1993 (4) TMI 155 - AT - Central Excise

Summary

Issues Involved:
1. Withdrawal of Miscellaneous Application No. 323/91-A.
2. Admission of additional evidence.
3. Allegations of suppression of value and sizes of goods.
4. Denial of principles of natural justice.
5. Applicability of res judicata.
6. Invocation of extended period of limitation.
7. Relationship between M/s. Regal Rubbers and M/s. Anand Rubbers.
8. Validity of the adjudicating authority's order.

Detailed Analysis:

1. Withdrawal of Miscellaneous Application No. 323/91-A:
The appellant, M/s. Regal Rubbers, initially sought to introduce additional grounds of appeal through Miscellaneous Application No. 323/91-A. However, during the hearing, the appellant's advocate, Shri A.K. Jain, requested to withdraw this application. The respondent's representative, Shri Prabhat Kumar, did not object. Consequently, the tribunal granted permission for the withdrawal, treating the application as dismissed for statistical purposes.

2. Admission of Additional Evidence:
The appellant filed Miscellaneous Application No. E/365/89-A to admit additional evidence, citing a fire incident on 22-10-1984 that destroyed relevant records. The advocate argued that the additional evidence was vital and did not introduce new grounds of appeal. The respondent opposed the admission, arguing the appellant had opportunities to present these documents earlier. The tribunal, referencing several judicial precedents, including decisions from the Supreme Court and High Courts, concluded that the additional evidence was crucial for a just decision. The tribunal admitted the additional evidence and noted the denial of principles of natural justice due to the non-grant of cross-examination of Central Excise officers.

3. Allegations of Suppression of Value and Sizes of Goods:
The case involved allegations that M/s. Regal Rubbers suppressed the real value of goods to evade Central Excise duty. The revenue contended that the cost of Black Coated Cotton Tape (BCCT) used in manufacturing should have been included in the value as per Section 4 of the Central Excises and Salt Act, 1944. The appellant argued that the BCCT cost was separately shown in invoices and thus should not be included in the value calculation.

4. Denial of Principles of Natural Justice:
The appellant argued that they were denied natural justice as their request for cross-examination of Central Excise officers was not granted. The tribunal cited several judgments, including Kaira Glue Factory v. Sales Tax Tribunal, emphasizing the importance of cross-examination and admitting additional evidence to ensure justice. The tribunal concluded that the denial of cross-examination amounted to a violation of natural justice principles.

5. Applicability of Res Judicata:
The appellant contended that the principles of res judicata applied since an earlier order by the Assistant Collector on similar issues existed. The tribunal considered this argument but noted that the current proceedings involved different facts and additional evidence, thus not strictly bound by res judicata.

6. Invocation of Extended Period of Limitation:
The appellant argued that the demand was barred by limitation and that the extended period should not be invoked as the department had prior knowledge of the facts. The tribunal noted that the extended period could be invoked in cases of suppression of facts, which was a matter for re-adjudication.

7. Relationship Between M/s. Regal Rubbers and M/s. Anand Rubbers:
The revenue alleged that M/s. Regal Rubbers and M/s. Anand Rubbers were related entities and that there was a mutuality of interest. The appellant argued that both firms were independent with no mutual interest or fund flow. The tribunal directed the adjudicating authority to verify these claims during re-adjudication.

8. Validity of the Adjudicating Authority's Order:
The tribunal found that the adjudicating authority's order was based on assumptions and lacked proper examination of evidence. The tribunal set aside the order and remanded the matter for re-adjudication, ensuring that both parties could present fresh evidence and that principles of natural justice were observed.

Conclusion:
The tribunal allowed the application for admission of additional evidence and remanded the matter to the adjudicating authority for re-adjudication. The adjudicating authority was directed to observe principles of natural justice, verify the genuineness of the additional evidence, and grant personal hearings. The appeal was allowed by way of remand, and the tribunal did not address other merits of the case in detail.