9911796707
TMI Blog2023 (10) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... el TMT bars', 'misrolls' and 'melting', valued at Rs. 36,27,92,630 with penal consequences over and above duty liability of Rs. 5,87,54,605 respectively. 2. According to Learned Counsel for the appellants, the order [[Order-in-Original No. 05-06/CEX/Comm./2012 dated 26th March 2012] of Commissioner of Central Excise, Customs & Service Tax, Aurangabad, disposing off the respective show cause notices, was in contravention of the principles of natural justice inasmuch as it was marked by hindrance to effective defence sought to be brought on record through cross-examination of several persons whose testimony, during investigations, had been relied upon in the notices and by denial of ascertainment of provenance of 'pen drive' in the light of disowning of its recovery in the limited cross-examination as was permitted. 3. He went on to disparage the foundation of the order impugned herein in the light of failure of notices of clandestine removal issued to M/s Matsyodhari Steel & Alloy Pvt Ltd and other purported suppliers of 'ingots' alleged to have been illicitly cleared to M/s Shiv Shakti Rolling Mills Pvt Ltd. He pointed out that, in response of 27th April 2011 itself styled as 'in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order was issued without the participation of the noticees. And the participation, such as it was, limited to cross-examination of some of those whose statements had been relied upon had already established that the voluntary nature thereof was suspect. Accordingly, these cannot be relied upon as held by the Hon'ble Supreme Court in re Andaman Timber Industries. In such circumstances and, more particularly, as the other statements were claimed to contain affirmation of informal records that became the foundation of the case against the noticees, failure to allow cross-examination without an iota of justification thereof precludes consideration of those untested facts in adjudicatory proceedings. 7. It is no secret that establishing 'clandestine removal' is easier said than done and much latitude, in the form of preponderance of probability and deducing from corroborative evidence affirming testimony in statements, is permissible in determining the outcome. However, the proceedings may not be allowed to draw upon that flexibility for discarding even the most fundamental canon of evidence. Reliance upon a statement, to the exclusion of any material facts, in a show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n been fixed on 23.11.2011. The co-noticees did not appear on any of the above dates for personal hearing nor did they seek any extension. This time Shri D.R.Gadekar and Shri Vijay Mittal appeared for hearing on belief of the assessees on 23.11.2011 and again requested to allow cross examination stating that several statements have been retracted and huge number of documents have been mentioned as having been seen by the deponents and they stated that they would re-examine the list of persons to be cross examined and they sought for fresh date for the same. Accordingly vide their letters both dated 25.11.2011 they submitted list of 14 witnesses who are common in both the SCNs and requested for allowing cross examination. The cross examination of these witnesses was allowed and fixed on 20.12.2011. The consultant of the assessees could complete cross examination of 8 witnesses on 20.12.2011. The cross examination of remaining 6 witnesses was fixed on 12.01.12, assessees sought extention vide letters dated11.01.2012. It was then refixed on 24.01.2012 and this time also they sought extention vide their letters dated 23.01.2012. The cross examination was again fixed on 27.02.2012. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of original record is concerned, it has already been discussed above that they had made such a request in past and they had been informed under this offic's letter dated 12.05.2011 that they may verify the originals at DGCEI, Mumbai and thereafter assessees have not made any such request and proceeded to request for allowing cross examination and now after completion of cross examination, based on the same records, they again came up with this request to get extention of time. About cross examination also it has been mentioned above that the assessees have sought time during persona! hearing on 23.11.2011 to reexamine the list of witnesses and thereafter they have filed letter for cross examining 14 witnesses and accordingly it was allowed and completed by them.These facts show that assessees are not serious in completing the adjudication proceedings.So far as their request for forensic analysis of pendrive is concerned, specific findings are given in ensuing paras. Apart from these, another opportunity was given to asseessees and personal hearing was refixed on 21.3.2012, which they failed to attend.' which, in our opinion, is not constructive compliance with requisite fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 occasion for any trepidation on the part of the witness concerned.' 10. The bare essentials for establishing occurrence of clandestine removal has been elaborated thus '40. After having very carefully considered the law laid down by this Tribunal in the matter of clandestine manufacture and clearance, and the submissions made before us, it is clear that the law is well-settled that, in cases of clandestine manufacture and clearances, certain fundamental criteria have to be established by Revenue which mainly are the following : (i) There should be tangible evidence of clandestine manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence by way of statements of purchasers, distributors or dealers, record of unaccounted raw material purchased or consumed and not merely the recording of confessional statements. A co-ordinate Bench of this Tribunal has, in another decision, reported in the E.L.T. issue of 5-8-2013 (after hearings in the present appeals were concluded), once again reiterated the same principles, after considering the entire case-law on the subject [Hindustan Machines v. CCE [2013 (294) E.L.T. 43]. Members of Bench having hearing initially differed, the matter was referred to a third Member, who held that clandestine manufacture and clearances were not established by the Revenue. We are not going into it in detail, since the learned Counsels on either side may not have had the opportunity of examining the decision in the light of the facts of the present case. Suffice it to say that the said decision has also tabulated the entire case-law, including most of the decisions cited before us now, considered them, and come to the above conclusion. In yet another decision of a co-ordinate Bench of the Tribunal [Pan Parag India v. CCE, 2013 (291) E.L.T. 81], it has been held that the theory of prepond ..... X X X X Extracts X X X X X X X X Extracts X X X X
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