2021 (12) TMI 1231 - AT - Central Excise

Principles of natural justice - Clandestine removal - want of corroborative evidence - non-compliance of Section 9D of Central Excise Act - main contention of the appellant is the denial of opportunity of hearing and denial to cross examine Shri Brajesh Singh - HELD THAT - Pursuant to the directions of remand vide Final Order No. 57092/2017 dated 12.9.2017, the original adjudicating authority had given the opportunity to cross examine Shri Brajesh Singh. The notice was served to the parties on three different occasions. It was served on available address but were returned by the postal authorities as undelivered. The appellant himself at the time of personal hearing on December 13 had acknowledged that said Shri Brajesh Singh was untraceable. The said Brajesh Singh was the appellants ex-employee but got untraceable due to which the appellant were neither able to contact him nor were in position to provide his alternative address. The department also reflected its inability to trace said Brajesh Singh. It is under said circumstances that the Original Adjudicating Authority proceeded to decide the matter on merits, in compliance of the directions of remand. In the given circumstances, it was the duty of the appellant to make said Shri Brajesh Singh available or at least Shri Abhishek Nandwani and Shri H K Nandwani for their cross examination. But the appellant, apparently had not taken any such step. These circumstances, in my considered opinion, amounts to sufficient compliance of the aforesaid provision on the part of the authorities. The absence of the cross examination of the person from whom the incriminating documents were recorded and those whose statements were recorded cannot diminish the evidentiary value in the given circumstances, thus has to read against the appellant. Evidentiary value of the notebooks recovered at the time of search, these being prepared by Shri Brajesh Singh and Shri H K Nandwani therefore, cannot be denied. There is no apparent denial for the entries on those private note books to not to have been accounted in the books of accounts of the appellants nor any other such document is produced by the appellants which may prove that the entries of those Notebooks do not pertain to the appellant s day today business. There is no retraction of the statements by Shri Abhishek Nandwani and Shri H K Nandwani. The statements recorded rather have clear admission that entries in the note books as were seized are with respect to such transactions which were not regularly entered in books of accounts and for which the transactions generally were in cash. Appeal dismissed.

Summary

Issues:
1. Denial of opportunity of hearing and cross-examination of a crucial witness.
2. Alleged clandestine removal of goods without payment of duty.
3. Compliance with Section 9D of the Central Excise Act, 1944.
4. Admissibility of evidence and evidentiary value of recovered notebooks.
5. Justification of the Commissioner (Appeals) decision.

Issue 1: Denial of opportunity of hearing and cross-examination:
The appellant contended that the denial of cross-examination of Shri Brajesh Singh, a crucial witness, violated natural justice. The Tribunal noted that the original authority had provided multiple opportunities for cross-examination, but the witness was untraceable. The appellant failed to make efforts to locate the witness or provide an alternative address. The Commissioner (Appeals) found this conduct acceptable, ruling that the absence of cross-examination did not diminish the evidentiary value of incriminating documents. The Tribunal upheld this decision, emphasizing the appellant's responsibility to ensure the witness's availability.

Issue 2: Alleged clandestine removal of goods:
The Department asserted that sufficient evidence existed to prove clandestine removal, despite the appellant's denial. The appellant argued that the recovered notebooks did not belong to them and that the statements of the partners were inadmissible. However, the Tribunal found the evidence compelling, citing the notebooks prepared by key individuals involved. The Commissioner (Appeals) had correctly relied on this evidence, dismissing the appellant's defense that the notes were prepared at a competitor's behest. The Tribunal upheld the decision, highlighting the lack of contradictory evidence or retractions from the partners.

Issue 3: Compliance with Section 9D of the Central Excise Act:
The appellant claimed non-compliance with Section 9D due to the lack of cross-examination. However, the Tribunal determined that the authorities had made sufficient efforts to facilitate the process, and the appellant's inaction contributed to the witness's unavailability. The Tribunal ruled that the absence of cross-examination did not invalidate the evidence, as the incriminating documents and statements held evidentiary value in the case.

Issue 4: Admissibility of evidence and evidentiary value of recovered notebooks:
The appellant contested the admissibility of the recovered notebooks as evidence, alleging they did not pertain to their business transactions. However, the Tribunal found the evidence from the notebooks, prepared by key individuals, to be crucial in establishing clandestine activities. The lack of contradictory proof or retraction of statements further strengthened the evidentiary value of the notebooks, leading to the dismissal of the appellant's challenge.

Issue 5: Justification of the Commissioner (Appeals) decision:
The Tribunal reviewed the Commissioner (Appeals) decision and found it reasoned and supported by the available evidence. The appellant's arguments were deemed insufficient to counter the incriminating documents and statements provided. The Tribunal upheld the Commissioner (Appeals) decision, emphasizing the lack of merit in the appellant's defense and the adequacy of evidence presented to establish the alleged clandestine removal of goods.

This detailed analysis of the judgment addresses all the issues involved comprehensively, outlining the arguments presented by both parties and the Tribunal's reasoning behind the final decision.