2018 (10) TMI 1467 - AT - Central Excise

Clandestine removal - opportunity to the appellants to cross examine the department witnesses declined - principles of natural justice - Held that - From the panchnama dated 08.08.2011 as prepared during the search of the factory as well as residential premises of the present appellant, it appears that the various records in the form of loose kacha parchi, gutkas, books etc. were recovered. Admittedly, all these documents were showing clearance of bare copper wire. The plea of proprietor of appellant as apparent from his statement that due to stiff market competition pucca record/invoices were not raised is not at all sustainable. The Department is observed to have been meticulous in examining the records even of the transporters, i.e. the locally available tempos/ rickshaws and even the private vehicles to M/s Reliance Cable Industries and the other customers of the appellant and have concluded the corroboration of alleged clandestine removal of bare copper wire by the appellants. Even the records recovered during search in the premises of M/s Reliance Cable Industries there was apparent corroboration to the values at which the finished goods as well as the raw material was sold by the appellant to them. Not only this, there is the admission in the statement of Shri Lalit Jain that he had been purchasing both accounted and unaccounted bare copper wire from the appellants. As far as the plea about no opportunity for cross examination of the witnesses as have been relied upon by the Department for confirming the impugned demand against the appellant, it is observed from the record that the appellant requested for the cross examination of three panch witnesses only - Appeal dismissed.

Summary

Issues:
Appeal against Central Excise duty demand - Search conducted - Seizure of goods - Allegations of clandestine removal - Violation of procedural laws - Cross-examination of witnesses - Reliance on judgments.

Analysis:
The judgment involves an appeal against a Central Excise duty demand following a search conducted at the appellant's premises, leading to the seizure of unaccounted finished goods and raw materials. The appellant, engaged in manufacturing copper wire, used a chemical known as Cu-56 for reducing wire thickness. The Department raised a demand of ?4,46,93,175 under Section 11A of the Central Excise Act, 1944, supported by evidence from the search and statements recorded. The appellant challenged the order, alleging procedural violations and lack of opportunity for cross-examination.

The appellant contended that the search violated procedural laws and raised concerns about the authenticity of the Panchnama prepared during the search. They argued that certain crucial aspects, such as the recovery of cash and discrepancies in witness statements, were overlooked. Additionally, the appellant highlighted the non-allowance of cross-examination of witnesses and presented evidence to counter the allegations of clandestine removal, including VAT payment records and reliance on previous judgments.

The Tribunal carefully examined the evidence, including recovered documents and statements, to ascertain the validity of the Central Excise duty demand. The Tribunal noted that the recovered records indicated transactions related to copper wire, with acknowledgments from involved parties. Despite the appellant's emphasis on VAT discharge documents, the Tribunal found them insufficient to refute the admissions made by the appellant and other parties involved. The Tribunal also addressed the issue of cross-examination, noting the appellant's limited request and subsequent agreement to proceed without further examination due to witness unavailability.

In the judgment, the Tribunal differentiated the present case from previous judgments relied upon by the appellant, emphasizing the direct evidence against the appellant from documents recovered at their premises. The Tribunal upheld the impugned order, citing meticulous examination of evidence supporting the alleged clandestine removal of copper wire. The Tribunal dismissed the appeal, concluding that the order was well-founded and based on substantial evidence, ultimately affirming the Central Excise duty demand against the appellant.

In conclusion, the Tribunal found no merit in the appellant's grounds of appeal, noting the comprehensive evaluation of evidence and the lack of strength in the appellant's arguments. The judgment highlighted the thorough consideration of the case, ultimately leading to the dismissal of the appeal and upholding of the Central Excise duty demand against the appellant.