2016 (2) TMI 325 - AT - Central Excise

Demanding duty along with interest and imposing penalty thereon - Held that - We have perused the impugned order in detail and in the impugned order, the adjudicating authority has not given any independent finding to arrive at the conclusion but merely copied the finding of the earlier adjudication order and hold that clearance of both units can be clubbed and duty can be demanded accordingly, which is not permissible in law as the adjudicating authority was not having any documents to rely or examine the other documents. We further find that in this case, the matter was remanded back to the adjudicating authority for de novo adjudication on 23.6.92 and till December, 2008, the adjudication order could not be passed. Such a delay of the adjudicating authority in passing / complying with the direction of / not following the direction of this Tribunal of 1992 lends the appellant to succeed in default itself. In these circumstances, as revenue has failed to comply with the direction of this Tribunal dated 23.6.92, the impugned order is not sustainable in the eyes of law, therefore, same is set aside and appeal is allowed with consequential relief - Decided in favour of assessee

Summary

Issues:
1. Compliance with tribunal directions regarding cross-examination and providing copies of statements.
2. Consideration of relied upon documents and lost original documents.
3. Determination of separate legal entities.
4. Cross-examination of witnesses and principles of natural justice.

Analysis:

1. The appellant challenged an order demanding duty, interest, and penalty. The Tribunal previously remanded the matter due to violations of natural justice principles, such as lack of cross-examination and non-consideration of the defense. The Supreme Court's stance on the right to cross-examine witnesses was highlighted, emphasizing the need for a fair opportunity for affected parties. The Tribunal set aside the impugned order and directed fresh adjudication, stressing the importance of providing statements for cross-examination.

2. The case involved two entities, M/s The Empire Safe Co. and M/s. Empire Safe Co., owned by different individuals. The issue of clubbing clearances for duty demand arose. The adjudicating authority faced challenges due to lost documents and non-compliance with tribunal directions. The impugned order lacked independent findings and merely replicated earlier decisions without proper examination of documents. The delay in adjudication and failure to comply with tribunal directions rendered the order unsustainable.

3. The Tribunal scrutinized the compliance with tribunal directions regarding the provision of statements and cross-examination opportunities. The Revenue's admission of non-compliance in a 2007 application indicated the failure to meet the tribunal's directives. The impugned order's reliance on earlier decisions without proper examination of documents was deemed impermissible. The delay in passing the adjudication order and non-compliance with tribunal directions led to the setting aside of the impugned order.

4. The adjudicating authority framed key issues, including the availability of relied upon documents, the legal status of the entities, and the necessity of cross-examination. The appellant's contention of non-compliance with tribunal directions was supported by the Revenue's admission of the same. The impugned order's lack of independent findings and reliance on earlier decisions without proper examination of documents led to its setting aside. The delay in adjudication and failure to follow tribunal directions highlighted the insufficiency of the impugned order.