2016 (11) TMI 918 - AT - Central Excise

Request for cross examination - principles of natural justice - Held that - the cross-examination of Sh. Shanker was required for proper adjudication of the case, as no cross-examination of Sh. Shanker was given to the respondent, therefore, statement of Sh. Shanker does not have any evidential value. Hence, I do agree with the observations of the ld. Commissioner (Appeals) to the extent in this case. As the statement of Sh. Shanker is the only evidence against the respondent, and the same is not reliable evidence, in that circumstances, proceedings against the respondent do not survive. In that circumstances, I do agree with the observation made by the Commissioner (Appeals) therefore, I do not find any infirmity with the impugned order, the same is upheld - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal against confirmation of demand by the ld. Commissioner (Appeals).
2. Allegation of clandestine removal of excisable goods without payment of duty.
3. Admissibility of evidence based on statements of witnesses.
4. Cross-examination of key witnesses.
5. Sustainability of demand without cross-examination of crucial witnesses.

Analysis:
1. The Revenue appealed against the order confirming the demand against the respondent, who was engaged in manufacturing non-alloy steel ingots. The case revolved around a surveillance revealing clandestine activities by a buyer of the respondent, leading to a search at Dharam Kanda and subsequent allegations of excisable goods' removal without duty payment to the buyer. The ld. Commissioner (Appeals) set aside the order of confirmation, prompting the Revenue's appeal.

2. In a previous round of litigation, the Tribunal remanded the case for proper adjudication after the appellant was granted a hearing opportunity. However, the main witness crucial for cross-examination was not produced, leading to the confirmation of demand, interest, and penalty. The ld. Commissioner (Appeals) overturned this decision, emphasizing the necessity of producing witnesses for cross-examination to sustain the demand.

3. The crux of the matter lay in the admissibility of evidence based on witness statements and documents recovered from Dharam Kanda. The Revenue argued that the witness's statement was sufficient evidence, while the respondent contended that the absence of witness cross-examination invalidated the case against them.

4. The ld. AR asserted that the witness's statement and certified documents were admissible, despite the lack of cross-examination of another key witness. On the contrary, the respondent's counsel argued that the case heavily relied on documents and witness statements, highlighting the absence of crucial witness cross-examination.

5. Ultimately, the Tribunal upheld the ld. Commissioner (Appeals)' decision, emphasizing the importance of witness cross-examination for a fair adjudication process. Since the main witness crucial to the case was not produced for cross-examination, the evidence lacked reliability, leading to the dismissal of the Revenue's appeal and the setting aside of the Order-in-Original due to the unsustainable demand against the respondent.