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TMI Blog2010 (3) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in clandestine production and clearance of its final products CTD bars and suppressed receipt of the raw materials, MS Ingots. After due process of law, the Commissioner passed the impugned order. The operative portion of the impugned order appears as follows :- ORDER (i) I confirm an amount of Rs. 2,37,956/- under proviso to sub-section (1) of Section 11A of Central Excise Act, 1944 and the amount is to be paid fort by M/s. SSPL. (ii) I confirm, an amount of Rs. 13,20,056/- under proviso to sub-section (1) of Section 11A of Central Excise Act, 1944 and the amount is to be paid forthwith by M/s. SSPL. The above amounts are to be appropriated from the amount of Rs. 25,00,000/- already paid by them towards the duty confirmed. (iii) I impose a penalty of Rs. 15,58,012/- under Section 11AC of Central Excise Act, 1644 on M/s. SSPL. (iv) I direct M/s. SSPL to pay interest on the amount of Rs. 15,58,012/- under Section 11AB of Central Excise Act at the rate applicable and for the period as prescribed under Section 11AB. (v) I impose penalty of Rs. 7,00,000/- (Rupees seven lakhs only) or Shri Suresh Kumar Singhal, under Rule 26 of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The Commissioner found that the proposals in respect of amounts at Sl. No. 2 3 were not established. As regards amounts at Sl. No. 1, the Commissioner found that details figuring in documents recovered from Shri Om Prakash Sharma, Supervisor in SSPL on 26-9-2003 during search of the factory premises showed details of receipt of MS ingots in the factory and clearances of CTD bars from the factory. The documents showed details of quantity, vehicle number, name of the supplier as regards raw material. Similar particulars were noted as regards the CTD bars cleared, such as customers name, vehicle number, quantity and contractors' name. Shri Om Prakash Sharma had stated that he had himself recorded the particulars on the document recovered and that the loading contractors' names and Shri Mansingh and Shri Haris names were noted as "M" and "H" respectively as per the directions of Shri Suresh Kumar Singhal, Managing Director and Shri Vijay Kumar Agarwal, Director of SSPL. During the proceedings Shri Om Prakash Sharma was not produced for cross-examination by SSPL. It was argued that the document was not proved and the statement of Shri Sharma lost its value as evidence as he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. It is no doubt true that in all cases, cross-examination need not be granted, but it all depends on the circumstances of each case. If the appellant had asked for cross-examination only for the purpose of dragging the proceedings or if the Collector comes to the conclusion that the cross-examination is not material, then by assigning sufficient reasons, he can reject the prayer. But, in this case, no such effort is made by the Collector to reject that prayer by assigning sufficient reasons. Therefore, this amounts to violation of natural justice. [para 12]". 5. The Commissioner noted that the instant investigation was initiated pursuant to a case of pilferage of electricity by SSPL booked by the Electricity Department involving an amount of Rs. 4.91 crores. The amount relating to the alleged theft stood reduced to Rs. 66 lakhs which could have been used for production of 96.73 MTs of CTD bars found to have been cleared on 26-9-2003 based on the document recovered from Shri Om Prakash Sharma supported by his statement. As regards the allegation of evasion to the tune of Rs. 13,20,056/-, the same was based on the documents recovered from the residential premises of one S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not concern myself with any offensive transactions. I am merely a broker giving information to dealers and manufacturers of CTD bars who interested to know market information regarding stocks available with the manufacturers. After giving the information, the parties to speak themselves with each other about the quantities, rate etc., and I do not know whether any quantities would be cleared by manufacturers and purchased by the dealers. That is to say except passing on the information I do not involve myself with any actual clearances. However only on the basis of the transactions conducted as evidenced from the manufacturers excise record I am given commission." 96. Vide his latter-dated 22-7-2005 Shri Rameswarlal Rathi stated that he had appeared for personal hearing nearly 3 to 4 times. But he was not called inside. This proves that the contention of the Counsel to the noticees is incorrect. The Counsel cannot say that Shri Rathi was not produced for cross-examination and the final reply was furnished without insisting upon the cross-examination of Shri Rathi." 6. He found that the retraction statements of S/Sh. Rameshwarlal Rathi and Ratan Gupta were afterthoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner was satisfied with the quantity of CTD bars allegedly manufactured clandestinely by SSPL could not have been manufactured with the quantity of electricity allegedly pilfered by SSPL, failed to appreciate the impossibility of the production found to have been cleared on 25/26-9-2003. The Commissioner found clearances by SSPL without payment of duty amounting to Rs. 2,37,856/- and Rs. 13,20,056/- without any challenging evidence. It was submitted that the impugned order deserved to be set aside. 8. During hearing, the ld. Counsel for the appellants relied upon various case laws to rely on their respective ratios as follows :- (1) T.G.L. Poshak Corporation v. CCE, Hyderabad [2002 (140) E.L.T. 187 (Tri.-Chennai)]. The Tribunal laid down that unless it produced evidence, which should be clinching, in the nature of purchase of inputs and sale of final products, demands cannot be confirmed based on some notebooks. (2) Ghodavat Pan Masala Products Ltd. v. CCE, Pune [2004 (175) E.L.T. 182 (Tri. - Mum.)]. It was held that when Department had based its case on the statements of certain parties and when the statements were retracted in writing by them, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those witnesses, could not be made basis for holding that the allegations against them as set out in the show cause notice, stood proved, by the Commissioner. That was, in fact, no evidence in the eyes of law which could be used against them. Therefore, the impugned order of the Commissioner being solely based on inadmissible evidence cannot be legally sustained. In Sharma Chemicals v. CCE, Calcutta-II [2001 (130) E.L.T. 271 (Tri. - Kolkata)] (supra) referred by the Counsel it had been ruled that denial of cross-examination of the person to whom the appellants denied their employee, amounted to violation of principles of natural justice and as such clandestine removal of the goods based on the entries in the note book recovered from that person did not stand proved. To the same effect is the proposition of law laid down by the Tribunal in Shalimar Agencies v. CCE, Kandla [2000 (120) E.L.T. 166 (Tribunal)] (supra) cited by the Counsel. 9.We have heard the ld. SDR for the Revenue. 10.We have carefully perused the case records and studied the rival submissions. We find that in his statement dated 26-7-2003 Shri Suresh Kumar Singhal, Managing Director of SSPL rendered the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lected true account of transactions in MS ingots and CTD bars cleared clandestinely by SSPL. Though the documents were recovered from Shri Om Prakash Sharma and employees of SSPL, its contents were accepted by the Managing Director of SSPL as correct. Therefore the evidentiary value of the above documents is not lost for the reason that the same could not be proved on cross-examination of Shri Om Prakash Sharma by SSPL. We also find that it may not be appropriate to call Shri Om praksh Sharma a 3rd party witness totally removed from the transactions of the assessee. The assessee is a person; its executives and respective employees cannot appropriately be labeled as 3rd party witnesses. In the facts of the case, it appears that the Commissioner rightly relied on the documents recovered from Shri Om Prakash Sharma to find illicit removals of CTD bars on 25/26-9-2003. Accordingly, we find that the demand of duty to the tune of Rs. 2,37,956/- as per proposal at Sl. No. 1 of the show cause notice is sustainable. Equal amount of penalty under Section 11AC is also sustainable. 12. As regards demand to the tune of Rs. 13,20,056/-, the only evidence available is in the form of docum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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