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2017 (10) TMI 1108 - AT - Central ExciseMaintainability of appeal - authorization as per section 35B of the CEA 1944 - Clandestine removal - ingots - it was alleged that the ingots were received in the factory of the respondent and they cleared the same without recording in their statutory records - Whether the appeal is maintainable under section 35(b)(2) of the Central Excise Act 1944 or not? - Held that - from the records of the case it is not coming out when the committee was found and was constituted. Moreover, both the Commissioners have signed on the Review order without date and even in one case without name. The said records does not show that whether the officers applied their mind to the issue and recorded any opinion as per the requirement of section 35(b) of the Central Excise Act. Why the order of Commissioner (A) was not legal or proper and warranted to be challenged by the Commissioner (A) - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE, DELHI-I Versus KUNDALIA INDUSTRIES 2012 (8) TMI 789 - DELHI HIGH COURT , where it was held that No opinion is formed by the Committee of Commissioners about the illegality of the order as required under Section 35B of the Central Excise Act. There was no authorization by the Committee of Commissioners to file appeal on its behalf - appeal dismissed being non-maintainable. Whether during the relevant period, the Additional Director General of DGCEI was having the jurisdiction to issue SCN? - Held that - the SCN has been issued to the respondent on 08.05.2001. Whereas the N/N. 38/2001-CE(NT) dated 26.06.2001 was effective from 01.07.2001. Admittedly, the SCN has been issued prior to the effective date of N/N. 38/2001-CE(NT) - at the time of issuance of the show cause notice, the Additional Director General, Shri R.K. Sharma of DGCEI was not having any jurisdiction to issue the show cause notice - decided in favor of respondent-assessee. Whether the adjudicating authority was an appropriate officer to adjudicate the matter or not? - Held that - In terms of the office memo dated 12.02.1958, 23.03.1958 and 28.05.1958 it has been stipulated that for Gazetted appointments, there should be a gazette notification. As no such notification has been placed on record for promotion and appointment of Shri Rajiv Aggarwal as Joint Commissioner, therefore, the adjudication order passed by him as Joint Commissioner is not sustainable in the eyes of law - decided in favor of respondent-assessee. Whether the retracted statement of Shri Purushottam Kumar Gupta is admissible evidence or not? - Held that - the retraction made by the respondent is available on record. Therefore, the retraction made by the respondent is required to be considered and no credence of retraction was given. Therefore, the said retraction is admissible. Consequently, the statements given by Shri Purushottam Kumar Gupta on 10.10.2000 and 08.03.2001 are not admissible as an evidence - decided in favor of respondent-assessee. Whether the loose slips recovered from Dharamkanta can be relied upon to allege clandestine removal of goods or not? - Held that - the katcha slips has not been identified by the panch witness, therefore, the statements of Shri Purushottam Das Gupta and these katcha slips cannot be the basis to allege clandestine clearance of the goods. Moreover, Shri Nepal Singh also denied that he has written these documents during the cross examination. No other evidence has been produced by the Revenue on record to allege clandestine removal of the goods and in the absence of any concrete evidence on record, the charge of clandestine removal of goods is not sustainable against the respondent - decided in favor of respondent assessee. Whether penalty on Shri Purushottam Kumar Gupta can be imposed or not? - Held that - As the charge of clandestine removal is not sustainable against the respondents, therefore, no penalty can be imposed on the respondents. Appeal dismissed - decided against Revenue.
Issues Involved:
1. Maintainability of the appeal under section 35(b)(2) of the Central Excise Act 1944. 2. Jurisdiction of the Additional Director General of DGCEI to issue the show cause notice. 3. Authority of the adjudicating officer to adjudicate the matter. 4. Admissibility of the retracted statement of Shri Purushottam Kumar Gupta as evidence. 5. Reliability of the loose slips recovered from Dharamkanta to allege clandestine removal of goods. 6. Imposition of penalty on Shri Purushottam Kumar Gupta. Detailed Analysis: Issue No. 1: Maintainability of the Appeal The respondent's counsel objected to the appeal's maintainability, arguing that the authorization for the appeal did not comply with Section 35B of the Central Excise Act 1944. The review order lacked details of any meeting between members of the Committee of Commissioners and was undated. The Delhi High Court's decision in Kundalia Industries was cited, emphasizing the need for a meaningful consideration by the Committee of Commissioners, which was absent in this case. Therefore, the appeal was deemed non-maintainable. Issue No. 2: Jurisdiction of the Additional Director General of DGCEI The respondent argued that the Additional Director General of DGCEI lacked jurisdiction to issue the show cause notice dated 08.05.2001, as the relevant notification (No. 38/2001-CE(NT)) became effective only on 01.07.2001. The Commissioner (A) correctly held that the Additional Director General did not have jurisdiction at the time of issuing the notice, thus ruling in favor of the respondent. Issue No. 3: Authority of the Adjudicating Officer The respondent contested the authority of Shri Rajiv Aggarwal, who adjudicated the matter as Joint Commissioner without a Gazette notification confirming his appointment. The requirement for a Gazette notification for Gazetted appointments was not met, rendering the adjudication order unsustainable. The Commissioner (A) upheld this objection, ruling in favor of the respondent. Issue No. 4: Admissibility of the Retracted Statement Shri Purushottam Kumar Gupta retracted his statements made during the investigation, claiming they were obtained under duress. The Commissioner (A) acknowledged the retraction letters and found them admissible, concluding that the original statements were not credible evidence. This issue was resolved in favor of the respondent. Issue No. 5: Reliability of Loose Slips The loose slips recovered from Dharamkanta, which formed the basis for the demand, were not corroborated by the panch witnesses. The panch witnesses could not confirm the seizure of these slips from the factory, and the slips were not identified by the alleged scribe, Shri Nepal Singh. The absence of concrete evidence led to the conclusion that the slips could not substantiate the charge of clandestine removal. The Commissioner (A) ruled in favor of the respondent on this issue as well. Issue No. 6: Imposition of Penalty Given that the charge of clandestine removal was not substantiated, no penalty could be imposed on the respondents. The Commissioner (A) upheld this view, ruling in favor of the respondent. Conclusion: The judgment upheld the impugned order, dismissing the appeal filed by the Revenue and ruling in favor of the respondent on all issues. The cross objections were disposed of accordingly.
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