9911796707
TMI Blog2000 (12) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... they were manufacturing 2100 dozen per day and they had not taken Central Excise licence nor filed declaration nor possessed SSI certificate. They were not maintaining any stock book, ledger or any account books except bill books issued for smaller quantity of detergent soaps. Sri Mohanraj stated that major quantity of detergent soaps manufactured were cleared from the factory without any bill or accounts. An auto bearing registration No. TAR 4362 was loaded with 162 dozen of detergent cakes without any bill or account and the same was seized by the officers under mahazar. It was also noticed that 2373 dozen of detergent cakes valued at Rs. 24,745/- were manufactured and kept ready for removal without payment of duty. 3. Statements of Sri Mohanraj and that of Sri Suyaraj were recorded, who admitted about the manufacture and clearances of the item in question to the extent already stated. It was further stated that one Sri S. Subbiah is a local commission agent and a main seller of the detergent cakes in Coimbatore and used to sell 750 to 850 dozen per day in the said seized auto and the bill prepared was only for 30 to 35 dozens and the balance quantity was cleared without bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded on the alleged clearances under Rules 9(1), 52A, 53, 173B, 173C, 173G, 174 and 226 of Central Excise Rules, 1944. An addendum show-cause notice was also issued proposing recovery of Rs. 26,365/- BED and Rs. 1,318.20 SED for the period from 1-1-1990 to 6-3-1990. Further a corrigendum was also issued on 20th September, 1990 to substitute Rs. 3,69,357.25 BED and Rs. 18,467.86 SED for the figures of Rs. 26,365/- BED and Rs. 1,318.20 SED. Sri D. Suyaraj sent a letter dated 1-2-1991 challenging the correctness of the entries made in the personal diary seized by the department and sought for following decisions :- (i) Whether the writings appearing on the diary were written on a single day or over a period one and half years; (ii) Whether all the above writings were written with same pen or different pen; (iii) The writings appearing on each page had been entered on the same occasion or at different occasions. The department accepted the request and sent the diary to handwriting experts of Tamil Nadu Forensic Science Laboratory, Madras to carry out the said tests. The said laboratory informed that opinion regarding the age and exact time of writing by ball point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on as to how the quantification of Rs. 23,73,837.64 has been arrived at and there is no analysis of evidence as noted earlier. 5. The appellant in the present appeal has seriously challenged on the following grounds that the order impugned is not a speaking order : (a) that the statements of Sri Suyaraj and others were recorded by duress, threat and coercion. (b) Rs. 75,000/- was not deposited voluntarily and the same was challenged before the High Court of Madras in the said Writ Petition and the said plea was accepted in the Writ appeal and the matter was disposed of with a direction to the adjudicating authority to take into consideration this plea raised by the appellant. (c) It was stated that diary was also incomplete and there is nothing in the diary to indicate that the appellants have funds or had such sufficient funds for manufacturing and supplying from two places to various dealers. (d) It was pleaded that there was no complete and sufficient investigation with regard to the purchase of inputs for manufacture according to the allegations made and there was no sale to the extent indicated and the duty had not been correctly computed. (e) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e number of judgments. He relied upon the following judgments :- (a) He relied on the judgment of Swadeshi Polytex Ltd. v. CCE, Meerut, [2000 (122) E.L.T. 641 (S.C.)] wherein the Hon ble Apex Court had clearly laid down that where the Commissioner s reliance on statement of any witnesses, then the appellants should be given an opportunity of cross-examination. (b) In the case of S. Saleem Khan v. The Deputy Director, Enforcement Directorate, Madras Another as reported in 1985 (5) ECC 146, wherein the Madras High Court has held that retracted statement cannot be the only basis for proving the charges. It has also been held that on the basis of facts that apart from the statement of the appellant dated 25-10-1979, there was no other evidence on which the authorities could have relied on in finding him guilty. The Court further observed that statement was retracted and though there was enough scope for a detailed inquiry and proving that the retraction was not justified, the department did not take any step to prove that the statement originally given by the appellant was true. The burden was on the department to prove the contravention of the provisions of the Act. In s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be granted an opportunity to cross-examine the third parties. It is held that the assessments made without allowing an opportunity are liable to be set aside. Learned senior counsel emphasized that the above ratio laid down by the High Court clearly indicates that non-grant of opportunity to cross-examine the various third parties in the present case and not recording the reasons for not giving such an opportunity would make the order impugned unsustainable. (e) In the case of C.T.O. v. Kewalram Sumnomal Cavanduspur as reported in 1994 (92) STC 629, the Rajasthan High Court has laid down the law that the tax authorities should carry out inquiry with regard to the default as laid down under the provisions of law and if there is a failure thereto, then the order is bad, unless admission of guilt has been made by the dealer. 8. Learned senior counsel pointed out to the entire evidence on record and the findings of the Commissioner and submits that the order is not in consonance with the law laid down and there is a clear violation of principles of natural justice and as sufficient time has lapsed, therefore, instead of remanding the matter the appeal itself should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave compelled him to admit or pay the amounts on his behalf. Therefore, he submits that it is not a case for setting aside the order impugned or for remanding the matter for re-consideration as considerable time has been lapsed in the matter. 10. We have carefully considered these submissions made by both sides and have perused the order passed by the Commissioner. As has been noted in the case and submissions already recorded (supra), the department has initially proceeded on the basis of the statement given by the appellant and his brother. Records were also seized including statements recorded from various persons. A diary was also recovered which shows some entries made on individual dates. There is also a deposit of Rs. 75,000/- made by the appellant. The question that arises for consideration is as to whether the said admissions recorded were voluntarily and whether the retraction of appellant that non-grant of opportunity to cross-examine the witness is sufficient to set aside the order impugned or in the alternative the Revenue s plea that statements of various persons including initial statement of the appellant and his brother, staff, driver etc. besides of diary and vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have examined the effect of the statements and merely writing in two paragraphs about the admission said to have been made by the appellant, without taking into effect of his retraction had made the order impugned unsustainable. The Commissioner ought to have recorded the reasons as to why he was proceeding with adjudication without calling witnesses for cross-examination as prayed by the appellant. The appellant had been asking adjournments and the Commissioner had also accepted the appellant s plea for sending diary for handwriting experts opinion. When the Commissioner has taken such a step, he ought to have given full opportunity to the appellants to cross-examine the witnesses. Although an argument has been raised by learned DR that adjudicating authority has a right to refuse to grant cross-examination, however such refusal is not absolute. The Commissioner has to examine the prayer in the light of the reliance made by department on such witnesses. If the statement of such witness is going to play a paramount role in the final decision, then their statements are required to be discussed in detail. The Commissioner has failed to give reasons as to why he has not given any op ..... 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