2024 (3) TMI 555 - AT - Central Excise

Clandestine removal of mild steel (MS) bars - denial of cross examination of witnesses - admissibility of documents retrieved from computer without authentication - Demand confirmed based on certain records recovered from other parties and sought to be backed by statements of customers and transporters - violation of principles of natural justice - HELD THAT - It is found from the records that the confirmation of demand on goods allegedly cleared clandestinely has been based on certain records recovered from other parties and sought to be backed by statements of customers and transporters. No evidence as forthcoming of any other material records of physical clearance or of any recovery of sale proceeds. The request for cross-examination had been declined without assigning any reasons or even considering the mandate of section 9D of Central Excise Act, 1944. The sole evidence is records of other parties and linking of the appellant with those has been attempted through statements that were not tested in cross-examination despite requests from the appellant. No corroborative evidence of any kind appears to have been brought forth either. With almost a decade having been elapsed after the proceedings, it would be impossible to establish relevancy of the documents in terms of section 9D of Central Excise Act, 1944 leaving the conclusions therefrom to be inadmissible. There is no merit in the conclusion of the adjudicating authority - the impugned order set aside - appeal allowed.

Summary

Issues Involved:
- Challenge to order of Commissioner of Central Excise and Service Tax charging duty, interest, and penalties under Central Excise Act, 1944 for alleged clandestine removal of 'mild steel (MS) bars' between specific dates.

Summary:
The three appellants challenged the order of the Commissioner of Central Excise and Service Tax, Aurangabad, which imposed duty, interest, and penalties under the Central Excise Act, 1944, for alleged clandestine removal of 'mild steel (MS) bars' between 1st April 2008 and 23rd March 2011. The main dispute centered around the denial of cross-examination of witnesses and the credibility of inferences drawn from a 'computer printout' of a ledger recovered from another party. The appellants argued that documents retrieved from a computer without authentication are inadmissible as settled by previous court decisions. The Authorized Representative contended that statements of customers and transporters, along with computer records, established the clandestine clearance by the assessee. The confirmation of demand was based on records recovered from other parties and statements of customers and transporters, without evidence of physical clearance or recovery of sale proceeds. The appellants also highlighted the refusal of cross-examination without reasons, violating principles of natural justice and rendering the findings questionable.

The adjudicating authority's reliance on untested statements and lack of corroborative evidence, coupled with the inability to establish the relevancy of documents after a significant time lapse, led to the conclusion that the impugned order lacked merit. The appeals were allowed, and the impugned order was set aside.