2017 (3) TMI 774 - AT - Central Excise

Principles of natural justice - confiscation of excess found goods - currency - Held that - the Revenue s entire case is based upon the loose chits recovered during the course of search of the factory read with the statements of various persons. Though the appellant had made a request for cross examination of the said deponents so as to establish the veracity of the truth of the said statements the adjudicating authority has neither referred to the said request nor decided on the same and proceeded to pass the final impugned order - There is no justification for jettisoning the procedure statutorily prescribed by plenary legislation for admitting into evidence and statement recorded before the Gazetted central Excise Officer - matter is remanded for consideration afresh - appeal allowed by way of remand.

Summary

Issues:
1. Confiscation of excess goods and currency belonging to a company.
2. Demand confirmation, interest imposition, and penalties under the Central Excise Act.
3. Allegations of clandestine manufacture and removal of final products.
4. Violation of natural justice principles in adjudication process.
5. Request for cross-examination of witnesses and relevance of statements.
6. Legal implications of evidence based on statements without examination in chief.
7. Remand for de novo adjudication and consideration of evidence.

Analysis:

Issue 1: Confiscation of excess goods and currency
The judgment revolves around the confiscation of excess copper rods, copper ingots, and Indian currency belonging to a manufacturing unit. The adjudicating authority imposed redemption fines and penalties on the company's partner, leading to appeals challenging the order.

Issue 2: Demand confirmation and penalties
The Commissioner confirmed demands against the company for a significant amount, along with interest and penalties under the Central Excise Act. The penalties were also imposed on the company's partner and other appellants involved in the supply chain of raw materials.

Issue 3: Clandestine manufacture and removal
Allegations of clandestine manufacture and removal of final products were made against the company, leading to penalties and demands being confirmed. The case involved discrepancies in records and statements from supervisors and partners, indicating potential irregularities.

Issue 4: Violation of natural justice
The appellant argued a violation of natural justice principles, emphasizing the lack of opportunity for cross-examination of witnesses and defense against the statements relied upon by the adjudicating authority. The failure to address this request was seen as a procedural flaw.

Issue 5: Cross-examination and statement relevance
The appellant sought cross-examination of witnesses to challenge the veracity of statements used as evidence. The judgment highlighted the importance of examining witnesses in chief before the adjudicating authority, as per legal precedents.

Issue 6: Legal implications of evidence
The judgment emphasized the statutory procedure for admitting evidence and the need for witnesses to be examined in chief. Failure to follow this procedure could render statements inadmissible as evidence, impacting the validity of the case against the appellant.

Issue 7: Remand for de novo adjudication
In light of the procedural irregularities and legal precedents, the judgment set aside the impugned order and remanded the matter for de novo adjudication. The adjudicating authority was directed to consider the appellant's request for cross-examination and review all available evidence before making a decision.