1996 (11) TMI 265 - AT - Central Excise

Summary

Issues:
Jurisdiction of Assistant Director, Anti Evasion to issue show cause notice.
Consideration of electricity consumption for production of tread rubber.
Violation of principles of natural justice regarding cross-examination of witnesses.
Inconsistencies in norms used for determining clandestine manufacture and removal of tread rubber.

Jurisdiction Issue:
The appellants contended that the Assistant Director, Anti Evasion had no jurisdiction to issue the show cause notice. The Tribunal allowed this plea, emphasizing that this jurisdictional question is fundamental and should be considered by the adjudicating authority. Citing a previous Special Bench decision, the Tribunal highlighted that the Assistant Director's authority was limited before a specific notification. The Tribunal deemed the impugned order as non-speaking and remanded the matter for fresh adjudication to address the jurisdictional issue adequately.

Electricity Consumption Issue:
The appellants argued that the adjudicating authority failed to consider electricity consumption in determining tread rubber production, leading to a violation of natural justice principles. The Tribunal noted that the authority used different criteria for different periods without justifying the exclusion of electricity consumption as a relevant factor. Relying on consistent Tribunal decisions, the Tribunal set aside the impugned order, directing the authority to reconsider the case, emphasizing the importance of electricity consumption and department norms in determining production quantities.

Violation of Natural Justice Issue - Cross-Examination:
The appellants requested cross-examination of witnesses whose statements were pivotal in determining clandestine activities. Despite this request and absence of evidence showing waiver or mistake, the adjudicating authority denied the opportunity, citing lack of insistence during a personal hearing. The Tribunal found a clear violation of natural justice, highlighting the authority's failure to provide a fair cross-examination opportunity. Consequently, the Tribunal set aside the order and mandated a fresh adjudication with proper adherence to principles of natural justice.

Inconsistencies in Norms Issue:
The Tribunal observed discrepancies in the norms used by the adjudicating authority for assessing clandestine manufacture and removal of tread rubber. The appellants argued for consistent application of electricity consumption in line with Tribunal precedents. Noting the authority's failure to justify the deviation from this practice, the Tribunal annulled the impugned order, instructing a reevaluation with due consideration to electricity consumption and department norms. The appellants were granted the opportunity to present all relevant evidence during the fresh proceedings.