedule of the Central Excise Tariff Act, 1985. Its factory premises was put to search on 21/05/2002 which resulted in seizure of documents/records/ computer floppies etc. Proceedings relating to physical stock inventory of grey fabrics resulted in shortages of processed fabrics totally valued at ₹ 74.63 lakhs (approximately). Another quantity of processed Man Made fabrics totally valued at ₹ 31.80 lakhs (approximately) were found to be excess than the recorded balance which was seized. Similarly search was conducted in the office premises of the appellant resulting in seizure of documents/ records. It is alleged that one of the directors of the Company, Shri Kamal Singhania, respondent no.1, accepted the shortages and excess and also deposited an amount of ₹ 10 lakhs towards duty. 5. Apart from searches conducted at factory and office premises of respondent no.2, searches were conducted at the office premises of respondent no.3 - M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the two Members who presided over the matter, the matter was referred to a third Member for her opinion on the following question :- Whether the demand of duty to ₹ 4,30,85,192/- is required to be set aside on the ground of insufficient evidence to establish the clandestine removal as held by the Ld. Member (Judicial) or the same is required to be confirmed in terms of the order of Member (Technical). Whether the confiscation of the goods found in appellants premises in excess of the recorded balance in RG1 register is required to be set aside as held by Member (Judicial) or confiscation is to be upheld in terms of the order of Member (Technical). Whether penalty is to be set aside on the Director of the firm Shri Kamal K. Singhania as held by Member (Judicial) or the same is required to be imposed as opined by Member (Technical) 9. The third Member after hearing the parties concurred with the view expressed by Member (Judicial) and held that duty of demand of ₹ 4,16,73,971/- can not be sustained. 10. In view of the majority view, the duty of ₹ 4,16,73,971/- came to be set aside. The duty of ₹ 11,94,219.20 was upheld because it was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound short in the factory during the stock verification involving duty of ₹ 11,94,219.20, which as recorded in the order of the Member (Judicial) was not contested on account of small amount. This fact of respondent no.1 depositing ₹ 10 lakhs towards duty cannot by any stretch of imagination justify that the account maintained by Thakker for 'S One Tex/Dying' belongs to respondent no.2. This is because it is only the statement of Thakkar which explains that 'S One Tex/Dying' is the code name of respondent no.2, and request to cross examine Thakkar was not granted by the adjudicating authority. 13. The Apex Court in Andaman Timber Industries Vs. Commissioner of C.EX., Kolkata-II 2015(324) E.L.T.641 (S.C.) held that not allowing a party to cross examine witnesses of the Adjudicating Authority whose statement was the basis of the show cause notice to demand duty is a serious flaw in as much as it amounted to violation of principles of natural justice. We have to note that the Commissioner refused permission to cross examine Thakkar notwithstanding the request made by respondent nos.1 and 2. In our view, permission to cross examine Thakker should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17-3-2005 [2005 (187) E.L.T. A33 (S.C.), was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 8. In view the above, we are of the opinion that if the te ..... X X X X Extracts X X X X X X X X Extracts X X X X
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