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TMI Blog2021 (10) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... search carried out by them. The officers have also seized stock of finished goods lying in the factory under the belief that the clearance value during 2012-13 & 2013-14 has exceeded the limit of SSI Exemption notification and hence liable to confiscation. Thereafter, two different show cause notices were issued, one for seizure portion and other for demand of duty and proposing penalty on the appellant as well as on others. The Show Cause Notice has relied upon various documents recovered from various places during the investigation. The Adjudicating Authority i.e. Commissioner passed Order-In-Original confirming the demand with interest and penalty and also imposing redemption fine in lieu of confiscation of the goods. The Commissioner has also imposed personal penalty on the directors of the appellant and also on the others. The ground for confirmation of demand is that the appellant have clandestinely removed the goods which resulted into exceeding the threshold limit of SSI Exemption due to which the appellant is not eligible for SSI Exemption. The appellant M/s. Meera Pipes Pvt. Ltd along with others being aggrieved by the Order-In-Original filed the present appeals before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore officer obeying the summon issued to him for his statement, the statement also shows the same and while recording the statement he denied to admit the Diary No. A/2 & A/3 of panchnama and its contents as it was not owned or written by him. Thus, his denial of said diary cannot be said non-cooperation but the officers alleged the same as he has not admitted. He submits that there is no admission by any person of the appellant company about the details of Diary A/2 & A/3 therefore, the same cannot be admitted acceptable as evidence against the appellant. 2.2. He further submits that similarly the document shown as recovered on 27.09.12 from the transporter Jay Bhavani Freight Carriers, Mumbai & Ahmedabad much prior to investigation started against the appellant without ownership or admission by the appellant company not admissible as evidence against the appellant. All records of transporter referred/relied upon in the notice and by the Commissioner are of the transporter only and not of the appellant and therefore, it is not admissible as evidence without any admission by the appellant. He submits that when the Commissioner alleged the clearance without payment of duty through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard the documents of Shri Ram Weigh Bridge which were heavily relied upon to establish the illicit procurement of raw material, he submits that the documents of Shri Ram Weigh Bridge are not admitted anywhere by the appellant. Even the comparative chart prepared by the Investigating Officer regarding entries of two diaries and weigh bridge slips also not admitted or confirmed by the appellant. He submits that the investigation at Shri Ram Weigh Bridge is also under serious doubt as for the reason that though the officers visited on 27.11.13 when no document was found subsequently, again on 29.11.2013 during the visit to Shri Ram Weigh Bridge they gathered/created evidences as per their requirement against the appellant. He further submits that the documents and statements procured from Shri Ram Weigh Bridge are not admissible as evidence against the appellant particularly in absence of cross-examination of the person of Shri Ram Weigh Bridge and in absence of any admission about its contents by the appellant. 2.4 He submits that the Commissioner has also erred in relying the documents and statements of raw material suppliers. The language of statements of most of the suppliers i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much prior to the search made at the place of the premises of the appellant M/s.Meera Pipes P Ltd. as in OIO it is stated that during the search on 27.09.2012 at M/s.JBFC, various documents regarding clearance by M/s. Meera Pipes P Ltd. were also recovered for the period from 22.10.2011 to 20.09.2012. Regarding the clearance of 987.84MT of SS pipes, he submits that nowhere any such documents in the name of M/s. Meera Pipes P Ltd. mentioned or any other supporting evidence of M/s. Meera Pipes P Ltd. found and just on the basis of statement of the persons of M/s. JBFC, the clandestine clearance was confirmed by the Commissioner. 2.7 He also submits that the Commissioner has denied the cross-examination of the persons of M/s.JBFC though the documents and statements are heavily relied upon by the Commissioner therefore, the Commissioner has grossly erred in relying upon the third party evidence by denying their cross-examination and without any admission by the appellant. 2.8 He further submits that normally in the case of clandestine removal, the transporter who indulge in transporting illicit goods are also penalized under Rule 26 of Central Excise Rules, whereas in the present pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2013 to 27.11.2013 M/s. Meera Pipes P Ltd. illicitly procured 874268.160Kgs of raw material and illicitly manufactured and clandestinely cleared 940518.224 Kgs of finished goods. It is not possible in the metal industries to produce more quantity of finished goods than the quantity of raw material and on this ground also observation of the Commissioner is totally incorrect and without going through the process of manufacture as there is always a processing loss in the metal industries. He submits that since clandestine removal is not established the confiscation of finished goods placed under seizure at the time of panchnama on 27.11.2013 and imposing redemption fine and penalty on the appellant is totally incorrect and illegal. He submits that since the appellant have not crossed the SSI exemption limit of Rs. 1.5 crore under SSI exemption notification No. 8/2003 the appellant was not required to obtain any Central Excise Registration under Central Excise Rules. Accordingly, the demand, interest, penalty and redemption fine are not sustainable. He prays to set aside the impugned order and allowed the appeal. In support of his above submission, he placed reliance on the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ESH VS. CCE, CALICUT * 2020 (372) ELT 321 (CHATTISGARH)- N R SPONGE P LTD VS. CCE, RAIPUR * 2019 (368) ELT A155 (SC)- ERODE ANNAI SPINNING MILLS P LTD VS. COMMISIONER * 2019 (366) ELT 647 (MAD)-CCE, SALEM VS. CESTAT, CHENNAI * 2018 (362) ELT 559 (MAD)-LAWN TEXTILE MILLS P LTD VS. CESTAT CHENNAI * 2015 (316) ELT 534 (GUJ) -KRISHNA SCREEN ART VS. CCE * 2015 (316) 417 (GUJ)- TULIP LAMKRAFT PVT LTD VS. CCE * 2010 (258) ELT 198 (GUJ)- R A SHAIKH PAPER MILLS PVT LTD VS. UNION OF INDIA * 2010 (256) ELT 20 ( GUJ )- BHAVIN IMPEX PVT LTD VS. UNIO OF INDIA * 2009 (239) ELT 429 (GUJ)- UMIYA CHEM INTERMEDIATE VS. CCE 04. We have carefully considered the submissions made by both the sides and perused the records. The department's case is that the appellant have clandestinely removed the goods consequently the value of SSI exemption limit has exceeded and appellant is not entitle for the SSI exemption therefore, there is a demand of duty, penalty, interest and redemption fine. The entire case was made out mainly on the basis of diaries which is marked as A/2 &A/3, said to have been recovered from the appellant's factory. The entries in the said diaries include the entries of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 9D, it is mandatory on the part of the Adjudicating Authority to cross examine the witness or admitting their statements as evidence. Some of the judgments and relevant orders are reproduced below:- * HI TECH ABRASIVES LTD. VS. COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, RAIPUR-2018 (362) E.L.T. 961 (CHHATTISGARH) 9.4 The legislative scheme, therefore, is to ensure that the statement of any person which has been recorded during search and seizure operations would become relevant only when such person is examined by the adjudicating authority followed by the opinion of the adjudicating authority then the statement should be admitted. The said provision in the statute book seems to have been made to serve the statutory purpose of ensuring that the assesseeare not subjected to demand, penalty interest on the basis of certain admissions recorded during investigation which may have been obtained under the police power of the Investigating authorities by coercion or undue influence. 9.5 Undoubtedly, the proceedings are quasi criminal in nature because it results in imposition of not only of duty but also of penalty and in many cases, it may also lead to prosecution. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Laws (SC) 2011 838) = 2011 (270) E.L.T. 643 (S.C.). That decision turned on its own facts. In para 19 of the judgment, it was concluded as below : "19. We are of the considered opinion that it is established from the record that the aforesaid statements were given by the concerned persons out of their own volition and there is no allegation of threat, force, coercion, duress or pressure being utilized by the officers to extract the statements which corroborated each other. Besides the Managing director of the Company of his own volition deposition the amount of Rs. 11 lakhs towards excise duty and therefore in the facts and circumstances of the present case, the aforesaid statement of the Counsel for the Respondents cannot be accepted. This fact clearly proves the conclusion that the statements of the concerned persons were of their volition and not outcome of any duress." Accordingly, on the first and second question of law, we hold that the statement of the Director could not be treated as relevant piece of evidence nor could be relied upon without compliance of Section 9D of the Act. The two questions of law accordingly, stand answered in that manner. 4.1 In the above jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and transporters were not cross examined. This judgment was affirmed by the hon'ble Gujarat High Court as reported in 2015 (322) ELT 283 (Guj. High Court). 4.5 In the case of CHHAJUSINGH S. KANWAL-2011 (272) E.L.T. 202 (GUJ.), since the demand was raised mainly on the statements of dealers and transporters who were not examined and the demand was set aside. Therefore, it is a trite law that any statement can be admissible evidence only when the person who has given any statement is cross examined by the Adjudicating Authority. 4.6 In the case of GUJARAT CYPROMET LTD. -2017 (345) E.L.T. 520 (GUJ), the hon'ble High Court has held that without giving the cross examination even though statements were not retracted, confirmation of demand and imposition of penalty without the opportunity of cross examination found to be violative of Natural Justice accordingly, the revenue's appeal was dismissed. In the present case particularly, when the director of the appellant company himself has out rightly denied the authorship, ownership and the contents of the diaries. The dealers and transporters should have been cross examined therefore, without cross examination their statements and record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Ashuram, Director of M/s. Meera Pipes P Ltd. is mentioned on the documents concluded that these are related to the appellants. This conclusion of the adjudicating authority is on the basis of confirmation made by employees of M/s. JBFC. As we stated above since the statements on these persons have not been examined their statements cannot be relied upon. Therefore, neither the appellant's/company's name nor the full name of the director is appearing, merely because word 'Assu' is appearing on the document cannot be concluded that this detail mentioned in the said document is related to the appellant. Sample transport document is scanned below:- From the above documents also it is clear that the appellant's name is not appearing anywhere in the said documents. This document was admitted as evidence by the Adjudicating Authority accepting the version given by the M/s. JBFC and on the basis of the same appearing in the diary A/1 & A/2. Since the director Shri Aashuram has categorically denied the diaries and the transporter was not cross examined, the version of the transporter cannot be admitted as evidence. Similarly, We have gone through various documents which were relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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