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2015 (9) TMI 1151 - HC - Central ExciseClandestine manufacture and removal of goods - Confiscation of goods - Whether the decision of the Customs, Excise and Service Tax Appellate Tribunal upholding demand of ₹ 58,54,825/- and confiscation of 24 air-conditioners along with duty and penalty demand of ₹ 3,16,800/- is perverse and contrary to the facts on record - Held that - There is no attempt made by the Department to substantiate the allegation of manufacture of as many as 606 ACs by the Appellant. No evidence has been produced to show that the basic raw materials required for manufacturing such a large number of ACs was procured by the Appellant. - impugned majority order of the CESTAT on the issue of clandestine removal of 606 ACs by the Appellant without payment of duty suffers from serious errors and, therefore, cannot be sustained in law. - Court is not inclined to consider the plea of the Respondent that the matter should be remanded for a fresh consideration by the CESTAT. In the first place, it must be remembered that the search operation in this case took place way back in 1992. The long drawn process of adjudication over a period of 12 years was followed by the judicial review process for another 10 years. Sending the case back to the CESTAT for a fresh determination would prolong the case interminably. The question of now producing persons whose statements were recorded 23 years after the event for cross-examination is impractical and not feasible. Secondly, no fresh material has to be brought on record to warrant a re-look. The Court is satisfied that the existing material is insufficient to sustain the adjudication order of the CCE on the issue. Court set asides the impugned majority order of the CESTAT on the issue concerning the alleged clandestine removal of the 606 ACs by the Appellant and hereby quashes the corresponding demand - Court in regard to the removal of 606 ACs is accordingly answered in favour of the Assessee and against the Revenue. - impugned majority order of the CESTAT as regards the issue of the clandestine removal of 24 ACs with the corresponding duty demand of ₹ 3,16,800 is hereby affirmed. - Decided partly in favour of assessee.
Issues Involved:
1. Maintainability of the Appeal 2. Clandestine Removal of 24 Air-Conditioners (ACs) 3. Clandestine Removal of 606 Air-Conditioners (ACs) Detailed Analysis: 1. Maintainability of the Appeal: The respondent raised a preliminary objection regarding the maintainability of the appeal, arguing that the issue involved exemption related to the rate of duty of excise. The Court rejected this preliminary objection, noting that the issues in the present appeal did not touch upon the aspect of any grant of exemption having a bearing on the rate of duty or value of goods. The Court also highlighted that when the appeal was admitted, no question was framed regarding its maintainability. 2. Clandestine Removal of 24 Air-Conditioners (ACs): The appellant did not challenge the duty demand of Rs. 3,16,800 corresponding to the clandestine removal of 24 ACs. Consequently, the Court affirmed the impugned order of the CCE regarding this issue. 3. Clandestine Removal of 606 Air-Conditioners (ACs): The main issue contested by the appellant was the alleged clandestine removal of 606 ACs with a corresponding duty demand of Rs. 58,44,825. The Court's analysis focused on the following points: Evidence and Cross-Examination: - The Excise Department relied on statements from alleged buyers, ledger entry discrepancies, and statements from Mr. Pradeep Bhargava, Mr. Shiv Prasad of KBL, and Mr. Subba Rao of SRR. - The appellant requested cross-examination of these witnesses, which was denied by the CCE on the grounds that it would delay the adjudication process and was not a legal requirement. - The Court held that denying the opportunity for cross-examination vitiated the adjudication order, citing settled law that such denial would invalidate the order. The Court emphasized that exceptional circumstances under Section 9D of the CE Act were not demonstrated by the Department to justify the denial. Ledger Entries and Explanations: - The appellant provided detailed explanations for the ledger entries, which were not adequately addressed by the CCE or the Member (Technical) of CESTAT. - The Court found that the non-consideration of the appellant's plausible explanations seriously vitiated the adjudication order. Investigation Standards: - The Court noted that no serious investigation was undertaken regarding the details furnished by the appellant or those gathered during the investigation. - The Court referenced several precedents emphasizing the need for tangible evidence of clandestine manufacture and clearance, which was lacking in this case. Conclusion: - The Court overturned the impugned majority order of the CESTAT on the issue of clandestine removal of 606 ACs, quashing the corresponding duty demand of Rs. 58,44,825. - The Court declined to remand the case for fresh consideration, citing the impracticality of producing witnesses for cross-examination 23 years after the event and the insufficiency of existing material to sustain the adjudication order. Final Judgment: - The Court set aside the impugned majority order of the CESTAT regarding the clandestine removal of 606 ACs and quashed the corresponding duty demand of Rs. 58,44,825. - The Court affirmed the impugned majority order of the CESTAT concerning the duty demand of Rs. 3,16,800 for the clandestine removal of 24 ACs. - The appeal was disposed of with no order as to costs.
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