2018 (6) TMI 1418 - AT - Central Excise

Clandestine removal - principles of natural justice - Held that - In this case after repeated request of the appellant no cross examination of Shri S K Panari was granted to the appellant which is in gross violation of principles of natural justice - demand against the appellants on account of removal of goods is not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Appeal against duty demand and penalty for clandestine removal of goods.

Analysis:
The case involved an appeal against an order demanding duty and imposing penalties on the appellants for clandestine removal of goods. The investigation was initiated based on intelligence received regarding certain iron and steel manufacturers engaged in such activities through a commission agent. The appellants contested the demand and penalties imposed, arguing that similar demands in other cases had been set aside by the Tribunal. The AR, however, pointed out acknowledgments of clearance by certain individuals, asserting the sustainability of the demand. The Counsel countered by highlighting contradictions in the order and the lack of admission by the individuals mentioned. The Tribunal examined the conflicting paragraphs in the order and noted the absence of cross-examination of a key witness, emphasizing the violation of natural justice principles. Relying on previous decisions and principles of law, the Tribunal concluded that the demand against the appellants for goods removal was not sustainable. Consequently, the impugned order was set aside, and the appeals were allowed.

This judgment dealt with the issue of duty demand and penalty imposition on the appellants for clandestine removal of goods based on an investigation prompted by intelligence received. The Tribunal considered arguments from both sides regarding the sustainability of the demand, with the appellants citing precedents where similar demands were set aside. The AR highlighted acknowledgments of goods clearance by certain individuals, while the Counsel emphasized the lack of admission by those individuals. The Tribunal scrutinized specific paragraphs in the order, noting contradictions and the denial of cross-examination to a key witness, which was deemed a violation of natural justice principles. Relying on legal precedents and principles, the Tribunal ultimately found the demand against the appellants not sustainable, leading to the setting aside of the impugned order and allowing the appeals.

The judgment also addressed the issue of contradictory paragraphs in the order and the absence of cross-examination, emphasizing the violation of natural justice principles. The Tribunal examined the conflicting statements in the order and the denial of cross-examination to a crucial witness, citing a High Court decision and previous Tribunal rulings to support its conclusion. By highlighting the inconsistencies and procedural irregularities, the Tribunal underscored the importance of adhering to principles of natural justice in adjudicating such matters. Ultimately, this aspect played a significant role in the Tribunal's decision to set aside the impugned order and allow the appeals with consequential relief, if any.