2019 (7) TMI 825 - AT - Central Excise

Clandestine removal - SSI denied on the ground that the units have suppressed the production / clearances with an intent to evade payment of excise duty - ex-parte order - principles of natural justice - HELD THAT - Even though the appellants have challenged the demand on the ground that the author of these papers was not investigated but the fact remains that the clearances mentioned in the said papers stand accepted by Shri Mashrubhai Bharwad, tempo driver, who had transported these goods to M/s SCEL. Further Shri Yogeshbhai Shah who is Managing Director of M/s SECL and partner of M/s Mili Detergent Industries himself has accepted that the papers pertained to goods cleared by the three units to M/s SECL. In such case when the partner of the consignor unit and Managing Director of consignee unit has accepted removal of receipt of goods from M/s Mili Detergent to M/s SECL, it leaves no doubt that the details found in loose papers pertain to clandestine clearance by three units to M/s SECL. Principles of natural justice - grant of cross examination - HELD THAT - The cross examination of Shri Mashrubhai Bharwad was already allowed earlier and therefore there was no reason for the adjudicating authority to grant cross examination again and again and cannot be considered to be violative of principles of natural justice. There is no reason to grant cross examination of the officers as there is no doubt about the investigation proceedings. The clandestine removal stands by the consignors as well as consignee and also by the transporter stands accepted - appeal dismissed - decided against the assessee.

Summary

Issues: Alleged clandestine removal of goods without payment of excise duty based on seized documents and statements.

Detailed Analysis:
1. The present appeals were filed against the OIO dated 21.04.2009 passed by the Commissioner, Central Excise, Ahmedabad-II, regarding alleged clandestine removal of goods without payment of excise duty by M/s Mili Detergent Industries, M/s Superchem, M/s Shree Jalaram Chemical Industries, and M/s Sonal Cosmetics (Exports) Ltd. The case involved officers visiting M/s Sonal Cosmetics (Exports) Ltd (SCEL), where records and documents were seized, including loose papers indicating clearances of detergent powder from the other appellants. Statements from involved parties confirmed the details in the seized papers, pointing towards clandestine clearances without payment of duty.

2. The main contention raised by the appellants was the lack of documentary evidence to substantiate the charges of clandestine removal, primarily based on 11 loose papers recovered from a third party's office and statements of individuals. The appellants argued that without cross-examination of key individuals and departmental officers, the allegations could not be proven. They relied on various Tribunal judgments to support their stance that without proper cross-examination, the charges could not be upheld. Additionally, they claimed that the demands were time-barred and that the admission by proprietors without sufficient evidence was not enough to confirm the demand.

3. The Revenue, represented by the Authorized Representative, reiterated the findings of the impugned order and sought its validation. The Tribunal, after considering the lengthy history of litigation in the case, decided to resolve the matter based on the case records due to its prolonged duration of 24 years.

4. Upon thorough review and analysis of the case records, the Tribunal found that the seized papers contained details of clearances of detergent powder from the appellants to M/s SCEL, confirmed by statements from involved parties. Despite challenges regarding the authorship of the papers and lack of investigation into the author, key individuals, including the Managing Director of M/s SCEL and partner of M/s Mili Detergent Industries, acknowledged the clearances mentioned in the papers. The Tribunal noted that the details found in the seized papers indicated clandestine clearances by the appellants to M/s SCEL, supported by statements from authorized signatories and directors of the involved units. The Tribunal dismissed the argument for further cross-examination, as it had been allowed previously, and upheld the impugned order, concluding that the clandestine removal was established based on the accepted statements and documents.

5. Consequently, the Tribunal dismissed all appeals, affirming the demand for duty payment and penalties related to the alleged clandestine removal of goods without payment of excise duty. The decision was pronounced in open court on 16.07.2019.