2017 (6) TMI 853 - AT - Central Excise

Natural justice - denial of cross-examination - CENVAT credit - fake invoices - it was alleged that only on the basis of input invoices without receiving goods mentioned against those invoices in their factory premises - Held that - the adjudicating authority ought to have allowed cross-examination of these witnesses - it has been held in a series of cases including in the case of Andaman Timber Industries Vs. C.C.E., Kolkata II 2015 (10) TMI 442 - SUPREME COURT that the statement of the persons relied upon in confirming the demand be allowed to be cross-examined - appeals are allowed by way of remand to the adjudicating authority for deciding the issue afresh after allowing cross-examination witnesses - appeal allowed by way of remand.

Summary

Issues: Cross-examination of witnesses, denial of opportunity of hearing, validity of order based on available evidence, appeal against Order-in-Appeal

In this judgment by the Appellate Tribunal CESTAT Ahmedabad, the appellants, engaged in the manufacture of copper tubes, availed CENVAT credit on various inputs, including copper ingots. An investigation alleged that they wrongly availed credit without receiving goods mentioned in the invoices. The show cause notice demanded recovery of the inadmissible credit, interest, and penalty. The Commissioner (Appeals) confirmed the demand, leading to the present appeals. The appellant's consultant argued that relevant documents were not provided, and they were denied the opportunity for cross-examination. The Revenue argued that all necessary documents were handed over. The tribunal found that the authorities had denied cross-examination of witnesses without valid reasons, emphasizing the importance of allowing cross-examination as per legal precedents. The impugned order was set aside, and the appeals were allowed for remand to the adjudicating authority to decide afresh after permitting cross-examination of witnesses and providing a reasonable opportunity of hearing. The tribunal directed completion of the proceedings within four months and instructed the appellants to cooperate without seeking unnecessary adjournments. The appeals were disposed of accordingly.