1993 (9) TMI 219 - AT - Central Excise

Issues Involved:
1. Denial of Natural Justice
2. Introduction of Suspect Documents
3. Non-Consideration of Evidence
4. Admissibility of Statements
5. Jurisdiction of the Regional Bench
6. Compliance with Section 35E of CESA, 1944

Detailed Analysis:

1. Denial of Natural Justice:
The Department argued that the Collector allowed the introduction of certain suspect documents without giving the Department an opportunity to investigate or rebut them. The Department claimed that this was a violation of the principles of natural justice. The Tribunal found that the principles of natural justice imply 'fair play' in adjudication, and it is open for the Department to ensure representation during adjudication. The Tribunal emphasized that the Department's right to be represented in adjudication has been upheld in previous cases, including the Lakhanpal case.

2. Introduction of Suspect Documents:
The Department contended that certain invoices for the purchase of Titanium Dioxide, which were introduced at a belated stage, appeared suspect and were relied upon by the Collector without proper investigation. The Tribunal agreed that these documents were introduced without proper verification and investigation, and this warranted a remand for proper scrutiny.

3. Non-Consideration of Evidence:
The Department alleged that the Collector ignored numerous documents cited in the Show Cause Notice (S.C.N.) and only considered a few, indicating bias against the Department. The Tribunal found that the Collector's failure to consider all the evidence cited in the S.C.N. amounted to a non-speaking order, necessitating a remand for proper consideration of all the evidence.

4. Admissibility of Statements:
The Department argued that the Collector did not give any findings on the admissibility of the statements of 34 persons, though these statements remained without retraction. Instead, the Collector relied on certain affidavits without calling the deponents for examination. The Tribunal agreed that the statements should be considered, and cross-examination of the deponents should be allowed to ensure fair play.

5. Jurisdiction of the Regional Bench:
The Respondents contended that the Regional Bench lacked jurisdiction to dispose of the appeal on short grounds, as the appeal involved issues of valuation and classification, which should be considered by the Special Bench. The Tribunal overruled this objection, stating that the President had delegated certain functions to the Regional Benches, including cases where a remand was sought on the grounds of denial of natural justice or introduction of evidence not disclosed to the appellants.

6. Compliance with Section 35E of CESA, 1944:
The Respondents argued that the grounds now pleaded by the Department were not within the purview of Section 35E and that the Tribunal could not go beyond the points specified by the Board. The Tribunal found that while it is bound to consider all the points raised in the Board's order, it can also consider short grounds for remand if they do not touch on classification or valuation issues. The Tribunal held that the short grounds pleaded by the Department were within its jurisdiction and justified a remand.

Conclusion:
The Tribunal allowed the appeal by the Department and remanded the case back to the Collector. The Collector was directed to make available the copies of the invoices relating to the purchase of Titanium Dioxide to the Department for verification, consider all the evidence cited in the S.C.N., and allow cross-examination of the deponents if their statements were to be relied upon. The Tribunal emphasized the need for a fair and proper adjudication process, ensuring that all relevant evidence is considered and both parties are given a fair opportunity to present their case.

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