2014 (1) TMI 68 - HC - Customs

Duty demand - Enhancement in duty demand - Denial of right of cross-examination - Held that - tribunal has correctly recorded that the enhanced demand was on account of examination of records and new facts coming to light for the Revenue. In these circumstances, the second show cause notice was issued. This notice was in fact akin to rectification or corrigendum to the original show cause notice. Tribunal has also mentioned that the original show cause notice did not take into account the Special Duty of Customs while computing quantum of duty evaded. It has been recorded that the second show cause notice itself was within five years from the disputed period and, thus, the question of limitation did not arise - findings recorded by the tribunal are perverse, or based upon no material or evidence - appellant has not been able to point out and show that the findings recorded by the tribunal are perverse or based upon no evidence or material - Decided against assessee.

Summary

Issues:
1. Delay in filing the appeal against the order passed by the Customs, Excise and Service Tax Appellate Tribunal.
2. Denial of right of cross-examination of departmental officers during the inspection of the factory.
3. Discrepancies in physical stock, unrecorded goods, and shortage noticed during the inspection.
4. Validity of the second show cause notice enhancing the duty demand.
5. Challenge to the conclusions of fact by the tribunal.
6. No other issues argued or pressed.

Analysis:

1. The appeal filed by the assessee against the Customs, Excise and Service Tax Appellate Tribunal's order was delayed by 185 days. The court decided to examine the appeal on merits before considering the condonation of delay application.

2. The appellant contended that the denial of the right of cross-examination of departmental officers during the factory inspection violated the principles of natural justice. However, the tribunal found that the Revenue's case was based on records and not on the statement of any investigating officer. The appellant was held responsible for accounting for the duty-free imported goods.

3. During the inspection, discrepancies were found in the physical stock, unrecorded goods, and shortages. Statements accepting sales without invoices were referred to, and the appellant failed to provide satisfactory evidence to support their alibi. The appellant's inability to show processing of imported goods and lack of proper accounts for stock were noted.

4. The appellant raised a legal contention regarding the validity of the second show cause notice enhancing the duty demand. The tribunal found that the enhanced demand was based on new facts and examination of records, justifying the issuance of the second notice. The tribunal also clarified that the notice was akin to rectification and was issued within the permissible time frame.

5. The court emphasized that conclusions of fact could only be challenged if found to be perverse or lacking evidence. The appellant's counsel failed to demonstrate that the tribunal's findings were perverse or unsupported by evidence.

6. No other issues were raised or argued during the proceedings. Consequently, the court dismissed the condonation of delay application and the appeal itself based on the discussed points and findings.