2006 (8) TMI 199 - HC - Central Excise

Summary

Issues:
1. Challenge to order requiring pre-deposit for hearing of appeals.
2. Allegation of clandestine removal of goods and imposition of duties and penalties.
3. Adequacy of opportunity for cross-examination during adjudication proceedings.
4. Consideration of evidence by the Tribunal and modification of payment terms.

Analysis:
1. The Petitioners challenged an order requiring them to make a pre-deposit for the hearing of their appeals following an allegation of clandestine removal of goods. The appeals were dismissed due to non-compliance with the order. The Petitioners sought to set aside the dismissal order along with the writ petitions.

2. The allegation against the Petitioners involved clandestine removal of 'Gutkha'. The departmental authorities investigated the matter, recorded statements, and issued a show cause notice. During adjudication, the Petitioners were allowed to cross-examine witnesses, but some individuals did not appear for cross-examination. The Petitioners contended that retractions from statements were not considered, leading to duties and penalties being imposed.

3. The Petitioners filed appeals before the CESTAT and sought waiver of the pre-deposit condition. The Tribunal dismissed the applications, directing the Petitioners to deposit a portion of the penalty and the entire duty demanded. The Petitioners argued inadequate opportunity for cross-examination and partial deposit of duty.

4. The High Court found that the CESTAT had ample evidence of clandestine removal. While the Petitioners had deposited a portion of the duty, concerns were raised about their financial practices. The Court modified the payment terms, directing a cash deposit and bank guarantee within six weeks. Personal penalties were subject to sureties. Compliance would lead to restoration and disposal of appeals by the Tribunal. The writ petition was disposed of accordingly.