2019 (5) TMI 1789 - AT - Central Excise

Clandestine manufacture and removal - cross-examination of witnesses - Section 9D (1) of Central Excise Act 1944 - demand on the basis of mere assumptions and without there being any tangible evidence relating to excess consumption of raw material seizer of unaccounted goods sale of goods to identified customers or cash related to clandestine removal - HELD THAT - It is not established beyond doubt that the said 62 loose papers were recovered from the possession and control of the appellant in view of the deposition during cross examination. It emerged through cross examination that said papers were brought from outside at around 02 00 PM. Further said 62 pages cannot be relied upon as evidence because as per record they were recovered from the possession of Shri Surendra Prasad and statement of Shri Surendra Prasad is not admissible evidence in terms of Section 9D (1) of Central Excise Act 1944 because Shri Surendra Prasad was not cross examined. The evidence which was relied upon for dropping of the demand of around Rs. 31, 99, 818/- was the evidence relied upon for confirmation of demand of Rs. 3.16 crores and thus there is contradiction in the impugned order - Appeal allowed - decided in favor of appellant.

Issues:
1. Recovery of incriminating documents.
2. Cross-examination of witnesses.
3. Reliance on statements and evidence.
4. Contradictions in the impugned order.

Analysis:
1. Recovery of incriminating documents:
The case involved a dispute regarding the recovery of 62 loose papers during a search operation at the appellant's premises. The appellant argued that the papers were not recovered from their premises but brought from outside, casting doubt on the authenticity of the recovery. The Tribunal noted discrepancies in the recovery process, as revealed during cross-examination, leading to the conclusion that the papers could not be considered as evidence. The lack of conclusive proof regarding the origin of the papers undermined the case against the appellant.

2. Cross-examination of witnesses:
The appellant raised concerns about the cross-examination process, highlighting instances where key witnesses were not adequately examined. The Tribunal observed discrepancies in the statements of witnesses like Shri Pratham Singh, Shri Gopal Prasad Chaurasia, and Shri Vishnubhai Jayantilal Thakkar, which raised doubts about the reliability of their testimonies. The failure to conduct thorough cross-examinations weakened the prosecution's case and contributed to the appellant's argument against the charges.

3. Reliance on statements and evidence:
The Tribunal scrutinized the reliance placed on statements and evidence by the Original Authority. It emphasized the importance of cross-examination in assessing the credibility of statements, citing legal precedents to support its position. The Tribunal found inconsistencies in the statements of key witnesses and highlighted the lack of substantial evidence linking the appellant to the alleged wrongdoing. The failure to adhere to legal standards in evaluating evidence led to the dismissal of the impugned order.

4. Contradictions in the impugned order:
An important aspect of the case was the presence of contradictions in the impugned order. The Tribunal pointed out discrepancies in the treatment of evidence related to different aspects of the case, leading to conflicting findings within the same order. This inconsistency undermined the overall validity of the decision and contributed to the Tribunal's decision to set aside the impugned order. The presence of contradictions highlighted the need for a more coherent and legally sound approach in reaching conclusions in such cases.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the impugned order due to the lack of conclusive evidence, shortcomings in the cross-examination process, and contradictions within the order. The detailed analysis of the issues highlighted the legal complexities involved in evaluating evidence and the importance of adhering to procedural fairness in reaching judicial decisions.

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