2017 (1) TMI 703 - AT - Central Excise

Principles of natural justice - CENVAT credit - fake invoices - whether the appellant had correctly availed CENVAT credit on the nine consignments of copper ingots, which they claim to have been received in their premises/job workers premises and used in or in relation to the manufacture of finished goods? - Held that - reliance was placed in the case of Manic Chemicals Pvt. Ltd. Vs. Union of India 2015 (12) TMI 1267 - GUJARAT HIGH COURT , denial of cross examination of witnesses by the authorities below in passing the order, goes to the very root of the matter and accordingly untenable in law - the appellant should be given a fair chance for cross examination of the said witness namely, Shri Mahesh Gupta, Authorised Signatory of the Transport Company in the interest of justice - matter on remand - appeal allowed by way of remand.

Summary

Issues:
- Correct availing of CENVAT credit on copper ingots
- Denial of cross-examination leading to violation of natural justice

Analysis:
1. Correct availing of CENVAT credit on copper ingots:
The case involved appeals against an order confirming a demand notice for recovery of CENVAT credit on nine consignments of copper ingots. The appellant claimed to have received the consignments and availed credit, while the authorities alleged non-receipt and a mere paper transaction. The appellant's advocate argued that denial of cross-examination of a key witness, Shri Arun Kumar Singh, violated the principle of natural justice. The appellate tribunal noted the reliance on the witness's statement and reports from RTO offices to conclude non-receipt. However, citing legal precedents, the tribunal emphasized the importance of cross-examination for a fair hearing. Consequently, the tribunal set aside the impugned order and remanded the case for allowing cross-examination and a fresh decision, emphasizing the need for a fair chance for the appellant.

2. Denial of cross-examination leading to violation of natural justice:
The crux of the issue revolved around the denial of cross-examination of the witness, Shri Arun Kumar Singh, whose statement played a crucial role in the decision. The appellant contended that without the opportunity for cross-examination, the confirmation of the demand based on the witness's statement was legally untenable. The tribunal, in line with legal principles established by the Hon'ble Gujarat High Court, agreed that the denial of cross-examination undermined the fairness of the proceedings. By setting aside the order and remanding the case for cross-examination and a fresh decision, the tribunal upheld the significance of natural justice in such matters, ensuring a fair opportunity for the appellant to present their case effectively and challenge the evidence against them.

In conclusion, the judgment highlighted the importance of procedural fairness, particularly the right to cross-examination, in matters concerning the availing of credits and allegations of non-receipt. By emphasizing the need for a fair chance for the appellant to challenge the evidence against them, the tribunal ensured that the principles of natural justice were upheld in the adjudication process, ultimately leading to a remand for a more comprehensive and just determination of the issues at hand.