TaxTMI 
TaxTMI 
2022 (5) TMI 561
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....2017. Physical stock verification was conducted. It was observed that the appellant has clandestinely removed the TMT bars from their factory premises without payment of Central Excise duty. They did not assess the duty payable on clearance of excisable goods removed or found short during the physical verification and had also failed to maintain the statutory records properly as were required under Rule 6 of the Central Excise Rules 2002. Accordingly vide a show cause notice no. 692 dated 7.1.2016 duty of Rs.6,19,132/- including the duty of Rs. 2,25,187/- on alleged shortage plus duty of Rs.2,34,792/- based on the difference noticed due to weightment slips and duty of Rs.1,59,152/- on account of noticed short payment due to parallel invoices was proposed to be recovered from the appellant along with applicable interest and proportionate penalties. The said proposal was initially confirmed vide the order in original no. 3581 dated 25.2.2019. The appeal thereof has been rejected by the order under challenge. 3. I have heard Mr. Jitin Singhal, learned Counsel for the appellant and Mr. Mahesh Bharadwaj, Authorised Representative for the Respondent. 4. It is submitted on behalf of the....
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....hose documents to pertain to the appellant rather had acknowledged to pay the duty difference. It is impressed upon that the statement of the said Mr. Narendra Mishra is the clear cut admission for the alleged guilt which is otherwise apparent from the documents recovered. Hence, no error has been committed by the adjudicating authority while denying the cross examination for the said Mr. Narendra Mishra and other witnesses as were prayed to be cross examined by the appellant. However, the Department still has no objection if the matter may be remanded for the cross examination of few of the witnesses. 8. After hearing rival contentions, it is observed and held as follows: In light of the above discussion, the limited scope of present adjudication is as to whether the witnesses examined at the stage of investigation be allowed to be cross examination by the appellant. The relevant provision for the purpose is Section 9D of Central Excise Act. Foremost glance to the said section is important which is reproduced as follows: "Section 9D: Relevancy of statements under certain circumstances- (1) A statement made and signed by a person before any Central Excise Officer of a Gazette....
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....tatement, which has been made during inquiry/investigation, before a gazetted Central Excise Officer, cannot be treated as relevant for the purpose of proving the facts contained therein. 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 itself. The evidentiary value of the statement, insofar as proving the truth of the contents thereof is concerned, is, therefore, completely lost, unless and until the case falls within the parameters of Section 9D(1). 13. The consequence would be that, in the absence of the circumstances specified in Section 9D(1), if the adjudicating authority relies on the statement, recorded during investigation in Central Excise, as evidence of the truth of the facts contained in the said statement, it has to be held that the adjudicating authority has relied on irrelevant material. Such reliance would, therefore, be vitiated in law and on facts. 14. Once the ambit of Section 9D (1) is thus recognized and understood, one has to turn to the circumstances referred to in the sai....
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....tatutorily prescribed by plenary parliamentary legislation for admitting, into evidence, a statement recorded before the gazetted Central Excise officer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word "shall" in Section 9D (1), makes it clear that, the provisions contemplated in the sub-Section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. 19. The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the gazetted Central Excise officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudicating authority, as, in such an atmosphere, there would be no o....
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..... 24. Reliance may also usefully be placed on para 16 of the judgment of the Allahabad High Court in C.C.E. V Parmarth Iron Pvt Ltd, 2010 (250) ELT 514 (All), which, too, unequivocally expound the law thus: "If the Revenue choose not to examine any witnesses in adjudication, their statements cannot be considered as evidence." 25. That adjudicating authorities are bound by the general principles of evidence, stands affirmed in the judgement of the Supreme Court in C. V Bussa Overseas Properties Ltd, 2007(216) ELT 659 (SC), which upheld the decision of the Tribunal in Bussa Overseas Properties Ltd v C.C., 2001 (137) ELT 637 (T). 26. Hon'ble High Court of Chhattisgarh in Hi-Tech Abrasives Ltd. (Supra) has held as follows: "Statement recorded during Search/Seizure Section 9D of Central Excise Act, 1944. Scope of Proceedings are quasi criminal as they results in imposition of duty with penalty and lead to prosecution in some cases - Hence, Section 9D ibid has to be construed strictly, as mandatory and not merely directory - Without complying with requirement of Section 9D ibid, statement recorded during search and seizure operation by Investigation Officers is not relevant evidence....
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.... 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." 30. But in the present case, the witness has time and again reiterated that the appellant has never been involved in the alleged clandestine removal. He has tried to explain the shortage as was noticed at the time of physical verification of the stock. 31. He has specifically mentioned that production records are maintained by production units, hence, shall be available there. The separate invoice for captive consumed sponge iron and MS ingots has specifically been denied to be generated. Weighment slips were used to be made manually with no record thereof has been mentioned specifically to answer absence of weightment slips. 32. To test the veracity of these submissions in the light of simultaneous acknowledgement to deposit the differential duty demanded, I opine that interest of justice shall best be served when this witness is cross examined and his testimony is relied upon after following the procedure of aforementioned sec....