2012 (10) TMI 585 - AT - Central Excise

Cross objection - cross examination of the Director and Despatch Clerk was not allowed by the lower authorities and they have submitted that they wanted to prove by cross-examination that statements were recorded by coercion and threats and were not voluntary Held that - No retraction made by both the persons and no affidavit has been placed and, therefore, it cannot be said that denial of cross-examination was unfair in this case - When the department is able to make out a case for clandestine removal based on documents, there is no case for cross-examination of the Director and Despatch Clerk sought by the assessee and this is a clear case of clandestine removal, which they have failed to disprove.

Issues:
1. Failure of the appellant to appear for hearings and request adjournments.
2. Allegations of duty evasion based on recovered packing slips and statements from the Director and Despatch Clerk.
3. Grounds of appeal regarding denial of cross-examination and coercion during statements.
4. Reliance on packing slips for duty demands and absence of retraction or affidavits.
5. Dispute over the need for cross-examination in the case of clandestine removal.

Issue 1:
The appellant repeatedly failed to appear for hearings despite multiple scheduled dates and requests for adjournments. The Tribunal noted that as per Section 35C of the Central Excise Act, only three adjournments are allowed, and this was the fourth instance. The absence of representation from the appellant was duly recorded, leading to the proceedings moving forward in their absence.

Issue 2:
During a visit to the appellant's factory, packing slips were recovered indicating unaccounted goods procured from various parties for job-work, cleared without duty payment, and with fictitious lot numbers. The Director and Despatch Clerk admitted to these irregularities, with the Director unable to provide full details of the involved parties. Duty demands were calculated based on the recovered packing slips, and penalties were imposed after following principles of natural justice.

Issue 3:
The appellant contended that they were denied the opportunity to cross-examine the Director and Despatch Clerk to challenge the statements recorded, alleging coercion and threats. The Tribunal found no retraction or affidavits to support these claims, leading to a dismissal of the argument that the denial of cross-examination was unfair. Additionally, the failure to seek cross-examination of Panch-witnesses, coupled with the lack of dispute over the packing slip recovery, weakened the appellant's position.

Issue 4:
The appellant's main objection centered on the reliance on packing slips for duty demands, questioning the necessity of cross-examination when the documents supported the case for clandestine removal. The Tribunal emphasized the appellant's failure to disprove the allegations of clandestine removal, highlighting the lack of merit in the appeals filed. The absence of a solid defense against the duty demands based on the packing slips led to the rejection of the appeals.

Issue 5:
In a case where the department could establish clandestine removal through documentary evidence like packing slips, the need for cross-examination to challenge the statements of involved individuals was deemed unnecessary. The Tribunal concluded that the appellant's failure to counter the evidence presented by the department solidified the case of clandestine removal, resulting in the rejection of the appeals.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Ahmedabad highlights the key issues, arguments presented, and the Tribunal's findings in a comprehensive manner.

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