2011 (9) TMI 870 - AT - Central Excise

Duty demand - Penalty - Commissioner set aside demand and penalty - Remand order had not been implemented inasmuch as cross-examination was not given - Held that - submission of Shri C.N. Ramesh is crucial for the confirmation of the demand against the appellants and, therefore, he should have been allowed to be cross-examined - Be that as it may, the fact remains that the direction given in the remand order by the Tribunal was not implemented for whatever reason. The remand order of the Tribunal does not stand modified in any manner. Therefore, the Commissioner (Appeals) is correct in his finding that non-implementation for the remand order has resulted in violation of the principles of natural justice - Decided against Revenue.

Summary

Issues:
- Appeal against order setting aside demand, interest, and penalty
- Non-implementation of remand order for cross-examination
- Violation of principles of natural justice

Analysis:
The appeal before the Appellate Tribunal CESTAT Chennai involved the Revenue challenging the order of the Commissioner (Appeals) that set aside the demand, interest, and penalty confirmed against the assessees. The lower appellate authority had based its decision on the non-implementation of a remand order, Final Order No. 996/2009, which required the cross-examination of Shri C.N. Ramesh, Manager of M/s. Obliraja Textiles (P) Ltd. The Tribunal, in its final order, emphasized the crucial nature of Shri C.N. Ramesh's submission for confirming the demand and directed that he should be allowed to be cross-examined.

During the proceedings, it was highlighted that despite efforts to secure the presence of Shri C.N. Ramesh for cross-examination, his whereabouts were unknown, leading to the inability to conduct the cross-examination. The Deputy Commissioner of Central Excise, post remand, confirmed the demand and imposed the penalty, citing the lack of information on Shri C.N. Ramesh's location as a hindrance to the cross-examination process. The Commissioner (Appeals) subsequently set aside the order of adjudication, stating that the absence of cross-examination of Shri C.N. Ramesh amounted to a violation of natural justice principles.

The Tribunal affirmed the Commissioner's decision, noting that the non-implementation of the remand order for cross-examination resulted in a breach of natural justice principles. Despite the Revenue's argument that they were not heard before the Commissioner's decision, the Tribunal upheld the finding that the failure to implement the remand order constituted a violation of natural justice. Consequently, the appeal against the order setting aside the demand, interest, and penalty was rejected, and the impugned order was upheld by the Tribunal.