2016 (12) TMI 90 - AT - Central Excise

Recovery of duty - clandestine removal - 100% EOU - fake transactions - opportunity of being heard - Held that - In confirming the demand against the appellants M/s. Premier Polyspin Pvt. Limited, the adjudicating authority considered evidences mainly in the form of statements, which the appellants claimed to be not reliable and sought cross-examination of Shri Haroon Razaq Chhaya, Shri Irfan Gulam Rasool Saiyed and Shri Rashid Sadatli Saiyed. Also, the grievance of the appellant is that no effective personal hearing was extended to them inasmuch as three consecutive dates of hearing was given by the adjudicating authority without affording time for them to attend the personal hearing and defend their case. Also, the ld. Advocate argued that M/s. Premier Polyspin Pvt. Limited and Shri Rohit Dharamprakash Gupta were neither given the relied upon documents nor un-relied upon documents retrieved from their premises were returned to them so as to prepare their reply to show cause notice and submit before the adjudicating authority. Cumulatively, thus the crux of the argument is, there has been gross violation of principles of natural justice. Therefore, in the interest of justice, I am of the opinion that appellants M/s. Sunshine Overseas, Shri Haroon Razaq Chhaya, Shri Irfan Gulam Rasool Saiyed and Shri Rashid Sadatli Saiyed be allowed e cross-examination of witnesses requested by them except the panch witnesses and M/s. M/s. Premier Polyspin Pvt. Limited and Shri Rohit Dharamprakash Gupta be supplied with the copies of relied upon documents and the un-relied upon documents be returned to them. The ld. Advocate undertakes to furnish reply to the show cause notice within fortnight from the date of receipt of the said documents. At this stage, ld. AR for the Revenue submitted that the matter has been pending for more than a decade, hence a time-frame be fixed for completion of the adjudication proceeding. Appeal allowed by way of remand.

Summary

Issues involved:
Appeals filed against OIA-RS/99-102/SRT-II/07 and OIA-BC/37-38/SURAT-II/2011; violation of principles of natural justice; demand notice issued for duty recovery; imposition of penalties; denial of cross-examination; non-supply of relied upon documents; completion of adjudication proceeding.

Detailed Analysis:
1. Common Issue in Appeals: The Appeals were filed against OIA-RS/99-102/SRT-II/07 and OIA-BC/37-38/SURAT-II/2011, with common issues involved. The investigation revealed discrepancies in the transactions between M/s. Sunshine Overseas and M/s. Premier Polyspin Pvt. Limited, leading to demand notices and penalties imposed on the appellants.

2. Violation of Principles of Natural Justice: The appellants argued that the ex-parte orders were passed without affording them sufficient opportunity to participate in the adjudication process. Allegations included not receiving relied upon documents, lack of communication about personal hearings, and denial of cross-examination of relevant witnesses, leading to a violation of natural justice principles.

3. Cross-Examination and Document Supply: The appellants requested cross-examination of witnesses and the supply of relied upon documents. The adjudicating authority's reliance on statements was contested as unreliable. The need for proper personal hearings and access to necessary documents for preparing responses was emphasized.

4. Revenue's Position: The Revenue argued that M/s. Premier Polyspin Pvt. Limited and another appellant did not file replies or request relied upon documents. The case was decided based on available evidence, as per the Revenue's submission.

5. Judgment and Direction: The Hon'ble Member found merit in the appellants' arguments regarding the violation of natural justice. As a remedy, the appellants were allowed to cross-examine witnesses (except panch witnesses) and were directed to be supplied with relied upon documents. A time-frame was set for the completion of the adjudication proceeding to ensure timely resolution.

6. Conclusion: The Appeals were allowed by way of remand, emphasizing the importance of upholding principles of natural justice, providing opportunities for cross-examination, and ensuring the proper supply of documents for a fair adjudication process. The direction aimed to expedite the proceedings while maintaining fairness and cooperation from both parties.