2019 (4) TMI 1145 - AT - Central Excise

Clandestine Removal - cross-examination of witnesses denied - period 2004-05 to 2005-06 - HELD THAT - The Revenue, on the basis of investigation against the appellant M/s Cona Industries found that there was clearance of excisable goods manufactured by M/s Cona Industries without payment of appropriate Central Excise duty during the relevant period. In arriving at the said conclusion, the department relied upon the evidences, which includes the statements of various persons who associated in the removal of such goods. By assailing the allegation in reply to the show-cause notice, the appellant vehemently requested for cross-examination of the witnesses whose statements have been recorded in the SCN and relied upon for the issuance of the notice. However, the learned adjudicating authority did not accede to the said request and proceeded with the adjudication even though referred to and relied on such evidences in confirming the demand. We are of the view that such an approach is in gross-violation of principles of natural justice. Matter remanded to the original adjudicating authority to allow the cross-examination of the witnesses as requested by them - appeal allowed by way of remand.

Summary

Issues:
Appeal challenging Orders-in-Appeal, Allegation of clandestine removal, Cross-examination of witnesses, Violation of principles of natural justice.

Analysis:

1. Appeal challenging Orders-in-Appeal:
The appeals were filed by both the Revenue and three respective assesses challenging the impugned Orders-in-Appeal. The Advocate for the appellant argued that discrepancies were noticed during a factory visit, leading to the allegation of clearing manufactured goods without duty payment. The demand notices were issued proposing recovery of duty and confiscation of goods. The appellant contended that reliance on evidence without allowing cross-examination violated principles of natural justice.

2. Allegation of clandestine removal:
The Revenue confirmed the demand against the appellant based on investigation findings of clearance of excisable goods without duty payment. The department relied on statements of individuals associated with the removal of goods. The appellant requested cross-examination of witnesses, which was denied by the adjudicating authority. The Tribunal found this denial to be a violation of natural justice principles.

3. Cross-examination of witnesses:
The appellant vehemently requested cross-examination of witnesses whose statements were relied upon. The adjudicating authority did not allow this request, leading to a gross violation of natural justice principles. The Tribunal held that reliance on evidence without allowing cross-examination was against established legal precedents, including the judgment of the Supreme Court in Andaman Timber Industries case.

4. Violation of principles of natural justice:
The Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority to allow cross-examination of witnesses as requested by the appellant. The decision was based on the gross violation of principles of natural justice in not permitting cross-examination, as established in various legal cases and the Supreme Court judgment referenced.

5. Conclusion:
The Tribunal allowed the appeals by way of remand, emphasizing the importance of adhering to principles of natural justice, particularly the right to cross-examination in cases involving allegations of clandestine removal. The decision highlighted the significance of fair procedures and the need for thorough examination of evidence to ensure a just outcome in legal proceedings.