TMI Blog2018 (3) TMI 2016X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Supreme Court in COMMISSIONER OF C. EX., MEERUT-I VERSUS RA CASTINGS PVT. LTD. [ 2010 (9) TMI 669 - ALLAHABAD HIGH COURT ], the said issue is required to be answered in favour of the assessee and against the department - it was held in the said case that we are of the view that the findings of the Tribunal are based on the material on record and they cannot be said to be without any material and perverse. We find that the Revenue has invoked the proviso to Section 11A(1)of the Act but no case has been made out in the show cause notices or in the adjudication order that there were any misstatement, suppression of fact or fraud on the part of the respondents. No substantial question of law arises from the order of the Tribunal . The other issue which has been raised by both the parties relying on the documents which have been recovered during search from M/s. Sharma Steel Rolling Mills Pvt. Ltd., the matter requires reconsideration by original authority as the addition was also based on the documents found during surprise visit made by the authorities to the factory premises of the assessee and was not solely based on electricity consumption. The matter is remi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of rawmaterial ? (3) D.B. Central/Excise Appeal No. 60/2015 (1) Whether it is necessary to give an opportunity of the cross examination to the assessee in absence of any such prayer made in this regard by him and also in view of settled law that the cross examination cannot be claimed by the parties as their legal right in the circumstances where the documentary evidence in itself is available ? (2) Whether the Tribunal is justified in interfering with the finding of facts of Order in Original while making observations contrary to the record regarding power consumption, clandestine removal and procurement of raw-material ? (4) D.B. Central/Excise Appeal No. 62/2015 (1) Whether it is necessary to give an opportunity of the cross examination to the assessee in absence of any such prayer made in this regard by him and also in view of settled law that the cross examination cannot be claimed by the parties as their legal right in the circumstances where the documentary evidence in itself is available ? (2) Whether the Tribunal is justified in interfering with the finding of facts of Order in Original while making observations contrary to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right in law in de-tagging the files of connected cases which were interlinked interwoven, interrelated, interconnected and the demand was founded upon each other s case, which has resulted into contradictory orders passed by different benches contrary to regular practice of CESTAT? 4. The facts of the case are that M/s. Shree Sharma Steel Rolling Mills Pvt Ltd., Plot No. A, B, C, Industrial Area, Jhotwara, Jaipur holding Central Excise registration No.AADCS4506PXM001 (hereinafter referred to as the unit to the assessee of M/s SSSRM also) for manufacture of TMT Bars and Rods (hereinafter referred to as the goods also) of various sizes falling under Chapter heading no.72.14 of the First Schedule to the Central Excise Tariff Act, 1985. 4.1 Acting upon an intelligence that M/s. Shree Sharma Steel Rolling Mills Pvt. Ltd. Industrial Area, Jhotwara, Jaipur were indulging in suppression of production and clandestine removal of the goods without reflecting in their books of accounts, without issue of any invoice or bill and without payment of any duty, the officers of the Headquarters Anti-Evasion Wing of Central Excise Commissionerate, Jaipur-I paid a surprise visit to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... man. 17. We make it clear that we have not decided any other point accept cross-examination nor disturbed any finding of any authority. 18. Issue is to be decided not solely on the basis of owner statement without thoroughly considering the corroborative piece of evidence which may be available, it will decide the case on the basis of law declared by different High Courts. 6. Counsel for the assessee Mr. Sameer Jain has relied upon the following decisions:- 6.1 In Commissioner Vs. R.A. Castings Pvt. Ltd.-2011 (269) ELT A 108 (SC), the Supreme Court held as under:- The Allahabad High Court in its impugned order had held that excess production of steel ingots, as proof of clandestine removal, could not be estimated based only on higher electrcity consumption. The Court held that even if income shown in balance sheet was not derived from sources declared by assessee, there has to be some record to link it with so called clandestine removal of goods. It had also held that as allegations relating to fictitious fimrs and income for share trading, were based on incriminating statements of share borkers etc. it was incumbent upon Revenue to produce them as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey then say: A formula which does not apply to Indian conditions because of wide diversity in case varieties, milling performance etc. cannot therefore be used to establish under weighment of juice only because our mixed juice % does not correspond to it. Moreover inferential method of calculation merely given rough idea of the value of date collected by other means and cannot be used to overrule actually found results. Apparently, their contention is that the particular ratio upon which a part of the calculations of the Assistant Chemical Examiner was based is founded on analysis of Java cane and is, therefore, no guide for determination of the ratio in respect of Indian cane. However, the point raised is a highly technical one and counsel on neither side was able to throw any light upon it. We would, therefore, not base any conclusion upon it but only observe that this argument was not considered by the Collector or by the Central Board of Revenue or the Central Government. In the circumstances, therefore we must hold that the finding that 11,606 maunds of sugar were not accounted for by the appellant has been arrived at without any tangible evidence and is ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght failure of the human element resulting from the fact that a special operation was being conducted by the operators in the presence of a Government official. We would, however, make it clear that these observations are just incidental and are not the basis of our decision. 6.3 In Commissioner of C. Ex. Meerut-I vs. R.A. Castings Pvt. Ltd. 2011 (269) ELT 337 (All.), it has been held as under:- 3. Being aggrieved by the impugned orders, the respondents filed appeals before the Customs, Excise Service Tax Appellate Tribunal, New Delhi. The Tribunal observed that it is settled principle of law that the electricity consumption can not be the only factor or basis for determining the duty liability, that too on imaginary basis, especially when Rules 173E mandatorily requires the Commissioner to prescribe/fix norm for electricity consumption first and notify the same to the manufacturers and thereafter ascertain the reasons for deviations, if any, taking also into account the consumption of various inputs, requirements of labour, material, power supply and the conditions for running the plant together with the attendant facts and circumstances. The Tribunal further observed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opositions are concerned, there can be no denying that when any statement is used against the assessee, an opportunity of cross-examining the persons who made those statements ought to be given to the assessee. This is clear from the observations contained in Swadeshi Polytex Ltd. (2000) 122 ELT 641 (SC) and Laxman Exports Ltd. : (2002) 143 ELT 21 (SC). Apart from this, the decision of this court in J and K Cigarettes Ltd. : (2010) 1 GSTR 482 (Del) clinches the issue in favour of the appellant. In that case, the validity of section 9D of the Central Excise Act, 1944 was in question. The said section 9D of the Central Excise Act, 1944 reads as under: 9D. Relevancy of statements under certain circumstances.--(1) A statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving in any prosecution for an offence under this Act, the truth of the facts which it contains,- (a) When the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld confront the assessee as well, during the proceedings, which shall give the assessee a chance to make his submissions in this behalf. It goes without saying that the authority would record reasons, based upon the said material, for forming the opinion. Only then, would it be possible for the affected party to challenge such a decision effectively. Therefore, the elements of giving opportunity and recording of reasons are inherent in the exercise of powers. The aggrieved party is not remediless. This order/opinion formed by the quasi-judicial authority is subject to judicial review by the appellate authority. The aggrieved party can always challenge that in a particular case invocation of such a provision was not warranted. 16. For this reason, we feel that the Tribunal should have a fresh look at these cases keeping in mind the provisions of section 138B as also the decision of this court in J and K Cigarettes Ltd. : (2010) 1 GSTR 482 (Del). The Tribunal will also consider the fact of non-supply of the report and other documents which were obtained by the concerned authorities from Sri Lanka after hearing had been concluded on October 14, 2004. Consequently, we set aside t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Accordingly, the appeal fails and is hereby dismissed. 6. He has also relied upon the decisions of Madras High Court in: 1. D.V.Kishore vs. Commr. Of Cus. (Seaports-Imports), Chennai, 2017 (350) E.L.T. 527 (Mad.), wherein it has been observed:- 26. It is also the findings on the part of the Tribunal to state that there was no effective and reliable denial on the part played by the appellant either in the proceedings before the Commissioner or before the Tribunal. 27. In fact, the appellant had started retracting his statement of confession itself from the beginning and when that being so, such a finding as has been given by the Tribunal, would not stand in the legal scrutiny. The further reasons given by the Tribunal is that, even though the only defence apparently was that the statements had been retracted, the seizure of gold and the consensual deposition by other witnesses implicating the appellant and therefore, the same cannot be ignored. 2. S.M.A. Siddique vs. Government of India, 1989 (42) E.L.T. (Mad.), wherein it has been observed:- 2. Mr. K. Ramaswami, learned Counsel for the petitioner, would primarily urge that the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. 687 (Guj.), wherein it has been observed:- 2. The facts of the case stated briefly are that the Respondent is engaged in the business of processing of cotton fabrics and man made fabrics falling under Chapter 52, 54 and 55 of the First Schedule to the Central Excise Tariff Act, 1985. The factory premises of the Respondent came to be searched on 9-7-2003. According to the Appellant, during the course of search, on physical verification of finished processed cotton fabrics and man made fabrics at the various stages of processing i.e., bleaching, dyeing, printing, finishing, packed in HDPE bags on comparison with recorded stock, a shortage of 175178 L. mtrs. of processed MMF valued at Rs. 31,53,204/- involving Central excise duty of Rs. 3,15,329/- was detected. Accordingly, a panchnama came to be drawn recording the said facts. Statement of a Director of the Company, Shri Rajnikant Omkarmal Agarwal also came to be recorded, under Section 14 of the Act, wherein apart from several other admissions, he admitted the contents of the panchnama. Statements of other employees of the Respondent were also recorded under Section 14 of the Act. Subsequently, a show cause notice came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, the conclusion arrived at by the Tribunal is based solely upon concurrent findings of fact recorded by all the authorities below. In absence of any perversity being pointed out in the findings recorded by the Tribunal, it is not possible to state that the conclusion arrived at by the Tribunal is, in any manner unreasonable so as to warrant interference. A case of clandestine removal of goods has to be made out on facts which find corroboration from the material on record. In absence of any corroborative material, no demand could have been raised merely on the basis of a statement recorded under Section 14 of the Act, which had been subsequently retracted. 4. Continental Cement Company vs. Union of India, 2014 (309) E.L.T. 411 (All.), wherein it has been observed:- 12. Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or labour had been utilized to manufacture the said quantity. Neither the fact of purchase of raw material from the vendors or the sale to the consumers was brought on record. In the absence of any corroborative evidence, the levy of such a huge demand was, thus, totally arbitrary and has been rightly set aside. 9. It is apparent that the demand was raised and a sum of ₹ 14 lacs was taken on the same day and in order to justify the said demand which had been encashed, a show cause notice was issued on 25.04.2006 thereafter. Thus, not onlythe demand was confirmed but even the penalty had been imposed, which was without any basis. The confirmation is not only on the manufacturer but also on the Proprietor. Such action which had illegally created the demand without even meeting the defence of the manufacturer, has, thus, been rightly set aside by the Commissioner (Appeals) and upheld by the Tribunal. The retraction was made at the earliest, the moment the show cause notice was served and in such circumstances, the questions of law which have been raised by the appellant are answered against the appellant-Revenue and the appeal is, accordingly, dismissed. 7.We hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined as per actual thickness of the product. 13. In that view of the matter and in the facts and circumstances of the case, we are of the opinion that no error has been committed by the authorities and no substantial question of law arises in the present case. 14. On the issue of penalty, we are of the opinion that the appellant has bonafidely imported products pursuant to the invoices which were received from the manufacturer. In that view of the matter, for penalty we are of the opinion that present case being the first instance for mis-declaration on part of the appellant, we absolve appellant in appeal no.1/2016 from penalty and personal penalty. In that view of the matter, in appeal 1/2016 penalty imposed on the appellant is waived. However, all other findings recorded by the authorities are upheld. 6.7 He has also taken us to the decision of this court in D.B. Central/Excise Appeal No.5/2014 (M/s. Patron Detective and Security Services vs. Commissioner of Central Excise Service Tax) decided on 11.10.2017 wherein it has been held as under:- 10. It is well settled principle of law that the person who is to take an action is required to supply basic doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in pursuance of the impugned show cause notices dated 15.01.1999 and 31.05.1999 without supplying the copies demanded by the petitioner in the letter dated 19.06.1999. 10. The only question therefore which remains to be answered is whether the petitioner can insist on supply of an authenticated copy of a document or an opportunity to inspect the document and if desired obtain a photo copy thereof would serve the ends of justice and meet the requirements of principles of natural justice. 12. The Single Bench decision of the Karnataka High Court in Reletronics Ltd. (supra) is not on the question as to whether inspection would be a proper substitute for supply of copies. However, it only observes that the requirement is to furnish copies of the materials relied upon in the show cause notice and not on the merits and other records which is referred. There is a difference between relying upon documents and referring to the same. As already seen in the facts of this case, it cannot be disputed that the documents were relied on in the show cause notice and they were not just referred to. In Roshanlal Agarwal's case (supra), a learned Single Judge of this Court only directe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al and Commissioner (Appeals) are set aside. 7. Taking into consideration the fact that the finding with regard to electricity consumption is contrary to decision of Supreme Court in R.A. Castings (supra), the said issue is required to be answered in favour of the assessee and against the department. 8. The other issue which has been raised by both the parties relying on the documents which have been recovered during search from M/s. Sharma Steel Rolling Mills Pvt. Ltd., the matter requires reconsideration by original authority as the addition was also based on the documents found during surprise visit made by the authorities to the factory premises of the assessee and was not solely based on electricity consumption. 9. As per the chart submitted by the revenue, the matter is remitted back to the original authority after setting aside the order of tribunal and order in original for consideration of the demand to the extent of following period only:- Assessee Period R.M. Brothers July 2005 to August 2005 Amar Pratap Steel May 2005 to August 2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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