2017 (11) TMI 938 - AT - Central Excise

Shortage of goods - The grievance of the Appellant is also that they were not allowed cross-examination of the witnesses even though specifically directed by this Tribunal in its order dated 17.11.2006 - whether there was shortages in the finished stock of goods and the raw materials of 1,60,562.51 kgs. as recorded in the panchnama dated 22.12.1998/24.12.1998? Held that - the principle of law on admissibility of allowing cross-examination has been well settled by the Hon ble Supreme Court in a series of cases including the violation in the case of C.C.E., Kolkata II vs. Andaman Timbers Ltd. 2015 (10) TMI 442 - SUPREME COURT - the matters are remanded to the ld. Commissioner with the direction to allow cross-examination of witnesses as already directed by this Tribunal vide its order dated 17.11.2006 - appeal allowed by way of remand.

Summary

Issues:
1. Cross-examination of witnesses not allowed by the Commissioner.
2. Alleged overlapping/double demand on shortage quantity goods.
3. Admissibility of cross-examination and violation of natural justice.

Analysis:

Issue 1: Cross-examination of witnesses
The Appellants contended that the Commissioner did not allow cross-examination of key witnesses, as directed by the Tribunal in a previous order. The Appellants argued that this denial violated the principle of natural justice. The Advocate referred to a Supreme Court decision to support their argument. On the other hand, the Revenue submitted that some witnesses were allowed for cross-examination, but others were not permitted due to the admission of shortages by the Appellant's employees. The Tribunal noted the importance of allowing cross-examination, especially in cases involving discrepancies. Ultimately, the Tribunal set aside the impugned order and remanded the matter to the Commissioner with a direction to allow cross-examination of witnesses as previously directed by the Tribunal.

Issue 2: Overlapping/double demand on shortage quantity goods
The Appellants raised concerns about overlapping/double demand on shortage quantity goods, specifically regarding the correction of the RG-1 register to adjust shortages from the closing balance of goods. They argued that this led to erroneous stock positions and subsequent double demands. The Tribunal acknowledged this issue and directed the Commissioner to examine the alleged overlapping of demand on shortages noticed on different dates. The Tribunal emphasized the need for a thorough review of the stock discrepancies to ensure accuracy in duty demands.

Issue 3: Admissibility of cross-examination and violation of natural justice
The Appellants strongly argued that the denial of cross-examination of witnesses was a violation of the principle of natural justice. They referenced a previous order by the Tribunal and a Supreme Court decision to support their stance. The Tribunal reiterated the importance of allowing cross-examination to ensure a fair and transparent adjudication process. By setting aside the impugned order and remanding the matter, the Tribunal emphasized the need for a reasonable opportunity for the Appellants to present their case effectively. All issues were kept open for further examination during the remand process to uphold the principles of natural justice and fair adjudication.

In conclusion, the Tribunal allowed the Appeals by remand, emphasizing the significance of cross-examination, addressing concerns of double demands, and ensuring a fair hearing for the Appellants.