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2023 (12) TMI 565 - AT - Central ExciseClandestine removal - grant of opportunity to cross-examine - Relevancy of statements - Violation of the provisions of section 9D of the Central Excise Act, 1944 - non-compliance of the principles of natural justice - HELD THAT - The appellant has been given sufficient opportunity in terms of Section 9D of the Act and that is how, Sh. Ajay Singh, Advocate cross examined four witnesses and though opportunity was granted for cross examination of other witnesses but they did not avail the same. Thus no fault can be found with the order of the Adjudicating Authority on this ground. The learned Counsel for the appellant has pointed to decision in M/S ARYA FIBRES PVT. LTD., M/S NOVA PETROCHEMICALS LTD. AND OTHERS VERSUS CCE AHMEDABAD-II 2013 (11) TMI 626 - CESTAT AHMEDABAD , where the Tribunal held that rejection of request for cross examination of witnesses, whose statements were relied upon, amounts to violation of principles of natural justice. The said decision is clearly distinguishable as in that case the request for cross examination was rejected by the Adjudicating Authority on the reasoning that no justifiable and tangible reasons have been furnished for cross examination whereas in the present case on the request for cross examination of the witnesses on behalf of the appellant, the same was allowed, and the four witnesses, who appeared were cross examined. The appellant themselves are not certain about the goods seized from the four godowns and has therefore taken different and contradictory stand. The other limb of submissions is that the goods were seized earlier during the search in the month of April 2008 and were provisionally released on 4.6.2008, which were stored in the four godowns, which has now become the subject matter of the show cause notice - as recorded by the adjudicating authority that when the details of the seized goods with the details of the goods seized from various godowns of the appellant in the month of April 2008, were tallied, it was found that not a single entry was common in both the cases and the goods seized from the above mentioned four godowns were different from the goods that were seized from various godowns of the appellant in the month of April 2008 which were provisionally released by the department. Having rejected the contentions of the appellant and considering the seizure in the present case of large quantity of raw material, packing material ready to pack Gutka, also finished Gutka showing the names of various brands of other units and other inputs like Zarda, Lime, Cardamom, Katha, Tobacco, Menthol, Perfume, Clove oil etc. and some other material worth Rs.1,17,04,930/-, and packed Gutka of various brands, having a total MRP of Rs.48,90,854/- along with 1600 kgs. of loose Gutka having market value of Rs.12,00,000/-, I have no hesitation in upholding the findings that the appellant had indulged in clandestine manufacture and clearance of goods of various brands. The unaccounted gutka and stock of raw material was stored in these godowns without any documentation and any declaration in that regard, solely with intent to use the same for clandestine removal - It is a settled law that it is not necessary to establish mens-rea in tax matters as non compliance of statutory provisions is sufficient. The authorities below are justified in imposing penalty under the provisions of section 11 AC of the Act, relying on the decision of the Apex Court in the case of SEBI VERSUS SHRIRAM MUTUAL FUND 2006 (5) TMI 191 - SUPREME COURT that mens rea is not an essential element for imposing penalty. The impugned order holding that the excise duty amounting to Rs. 21,48,030/ is recoverable in terms of proviso to section 11A(1) along with interest under section 11AB and penalty under section 11AC of the Act and also the Gutkha seized from the four godowns is liable for confiscation needs to be affirmed. The appeal, is accordingly dismissed.
Issues Involved:
1. Violation of Section 9D of the Central Excise Act, 1944. 2. Compliance with principles of natural justice. 3. Opportunity for cross-examination of witnesses. 4. Evidence of clandestine manufacture and clearance. 5. Validity of seizure and confiscation of goods. Summary: 1. Violation of Section 9D of the Central Excise Act, 1944: The appellant argued that the provisions of Section 9D were violated, contending that statements used in adjudication proceedings must be established through cross-examination if requested. The Tribunal found that the appellant had been given sufficient opportunity for cross-examination, and the relevant witnesses were examined. The appellant failed to show any prejudice caused by the absence of cross-examination of certain witnesses. 2. Compliance with Principles of Natural Justice: The appellant repeatedly raised the issue of non-compliance with natural justice, leading to multiple remands. In the third round, the Adjudicating Authority granted ample opportunities for personal hearings and cross-examinations. The Tribunal found that the principles of natural justice were duly complied with, as the appellant was given reasonable opportunities to present their case. 3. Opportunity for Cross-Examination of Witnesses: The Tribunal noted that the appellant was allowed to cross-examine four out of six witnesses. The remaining witnesses did not avail the opportunity despite being granted. The Tribunal concluded that the Adjudicating Authority acted correctly and that the appellant's right to cross-examination was not violated. 4. Evidence of Clandestine Manufacture and Clearance: The Tribunal upheld the findings that the appellant was involved in clandestine manufacture and clearance of goods. The appellant's contradictory statements and failure to produce evidence to correlate the seized goods with previously released goods were noted. The Tribunal found that the seized goods were unaccounted for and stored without proper documentation, indicating intent to evade excise duty. 5. Validity of Seizure and Confiscation of Goods: The Tribunal affirmed the Adjudicating Authority's decision to confiscate the seized goods and recover excise duty along with interest and penalties. The Tribunal agreed that the appellant indulged in wilful suppression and fraud, justifying the penalties imposed under Section 11AC and interest under Section 11AA of the Central Excise Act. Conclusion: The appeal was dismissed, and the impugned order was affirmed, holding that the excise duty amounting to Rs. 21,48,030/- along with interest and penalties was recoverable, and the seized goods were liable for confiscation. The Tribunal found no fault with the Adjudicating Authority's compliance with natural justice and the opportunity for cross-examination. The appellant's involvement in clandestine activities was established, justifying the penalties and confiscation.
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