2019 (2) TMI 1769 - AT - Central Excise

Principles of Natural Justice - CENVAT Credit - allegation that he appellant had availed ineligible CENVAT Credit without receipt of the materials from the supplier - cross examination of the persons on whose statement the SCN relied upon, is rejected - reliability on statements - Section 9D of Central Excise Act, 1944 - HELD THAT - The adjudicating authority has not granted any cross examination of the persons which was sought to by the appellant - the law is settled on the point of examination and cross examination of the persons on whose statement reliance is sought to be placed, that is it needs to undergo the rigours of the provisions of Section 9D of Central Excise Act, 1944. The matter remanded back to the adjudicating authority to reconsider the issue afresh, after following the ratio laid down by Hon ble High Court of Chattisgarh in the case of M/S HI TECH ABRASIVES LIMITED VERSUS THE COMMISSIONER, CENTRAL EXCISE AND CUSTOMS RAIPUR 2018 (11) TMI 1514 - CHHATTISGARH HIGH COURT as to the following the rigours of Section 9D of Central Excise Act, 1944. Appeal allowed by way of remand.

Summary

Issues:
Cross-examination rights of the appellant denied by adjudicating authority.

Analysis:
The judgment pertains to appeals against an Order-in-Original where the main appellant, engaged in garment manufacturing and export, availed CENVAT Credit. The issue arose when it was suspected that the appellant had availed ineligible credit without receiving materials. A show cause notice was issued, but the appellant's request for cross-examination of relevant persons was denied. The adjudicating authority confirmed the demands, imposed penalties, and denied the cross-examination request.

The appellant's counsel argued that the denial of cross-examination violated the principles of natural justice, citing precedents from the Hon'ble High Courts of Punjab & Haryana and Chattisgarh. The counsel requested a remittal to the adjudicating authority to ensure compliance with Section 9D of the Central Excise Act, 1944, and uphold the principles of natural justice.

After considering the submissions, the Tribunal found that the adjudicating authority erred in denying cross-examination, noting the settled law requiring adherence to Section 9D of the Central Excise Act, 1944. The Tribunal, without expressing any opinion on the case's merits, remanded the matter back to the adjudicating authority. The decision was based on the precedents set by the Hon'ble High Courts of Punjab & Haryana and Chattisgarh, emphasizing the importance of following the legal provisions regarding examination and cross-examination.

In conclusion, all appeals were disposed of by remanding the case to the adjudicating authority, directing them to reconsider the issue in light of the legal requirements outlined by the higher courts. The judgment highlighted the significance of upholding procedural fairness and legal standards in such matters.