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2019 (10) TMI 1101 - AT - Central ExciseCENVAT Credit - fake invoices - Cenvatable invoices issued by a registered dealer without physical receipt of inputs - principles of natural justice - HELD THAT - It is settled position that violation of natural justice goes to the root of the matter and is incurable at the appellate stage. The entire case of the Revenue is based on the documents seized by them from the premises of M/s. SBI as well as the statements of Bhavik Sashikant Thakkar-proprietor of M/s. SBI and its accountant Naeem Shaikh. From the record of the case it is clear that no summons were issued to Bhavik Sashikant Thakkar and Naeem Shaikh in order to secure their presence in order to enable the appellant to cross-examine them. The correctness of their statements can only be tested if the same is processed through cross-examination by the appellant who are affected by it. It seems that none of the authority below has made any serious efforts to secure their presence. It is no doubt true that the non-affording of opportunity of cross-examination of Bhavik Sashikant Thakkar-proprietor of M/s. SBI and its accountant Naeem Shaikh has resulted in contravention of the principles of natural justice in the facts of the present case - the impugned order needs to be set aside and the matter is remanded to the adjudicating authority for denovo adjudication after affording of opportunity of cross-examination of Bhavik Sashikant Thakkar-proprietor of M/s. SBI and its accountant Naeem Shaikh to the Appellant. Appeal allowed by way of remand.
Issues: Violation of natural justice in denial of cross-examination opportunity leading to contravention of principles of natural justice.
Analysis: 1. The appeal was filed against an order passed by the Commissioner of Customs Central Excise & Service Tax, Nashik II. The case involved allegations of passing on inadmissible Cenvat credit by M/s. SB International to various manufacturers, including the appellant. The appellant, a manufacturer of excisable MS Ingots, procured MS scrap from various suppliers, including M/s. SBI. The department accused the appellant of availing inadmissible Cenvat credit based on invoices from M/s. SBI without physical receipt of duty paid goods. The appellant contended that their transactions with M/s. SBI were bona fide, and they were not in a position to verify the authenticity of the supplier's records. The appellant requested cross-examination of M/s. SBI's proprietor and accountant, but the authorities passed the order without granting this opportunity, solely relying on seized documents and statements. The appellant argued a violation of natural justice due to the lack of cross-examination. 2. The Tribunal emphasized that the violation of natural justice is fundamental and cannot be cured at the appellate stage. The entire case relied on documents seized from M/s. SBI and statements of its proprietor and accountant. However, no summons were issued to these individuals for cross-examination. The Tribunal cited a similar case where the failure to allow cross-examination led to setting aside the order due to a violation of natural justice. The Tribunal stressed the importance of establishing the relevance of statements through examination and cross-examination of witnesses. As the appellant was denied the opportunity to cross-examine key individuals, the impugned order was set aside, and the matter was remanded for denovo adjudication after affording the cross-examination opportunity. 3. The failure to provide the appellant with the chance to cross-examine M/s. SBI's proprietor and accountant constituted a breach of natural justice in the present case. The Tribunal concluded that the impugned order must be set aside, and the matter should be remanded to the adjudicating authority for a fresh adjudication after allowing the cross-examination of the relevant individuals. The Adjudicating Authority was directed to provide a reasonable opportunity for the appellant to present their case before issuing a new order. Consequently, the appeal was allowed by way of remand, ensuring the principles of natural justice were upheld in the proceedings.
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