2015 (10) TMI 1526 - AT - Customs

Clandestinely clearance of duty free inputs Demand of duty It was alleged that appellant sold imported chemicals of different types to merchants on cash basis without payment of duty of Central Excise and Customs Show cause notice was issued proposing demand of duty alongwith interest for clandestinely clearing duty free inputs without payment of duty By impugned order, demand of duty alongwith interest and penalty was confirmed Held that - entire case was made out on basis of statement of Director of Company and statements of other two processors Admittedly adjudicating authority has denied opportunity of cross-examination Court of considered opinion that appellant should be allowed cross-examination of two processors Actual consumption of imported raw material, should be considered by adjudicating authority Impugned order set aside Matter remanded to decide afresh Decided partly in favour of Appellant.

Summary

Issues:
1. Alleged clandestine clearance of duty-free inputs without payment of duty.
2. Reliability of statements made by the Director and other processors.
3. Denial of opportunity for cross-examination.
4. Consideration of actual consumption of imported raw materials.

Analysis:

Issue 1: The appellant, a 100% EOU, faced allegations of clandestinely clearing duty-free inputs without payment of duty based on statements made by the Director regarding the consumption of chemicals.

Issue 2: The main contention raised was the reliance on the Director's retracted statement and the lack of opportunity for cross-examination of the processors whose statements were crucial in the case. The appellant argued that the demand of duty was based on a formula that could not be sustained without proper evidence.

Issue 3: The Tribunal noted that the denial of cross-examination was a crucial aspect, citing a precedent where statements against the assessee were deemed inadmissible without the opportunity for cross-examination. The Tribunal emphasized the importance of allowing cross-examination, especially when the case heavily relied on statements from other processors.

Issue 4: The appellant presented a different consumption ratio of imported raw materials compared to the basis of the demand raised by the adjudicating authority. The Tribunal directed the adjudicating authority to consider the actual consumption figures provided by the appellant's advocate and to reevaluate the case in accordance with the law.

In conclusion, the Tribunal set aside the impugned order and remanded the matter to the adjudicating authority for a fresh decision. The authority was instructed to allow cross-examination of the processors, consider the formula presented by the appellant's advocate, and ensure proper opportunity for hearing before passing any new orders. The Tribunal clarified that the decision was made without expressing any opinion on the merits of the case, allowing both appeals by way of remand.