2018 (3) TMI 1328 - AT - Central Excise

Clandestine removal - principles of natural justice - copies of the un-relied upon documents were not given - Held that - It appears that the Kacchi Parchies show the purchase of raw material both by the assessee-Appellants as well as by some other unit. The details of purchase of the raw material were available on Kacchi Parchies. Further mention of the word SCRAP‟ on the Kacchi Parchies shows that it was for the manufacture of the aluminium wire as well. The allegation of the assessee-Appellants that non-relied upon documents were not supplied, it appears that initially they have requested for the same, but, later, during the course of personal hearing dated 18.07.2014, they have not pressed for the same - there was no justification for grant of the cross-examination, as rightly observed by the lower authorities. Further, no request for cross-examination of any person was made during the personal hearing held a number of times. Even on the concluding date i.e 18.07.2014, the assessee-Appellants did not press for cross-examination of any person. This is merely an afterthought to buy time for delaying the proceedings. The assessee-Appellants have used the Kacchi Parchies for purchase of the unaccounted raw material and sale of the finished goods. When it is so, then there are no reason to interfere with the impugned order and the same is hereby upheld - appeal dismissed - decided against assessee-appellant.

Summary

Issues: Violation of principle of natural justice, Cross-examination opportunity, Investigation regarding purchase of raw material and onward transportation, Existence of manufacturing setup, Use of Kacchi Parchies for transactions

Violation of principle of natural justice:
The appeal was filed against an order-in-original by the Commissioner of Central Excise, New Delhi for the period 2008-09 to 2010-11. The appellant raised a preliminary objection regarding a violation of the principle of natural justice, claiming that they were not provided with copies of all seized documents, leading to a lack of cross-examination opportunity. However, the lower authority confirmed that the relied upon documents were indeed provided to the appellant. The objection was rejected as cross-examination opportunity was provided, ensuring compliance with natural justice principles.

Cross-examination opportunity:
The appellant contended that the cross-examination opportunity was not adequately provided. The lower authority observed that there was no legal basis for the plea that only the opinion of a government agency could be relied upon. The show cause notice disclosed the documents sent to the hand-writing expert, and the request for cross-examination was deemed frivolous as no bias was alleged against the expert. The appellant's request for cross-examination was considered unnecessary, and it was concluded that the opportunity was provided, thus rejecting the objection.

Investigation regarding purchase of raw material and manufacturing setup:
The appellant argued that the Department failed to investigate the purchase of raw material, onward transportation, and existence of a manufacturing setup, leading to a demand based on presumptive calculations. The Department was accused of raising the demand without valid evidence of clandestine removal. The appellant claimed they did not possess the necessary resources for manufacturing the alleged quantities. However, the Department justified the order by stating that customers confirmed purchases without bills due to market competition, and raw material was supplied without bills. The Tribunal found that the appellant was engaged in manufacturing activities with machines and employees, and upheld the order based on evidence found during the search.

Use of Kacchi Parchies for transactions:
The appellant's use of Kacchi Parchies for transactions was a key point of contention. The documents showed details of raw material purchases and indications of manufacturing activities. The appellant initially requested non-relied upon documents but did not press for them during a personal hearing. The Department's investigation with another entity supported the use of Kacchi Parchies for unaccounted transactions. The Tribunal concluded that the appellant utilized these documents for unaccounted raw material purchases and sales, leading to the dismissal of the appeal and upholding of the impugned order.

In conclusion, the Tribunal dismissed the appeal, affirming the order against the appellant based on the evidence and findings presented during the proceedings.