2022 (3) TMI 318 - AT - Central Excise

Clandestine manufacture and removal - Pan Masala - illegal pan masala pouch packing machine found in the premises - reliance placed on the statements recorded by the Central Excise Officers - relevancy of statements u/s 9D in the Central Excise Act, 1944 - HELD THAT - The truth of the facts contained in any statement, recorded before a Gazetted Central Excise Officer, has to be proved by evidence other than the statement itself. The evidentiary value of the statement, insofar as proving the truth of the contents thereof is concerned, is, therefore, completely lost, unless and until the case falls within the parameters of Section 9D. Both sides agreed that the procedure under section 9D has not been followed with respect to the statements. The Commissioner should be given an opportunity to follow the procedure under section 9D and come to the conclusion as to which of the statements relied upon in the show cause notice should be admitted in evidence and thereafter decided the matter. Needless to say that if any person is examined as a witness under section 9D and if any of the noticees wishes to cross-examine such a person an opportunity of cross-examination should also be provided. Matter remanded to the Original authority to follow the procedure under section 9D in respect of all the statements that have been relied upon and pass reasoned order after following principles of natural justice - appeal allowed by way of remand.

Summary

Issues:
Violation of Central Excise Duty, Admissibility of Statements under Section 9D, Compliance with Legal Procedures

Analysis:

Violation of Central Excise Duty:
The case involved the clandestine manufacturing and removal of Pan Masala without paying Central Excise Duty. The impugned order confirmed the demand of duty on two noticees and imposed penalties on them and other noticees. The reliance on statements recorded by Central Excise Officers was crucial in concluding the alleged violations.

Admissibility of Statements under Section 9D:
The impugned order heavily relied on statements recorded by Central Excise Officers without following the procedure mandated by Section 9D of the Central Excise Act, 1944. The statements lacked the necessary conditions specified in Section 9D for proving the truth of the facts contained therein. The legal significance and mandatory nature of complying with Section 9D were emphasized through judicial precedents.

Compliance with Legal Procedures:
The Tribunal observed that both parties agreed that the procedure under Section 9D had not been followed regarding the statements. The Tribunal directed the Commissioner to follow the Section 9D procedure, including admitting statements in evidence and providing the opportunity for cross-examination. The matter was remanded to the Original Authority for a reasoned order after ensuring compliance with principles of natural justice.

Conclusion:
The Tribunal allowed all appeals by remanding the matter to the Original Authority for proper adherence to the Section 9D procedure. The impugned order was set aside, emphasizing the importance of following legal procedures and upholding principles of natural justice in adjudication proceedings related to Central Excise Duty violations.