2015 (10) TMI 2204 - AT - Central Excise

Clandestine removal of sponge iron manufactured and cleared without payment of duty - Held that - It is the grievance of the appellant they had requested for cross examination of certain witnesses during the course of adjudication proceeding, but the same has been denied by the adjudicating without any valid reason. We find from the records that the cross-examination request of witnesses though had been advanced by the appellant before the adjudicating authority, but they have not substantiated the need for the cross examination of the respective witnesses whose examination would be necessary for the purpose of their defense. In any case, it cannot be denied that in the event the appellant could make out a case for cross examination , such an opportunity cannot be denied to them as it would amount to violation of principle of natural justice - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Waiver of pre-deposit of duty, penalty under Section 11AC of CEA, 1944, personal penalty under Rule 26 of Central Excise Rules, 2002, violation of principles of natural justice, denial of cross-examination, remand for fresh adjudication.

Analysis:
The applications sought waiver of pre-deposit of duty, penalty under Section 11AC of CEA, 1944, and personal penalty under Rule 26 of Central Excise Rules, 2002 amounting to Rs. 2.92 Crores, equal penalty, and Rs. 30.00 Lakhs respectively. The appellant claimed non-receipt of documents retrieved from the transporter's premises, hindering their defense. The Ld. Advocate highlighted severe losses incurred by the company and offered to deposit Rs. 10.00 Lakhs. On the contrary, the Ld. A.R. for the Revenue contended that sufficient opportunities were given for document inspection, and cross-examination was not an absolute right, suggesting a remand for fresh adjudication.

The issue revolved around the confirmation of demand for clandestine removal of sponge iron without duty payment from 2/01/2007 to 23/08/2008. The demand was based on documents from transporter premises and witness statements. The appellant argued for copies of these documents for rebuttal, alleging a violation of natural justice. The Revenue claimed most documents were shared, and inspection was allowed, disputing the non-supply claim. The denial of cross-examination was also contested by the appellant, citing a lack of valid reasons. The Tribunal found merit in the appellant's contentions and decided to remand the case for fresh adjudication, emphasizing adherence to natural justice principles.

The Tribunal concluded that a remand was necessary for the adjudicating authority to address the issues afresh, considering available and additional evidence. The authority was directed to allow cross-examination if justified by the appellant, ensuring reasons for denial if deemed unnecessary. Upholding natural justice principles, the Tribunal instructed the appellant to deposit Rs. 10.00 Lakhs within eight weeks for compliance. The decision allowed the appeal by remanding the case, keeping all issues open for further examination and resolution.