2000 (12) TMI 578 - AT - Central Excise

Summary

Issues Involved:
1. Voluntariness of statements and deposit.
2. Right to cross-examine witnesses.
3. Completeness and correctness of diary entries.
4. Investigation into inputs and sales.
5. Adequacy of the Commissioner's findings and computation of duty.

Issue-wise Detailed Analysis:

1. Voluntariness of Statements and Deposit:
The appellant contended that the statements of Sri Suyaraj and others were recorded under duress, threat, and coercion. The deposit of Rs. 75,000/- was not voluntary and was challenged before the High Court of Madras, which accepted this plea. The High Court directed the authorities to refund the amount, acknowledging that the demands had not been paid voluntarily. The Commissioner failed to consider this aspect in the impugned order, leading to its challenge.

2. Right to Cross-examine Witnesses:
The appellant requested the cross-examination of witnesses, including the Superintendent of Central Excise, as some statements were incriminatory. The Commissioner did not address this request, nor provided reasons for its rejection. The denial of cross-examination was argued to be prejudicial to the appellant's rights and violative of principles of natural justice. The judgments cited by the appellant emphasized the necessity of cross-examination when statements of third parties are relied upon.

3. Completeness and Correctness of Diary Entries:
The appellant challenged the diary entries, questioning their completeness and the ability to indicate sufficient funds for manufacturing and supplying goods. The diary was sent to handwriting experts, but no conclusive opinion regarding the age and exact time of writing was provided. The Commissioner did not adequately address the appellant's concerns about the diary entries in the impugned order.

4. Investigation into Inputs and Sales:
The appellant argued that there was no thorough investigation regarding the purchase of inputs for manufacturing and the extent of sales. The Commissioner did not provide findings on these aspects, nor did he examine the evidence of statements from various persons. The lack of investigation into the inputs and sales raised doubts about the correctness of the duty computation.

5. Adequacy of the Commissioner's Findings and Computation of Duty:
The Commissioner failed to give a clear finding on the quantification of amounts based on the statements recorded. There was no analysis of the evidence or discussion on how the quantification of Rs. 23,73,837.64 was arrived at. The Commissioner did not examine the effect of the statements given by various persons and whether the duty had been properly computed. The impugned order lacked detailed reasoning and analysis, making it a non-speaking order.

Conclusion:
The Tribunal set aside the impugned order and remanded the matter back to the Commissioner for de novo consideration. The Commissioner was directed to hear the appellants on the right to cross-examine witnesses and to provide findings on duty computation, manufacture, and clearance of goods. The Commissioner was instructed to address all the pleas raised by the appellants and ensure a thorough examination of the evidence and quantification of duty. The appeal was allowed by way of remand for a fresh adjudication.