9911796707
TMI Blog2010 (10) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... d with each other and arising out of common cause are dealt by this common order for disposal. Direction of apex court : 2. While remanding the matter, Hon'ble Supreme Court noticed that Tribunal in its order dated 21-3-2001 had not dealt the question of flow back nor had also taken note of finding recorded by the Collector of Central Excise on such issue, while there was an allegation of the same in the Show Cause Notice. Similarly, the finding on limitation recorded by the Tribunal was not satisfactory to the Apex Court for which a detailed finding by Tribunal was called for. With such observations, the Apex Court required the Tribunal to decide the matter afresh in accordance with law keeping in view the observations made by the order reported as above. While directing so, the Hon'ble Court also clearly expressed its opinion that nothing stated in the order shall be taken as expression of opinion on the merits of the dispute for which all contentions were left open. Background of investigation : 3. The appellant "NETCO" in Appeal Case No. E/154/88-A was manufacturing specified brands of cigarettes on behalf of the appellant "GTC" in Appeal Case No. E/153/88-A under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Virginia". Samples were drawn on 6-8-85 from the market in respect of "Panama" brand manufactured by NETCO and similar such brand manufactured by all connected concerns of GTC at its different factories located in various places. Chemical examination of these goods virtually showed in terms of report dated 17-9-1985 of Central Excise Laboratory, Kolkata that there was no difference in the quality of the brands of all such goods. Accordingly, Revenue was of the opinion that there was no difference between two brands i.e. 'Panama Viriginia G' manufactured by NETCO and 'Panama Virigina (Special), manufactured by GTC in its various factories. But there was only difference in the printing of the word. 'Special' and the word 'G'. 3.3 It was further noticed by Investigation that in Shillong cigarettes of aforesaid brand were sold at different prices and market enquiry from retailer showed that higher sale price was collected by GTC against the price embossed by cigarette packets. GTC was marketing the product manufactured by the NETCO and sale price over and above the price embossed on the packets were collected by that appellant from the wholesale buyers and such higher sales proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia), Muzaffarpur, M/s. Golden Agency, Gaya and M/s. Smart Commercial (P) Ltd., Calcutta reportedly termed as whole sale buyer of the said goods were selling the said goods to different dealers at the rates other than declared rate to Central Excise Department. (e) The dealers were selling the said goods to the retailers through different salesmen appointed/employed by GTC in the north east region @ 2.60. (f) Higher sales price were collected from the retailers through the salesmen of the dealers and such money was transmitted to GTC deducting therefrom the expenditure incurred for the establishment like salary of the salesmen, transport, trunkcall, etc., keeping sale price of quantity of goods supplied calculated at the declared sale price. Dealers were submitting statement of expenditure to M/s. Smart Commercial Co., Gauhati, i.e. The extra realisations were remitted either by cash through special messenger or by Demand Drafts/Cheques, in fictitious address and name. (g) GTC was realising some amount, in the name of interest @ 27% on the amount outstanding dues from their whole sale buyers. (h) The cigarettes in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or which extended period was invocable under relevant provisions of Section 11A of Central Excises and Salt Act, 1944. (o) Extended period of limitation, i.e. 5 years was applicable as GTC resorted to suppression of facts and misstatement in the matter of marking of correct price on packets for retail sale which was done by NETCO in complicity with GTC. (p) The duty evaded was recoverable from NETCO or GTC under rule 9(2) of the Central Excise Rules read with Section 11A of the Central Excises and Salt Act, 1944 and the penalty leviable on each clearances under Rules 9(2), 210 and 226 of the Central Excise Rules. 4.2 The appellants without furnishing reply to the show cause notice delayed the process of adjudication on some pretext or other like non-supply of documents, cross-examination not allowed and no return of unrelied documents made. Adjudication : 5. While the adjudicating authority allowed several opportunities to the appellants to file their reply to SCN as depicted in paras 4 to 4.38 of the order-in-original, dilatory tactics was adopted by the appellants in the aforesaid manner to avoid adjudication. However, learned Adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipt and that was not brought to accounts. Bank drafts were made to remit such excess price deducting expenses incurred and the source of bank draft and reference of banks came to light. Remittances were made through bank draft in the name of different persons and such money had flown to GTC. Similar such finding also appeared in para 5.15.6 at page 77 to page 87 under different paragraphs. The recorded statement examined by the Authority brought to record shows that there was realisation of excess sale price and the price marked on the packets were lower than the actual price realised from sale of cigarettes. Price was embossed on cigarette packets instead of the same being printed on the packets. Such practice was found to be dubious and that comes out from para 5.15.11 of the order-in-original at page 83. Correspondences gathered in the course of search were subject matter of examination under para 5.15.12 and that showed that there was realisation of the higher sale price which had flown back to GTC through unaccounted deals as above through its conduits. Examining the material facts with the evidence before the learned Adjudicating Authority, in para 5.15.13 at page 87, that Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of GTC. NETCO was not an independent manufacturer. It was dependent upon GTC for raw material to be used in manufacture of cigarettes by it and for marking the retail sale price on packets which was claimed to be basis for levy. Role of GTC in deciding the marked price and thereafter managing sale as well as distribution of goods also contributed for determination of liability. Accordingly, he held that GTC cannot be absolved from the responsibility of ensuring that NETCO should discharge proper duty liability and until the duty so realisable is paid by NETCO following prescribed procedure of Central Excise, GTC should also be liable. 8.2 The retail sale price having been marked by NETCO under instructions of GTC, duty was paid by NETCO on the adjusted sale price as worked out by GTC. When excess realisation of the sale price was established proving that the price marked on the packets was not genuine, GTC was mainly responsible for the evasion of duty. NETCO having paid the duty on the price embossed on the packets, GTC was liable for the excess sale proceeds realised. There was deliberate and wilfully designed scheme to evade duty for which the Id. Adjudicating A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Asthana and Mrs. Nisha Bagchi. On the first issue framed by the learned Adjudicating Authority at page 73 of the order of adjudication, Mrs Bagchi submitted that the same issue was composed of three sub-issues. Those are exhibited by pages 73-76 of the order of adjudication. She explained that the marketing distribution pattern in relation to goods of GTC was chain distribution comprising whole sellers and retailer. The names of distributors appear at page 74 of the order of adjudication. She submitted that GTC was appointing distributors and distributors were appointing whole sellers. The retailers were taking goods from the whole sellers. She drew attention to the relied upon documents (page 1 in a folder submitted in the course of hearing) where one Shri Lakshmipat Ghorawat was stated to have been appointed as whole seller by GTC was submitted to be not correct. According to her, that person, was proprietor of the business concern M/s. Business Distribution Centre and that comes under the distributor of M/s. Samrat Commercial Pvt. Ltd., who was a distributor. Her submission was that at no point of time, NETCO had appointed distributor or whole sellers or having any control ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preliminary objection all along. The Statements recorded under duress, coercion and threat do not lend support to the case of Revenue. Ld. ASG appearing for Revenue seriously objected to such plea of duress, threat and coercion submitting that authorities have authenticated the statements recorded fairly for which the allegations are baseless and there was no retraction of evidence forthwith made or attention of higher authority was invited if such allegation had substance. Therefore according to him such pleadings of appellants are devoid of merit. 11.6 Mrs. Bagchi drew attention to page 146 and submitted that Revenue required the appellant to file affidavit in respect of statement of 15 persons appearing in that page. Cross-examination was all along being prayed by the appellant in respect of four persons appearing at page 141 of appeal folder. But that was not allowed. Statement was recorded by Revenue from those persons and used against the appellant. Similarly she submitted that the statement was recorded from 10 retailers who had no existence nor cross-examination allowed. She referred to pages 150 and 151/209 and 208 of the appeal folder. Drawing attention to page 153/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to Ground No. (d) of appeal memo appearing at page 79/281 of the appeal folder where violation of natural justice was specifically pleaded before Tribunal. At this juncture, ld. ASG submitted that natural justice question does not arise at this fag end when Hon'ble Supreme Court has directed the Tribunal to decide on three specific issues i.e. (a) flow back (b) limitation and (c) determination of liability. Such contention of Revenue was objected by the appellant's Counsel submitting that natural justice goes to the root of the matter. 11.10 Learned Counsel for appellant invited attention to page No. 83/276 to deal with the issue No. 1 framed by learned Adjudicating authority submitting that such issue comprised 3 sub-issues appearing at pages 80/276 and 279 of the appeal folder. She submitted that the question of natural justice is an essential ingredient to decide the issue of flow-back. Any conclusion drawn violating principles of natural justice relying upon the documents gathered by Revenue against the appellant without being tested by cross-examination shall result in denial of justice. Drawing attention to pages 91 to 104 of the compilation filed by the appellant she ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; Signature of Mr. Vinod Kumar that was collected by Revenue in the statement recorded at pages 64, 65, 66 and 67 are mere initials, while a different signature appears in page 67A, Signature of Mr. Vinod Kumar is found to be different at pages 68 to 72. The date recorded at page 64 is 13-9-85 but not 17-9-85. 14 chits that were recovered in the course of search was subject matter of pages 68 to 72 and do not self explain the contents thereof for use against the appellants. (3) The price recorded in all the documents does not suggest that any extra sales price was realized by Sagar India with whom Mr. Vinod Kumar was working as Manager. The invoice price and the sale price do not throw any light as to realisation of any extra money. These chits also do not show any payment made to GTC. (4) Panama Cigarette was not found in stock at the time of search. No Panchnama was prepared by search party to conduct search on 17-9-85. 11.13 Mrs. Bagchi categorically submitted that when cross-examination of Mr. Vinod Kumar was called for to test the authenticity of the above said documents, Revenue did not allow cross-examination. Sever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 16 that he has stated that extra amounts were charged on the verbal instruction of M/s. Golden Tobacco Company Ltd. (GTC) and that was remitted in cash not being accounted for. He categorically stated that the extra amount charged was remitted to GTC. through special messenger. We have found in answer to question No. 19 at page 76 of compilation that he has stated that he was submitting report to GTC Kolkata. This brought GTC to the chain of evidence and its questionable modus operandi came to light. 11.16 Ld. Counsel for appellants submitted that Mr. Vinod Kumar knows Hindi. His statement at pages 73-76 was recorded in English. Although that was read by Mr. Vinod Kumar, the English version was not his version. She drew attention to the observation of the ld. Commissioner in the adjudication order and submitted that nothing has been spelt out in that order against the appellant NETCO. 11.17 On the issue of flow back, learned Counsel Ms. Nisha Bagchi submitted that there was no flow back of funds from dealers at grass root to GTC Industries. She invited attention to para 5.15.06 of the order of adjudication to submit that demand draft which was alleged to be instr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing paragraph 5.15.10 at page 82 of order of adjudication, she submitted that there was neither deliberate marking of lower price nor an attempt was made by the appellants to realize any excess price than that was meant for charging. Supporting such argument, Shri Asthana, learned counsel for appellants submitted that marking of price has no relevance in view of judgment of Hon'ble Supreme Court in the case of ITC Ltd. v. CCE, New Delhi - 2004 (171) E.L.T. 433 (S.C.). The notified goods under package were subjected to price mentioned therein. 11.19 Such averments of appellants was opposed by Shri Parasaran, learned Additional Solicitor General for Revenue submitting that entire arguments of the appellant as aforesaid were made in the writ petition of the appellants filed before Hon'ble High Court of Delhi and Hon'ble High Court of Gauhati, which were lost by them. They are again making an attempt for reappraisal of evidence without submitting a reply to show cause notice to Revenue. Therefore, their submissions are devoid of merit. 11.20 Learned Counsel Shri Asthana reiterated that no opportunity of cross-examination being granted, the proceeding has become fatal. In su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustrial Development Corporation Ltd. and 49% by GTC. He submitted that manufacturer of cigarette was under physical control and the appellants were subject to the Notification No. 211/83-C.E., dated 4-8-83 and as amended from time to time as well as Notification No. 201/85-C.E., dated 2-9-85. It was also his submission that when the package of the goods itself was well known to the Department prescribing the maximum sale price therein there cannot be any presumption that over and above such price, anything extra was realised to send to GTC through any circuit. He further brought to our notice that the sale price when quoted on the package itself that was the basis for the levy in terms of the Notification. When this is the intention of levy, Revenue has no scope to further inquire as to what was the sale price realised by the appellant. Realisation of sale price not being basis or event of levy, the marking of the sale price is of significance for law. Therefore, Revenue should not construe the things for its own convenience. Finally, he submitted that entire operation of NETCO being within the knowledge of Revenue, there cannot be any allegation as to escapement of duty liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional amount representing the price difference was collected in cash or bank draft in the name of some persons and bank account operated by such persons to enjoy benefit of extra price. The sale proceed went to GTC deducting charges for services and that is established by para 59. Relying on the last sentence appearing at page 202 of the paper book he submitted that Tribunal held that GTC adopted illegal modus operandi of printing lower price on packets of certain brands while actual sale price realised was higher than the printed price for which invoking of extended period of limitation was held to be proper. 12.4 Shri Parasaran relied on paras 51, 53, 55, 57, 58 and 59 of aforesaid order of Tribunal to submit that GTC had designed its illegal and masterminded operations in different parts of the country through different agencies and entities to cause evasion of Revenue through various conduits and that was established by search result. One Mr. Ghorawat who was witness in GTC's case in Bombay also appears in the present appeal of NETCO. Tribunal has found that the said witness has established material facts from the statement recorded from him in favour of Revenue. 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies located throughout country conducting operations through job worker was evasive and serious loss was caused to Revenue prejudicing its interest. 12.8 The show-cause notice was issued in the case of NETCO on 24-2-86. The dilatory tactics followed by GTC in Bombay/Baroda jurisdiction was also followed in the present appeal, pleading that copies of documents were not provided, non-relied documents were not returned back, cross-examinations were not allowed. There was deliberate delay caused by GTC and NETCO to find fault with adjudication at a late date with these pleas baselessly. When opportunity after opportunity was allowed to file final reply, the appellants seeking adjournment from time to time delayed adjudication and did not file final reply to show cause notice. The manner of grant of fair opportunity of hearing apparent from adjudication order, discards the allegation of violation of natural justice which is proved from different sub-paragraphs of order-in-original. When the appellant did not file replies to show-cause notice, cross-examination sought was uncalled for being premature and unwarranted in absence of explanation or defence led by reply to Show Cause No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income-tax order passed in writ petition No. 707 of 1995 M/s. GTC v. Income Tax Appellate Tribunal & Others. Since the documents came up at a later stage before us after hearing the appellants, we require ld. ASG to clarify whether these documents were before the authorities and whether those are additional documents and whether considerable by us, if such documents go to the root of the matter and having evidentiary value. Ld. ASG's reply was that these documents do not come to rescue of appellants. 12.11 Ld. ASG Shri Parasaran supported his pleadings through decisions of higher Courts in the case of M/s. Kanungo & Co. v. Collector Customs - 1973 (2) SCC438 = 1983 (13) E.L.T. 1486 (S.C.) submitting that denial of cross-examination has not made the entire proceeding fatal and that has also not resulted with violation of natural justice. According to ld. ASG, statements recorded under Section 14 of the Central Excise Act, 1944 have lend credence to the case of Revenue being recorded in the course of judicial proceeding and all the judgments deciding the principles of law relating to cross-examination come to rescue of Revenue. He brought out that there was search conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extra money was realised in respect of sale of impugned goods and that was passed on by Shri Ghorawat to GTC at the instance/instruction of Shri P.K. Chatterjee who was Manager of GTC. Relying on page 35 of the paper book (R-2), ld. ASG submitted that illegal operations were conducted by GTC through premeditated design. Similarly evidence gathered proved that Shri Singh, Accountant of Patna explained that there was flow back through notes appearing at pages 128 and 129 of the paper book (R-2). Relying the evidence on record, ld. Adjudicating authority in pages 77 to 87 (279 to 289) brought out the manner how flow back was made from different quarters to GTC. 12.13 With the aforesaid submissions and also relying on the decision of the Tribunal relating to Bombay/Baroda jurisdiction, ld. ASG submitted that case of the present appellant is full proof case of flow back since search was done to all the premises and material recovered proved the same. The proceeding having been culminated from the result of the common search, these appeals fail. 12.14 Ld. ASG Shri Parasaran further argued that NETCO was manufacturing deceptively similar goods as that of GTC. He drew our atten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him, in view of all the evidence available on record, GTC cannot deny its liability even if NETCO is made liable by order of adjudication. This he says relying on para 10.2 of the order of adjudication depicting the order of recovery from both the two appellants. 12.16 Shri Parasaran argued on limitation issue submitting that the fraud, collusion and suppression made by both the appellants taking shelter of Notification No. 211/83 dated 4-11-83 and No. 100/85 dated 22-3-85 brought the appellant to the purview of extended period of limitation. He referred to page 239 and page 249 of appeal folder where these two notifications appear. According to Revenue, the appellant is not entitled to the notification benefit. When the appellant had oblique motive and various circumstantial evidence proved their modus operandi of de-frauding Revenue to cause evasion of duty that brought the appellant to purview of proviso to Section 11A of Central Excise Act, 1944. That clearly brought the appellant to the extended period following various decisions of the Apex Court. To cite a few, he referred to the following decisions :- 1. 1995 (84) SCC 50 [sic] 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmity thereof was challenged before Court. The search and seizure operations were authorised by competent authority and competency of the Authority remained unchallenged. Pursuant to authorization, search was conducted. Authorities had reasonable belief that the appellants were manufacturing deceptively similar cigarettes without any difference in quality between the original/regular brand manufactured by GTC in its factories and in different parts of the country through its job workers and such deceptively similar cigarettes resembling with the original/regular brands. There was undervaluation of "adjusted sale price" of cigarettes of deceptively similar cigarettes which was determinable with reference to the Maximum Retail Price (MRP) mentioned in the cigarette packets. Such MRP without being printed on the cigarette packets as required by law was embossed. The MRP embossed on cigarette packets were hardly visible. Taking advantage of such situation the appellants were realising sale price from brand loyal consumers over and above the MRP declared on the cigarette packets since consumers were unaware of the dubious practice adopted by appellants. In the circumstances, there ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity to take a definite determinative stand as a response to the conduct of the former either by words or letter. It has been held by Apex Court in the case of Commissioner of Customs, Kandla v. Essar Oil Ltd - 2004 (172) E.L.T. 433 (S.C.) that "fraud" is meant an intention to deceive; whether it is from any expectation of advantage to the party himself or from the ill will towards the other is immaterial. The expression "fraud" involves two elements, deceit and injury to the deceived. Undue advantage obtained by the deceiver, will almost always call loss or detriment to the deceived. Similarly a "fraud" is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage. (See S.P. Changalvaraya Naidu v. Jagannath [1994 (1) SCC 1]. 16.3 Adjudication was done following due process of law on the basis of evidence establishing loss of revenue caused by the appellants undervaluing "adjusted sale price" determinable with reference to MRP. When chemical examination report dated 17-9-1985 established that there was no difference in quality bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated that the Authority below merely acted on imagination while the adjudication was based on cogent evidence, the plea of time-bar becomes unsustainable. Duty liability under law is bound to be fastened including penalty that shall be leviable. In the leading English case i.e. Derry and Ors. v. Peek, 1886-90 All ER 1 (All ER p. 22 B-C) what constitutes "fraud" was described thus: "fraud" is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless whether it be considered by Apex Court in true or false". This aspect of the matter has been dealt in Roshan Deen v. Preeti Lal [2002 (1) SCC 100], Ram Preeti Yadav v. U.P. Board of High School and Intermediate Education [2003 (8) SCC 311], Ram Chandra Singh's case (supra) and Ashok Leyland Ltd. v. State of T.N. and Another [2004 3 SCC 1]. Suppression of a material amounts to fraud on the court - see : Gowrishankar v. Joshi Amha Shankar Family Trust, [1996 (3) SCC 310] and S.P. Chengalvaraya Naidu's case AIR-1994 SC-853. Utility and relevancy attributable to conscious possession proving realisation of higher sales price and flow back thereof : 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price over and above MRP declared. Series of bank drafts were made in the name of fictitious persons to transmit the ill gain to GTC. Active role of GTC in such activities were well established by series of evidence as has been discussed by the learned Adjudicating Authority in his order. It is well known, that it is very difficult for Revenue, to prove every link, in respect of the commission of the offence under the Act by direct evidence. The whole process of evasion consisted different links. The links aided and abetted each other through remote control by GTC. Probability of guilt intention became undeniable and no materials were produced on behalf of the appellant to discharge such burden. The nature of proof available on record established the charge for the offence brought out by Show Cause Notice. Requisite guilty knowledge was established by circumstantial evidence as well as totality of facts and circumstances. Evidence gathered by Revenue was enough to raise a presumption of relevancy and utility of incriminating materials exhibiting guilt intention of the appellants who were involved in evasion of duty possessing and explaining contents of materials. 17.1 Entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lization of higher price as has been argued by learned ASG. Although the appellant tried to assail the allegations in show cause notice filing certain statements of few retailers, they failed to produce them and demolished their own stand. This comes out from Para 5.6 at Page 66 of Order-in-Original. Various statements recorded by Investigation brought inextricable link of goods with higher sale price realised through various conduits and bank evidence gathered proved routing of such price through different channels proving flow back to GTC. Exclusive control of GTC on the marketing of goods was sufficient enough to view that it was beneficiary of result of realisation of higher sales price and assessable value was determinable with reference to sale price realised. Natural justice : 19. Law is settled beyond doubt that the strict principles of the Evidence Act do not apply to an assessment proceeding. The materials gathered against the assessee were disclosed through show cause notice and were utilised against the assessee in assessment. The assessees were expected to meet such adverse material and thereby save themselves from any adverse assessment. This in fact is a well- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . That unambiguously explained modus operandi of appellants without ruling out their association with the deposition. The versions in the statements directly related to the governance of the business of the appellants and such nexus proved by chain of evidence gathered by Revenue. If any person associated with a trade or goods explains about the same unambiguously, his statement is reliable being creditworthy. That was based on cogent evidence but not on any assumption or suspicion. Revenue has successfully contradicted pleading of appellants. Involvement of appellant in evasion of duty adopting premeditated design realizing higher sale price than the price embossed on the cigarette packets was established. In extricable links of versions in the recorded statement failed to dissociate the appellants from the grave of offence. Accordingly the materials recovered in the course of search and statements recorded by Revenue lead to irresistible conclusion that unfair practice was adopted by the appellants for their unjust enrichment at the cost of Revenue. The concepts of probability, and the degrees of it, cannot obviously be expressed in terms of units to be mathematically enumerated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar issue in the case of Gyan Chand Sant Lal Jain v. UOI, reported in 2001 (136) E.L.T. 9 (Bom.) and taking into consideration the applicability of concept of principles of natural justice in that regard quoted para 76 of Halsbury's Law of England, Vol. I (4th Edition) which reads thus :- "Natural justice does not impose on administrative and domestic tribunals a duty to observe all the technical rules of evidence applicable to proceedings before courts of law. Members of tribunals may be entitled to draw on their specialized or local knowledge of the type of, issue before them in order to supplement as well as evaluate evidence to find facts by inquisitorial methods, and inspections and to obtain information from other persons; but it will generally be a denial of justice to fail to disclose to a party specific material relevant to the decision if he is thereby deprived of any opportunity of comment on it." [Emphasis supplied] The Hon'ble High Court observed thus :- "In other words, it seems to be a fairly settled position in law that it is not necessary that persons whose statements have been previously recorded must be examined in the presence of the party against whom such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olation of principles of natural justice. Appellant's prayer for cross-examination was devoid of merit when ample evidence on record demonstrated dubious practice adopted by them causing loss of Revenue. The deponents by their versions corroborated deals of realisation of higher sales price. It is well-settled that the effect of an alleged admission depends upon the circumstances in which it was made. An admission is the best evidence that an opposing party can rely upon, and though not conclusive, is decisive of the matter, unless successfully withdrawn or proved erroneous. This is so because an admission by a party is substantive evidence of the fact admitted, and admissions duly proved are admissible evidence irrespective whether the party making them appeared in the witness box or not and whether that party when appearing as witness was confronted with those statements in case it made a statement contrary to those admissions. An admission, if clearly and unequivocally made, is the best evidence against the party making it and though not conclusive, shifts the onus on to the maker on the principle that "what a party himself admits to be true may reasonably be presumed to be so a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dard of proof in a civil case is preponderance of probabilities. In a civil case there is no burden cast on any party similar to the one in a criminal proceeding. Following the ratio laid down in CIT v. Durga Prasad More, 82 ITR 540, 546-47 (S.C.) it may be said that science has not yet invented any instrument to test the reliability of the evidence placed before a Court or a Tribunal. Therefore, the courts and Tribunals have to judge the evidence before them by applying the test of human probabilities. Human minds may differ as to reliability of a piece of evidence. But in that sphere the decision of the final fact finding Authority is made conclusive by law. The normal rule which governs civil proceedings is that a fact can be said to be established if it is proved by a preponderance of probabilities. A fact is said to be proved when the court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case to act upon the supposition that it exists. The belief regarding the existence of a fact may thus be founded on a balance of probabilities. A prudent man faced with conflicting probabilities concerning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the rate of duty was to be determined. Citations made by parties : 25. Ld. Counsel for appellants relied on the judgment of GTC Industries Ltd. v. Union of India - 1991 (56) E.L.T. 29 (Bom.) in support of his argument for opportunity of cross-examination. There is no quarrel that cross-examination is an accepted principle of natural justice. But the prayer of the appellant for cross-examination was without filing reply to SCN, which we have indicated aforesaid bringing out that the appellant filed reply to SCN only after the adjudication was completed. We have also gone through the decision cited by Shri Asthana in the case of Rungta Sons Pvt. Ltd. - 1986 (23) E.L.T. 14 (Cal.), Arya Abhushan Bhandar - 2002 (143) E.L.T. 25 (S.C.) and Swadeshi Polytex - 2000 (122) E.L.T. 641 (S.C.). We are in full agreement with the ratio laid down to follow natural justice granting cross examination. We have stated aforesaid that there was adequate evidence to appreciate case of Revenue, weighing heavier in their favour and against the appellants as discussed by the ld. Adjudicating authority in detail and stated by us in the preceding paragraphs. When the appellants failed to come out with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid by Revenue and exposed to appellants through the SCN. The chemical examination report remains uncontroverted. Also his reliance was on the proposition that the witnesses who corroborated the case of Revenue should not be produced for examination when the appellants failed to file reply to SCN. We do appreciate from para-12 of the judgment of Apex Court that the principles of natural justice do not require in matters like this the persons who have given deposition bringing direct nexus of the appellants to their modus operandi should be examined in the presence of the appellants or should be allowed to be cross-examined by them on the statements made before the Excise Authorities. 26.2 Materials on record showed that there was no breach of natural justice. The SCN clearly depicted all the materials on which Excise authorities had relied to call for reply of appellants. When opportunity was given to reply on the specific charges levelled by the SCN, without filing a reply to that, the appellants have no right to insist for cross-examination since the adjudicating authority was all along deprived to come to a conclusion whether cross-examination was warranted. To say so, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he cost of Revenue controlling the MRP and realised sale proceeds over and above the MRP declared. Determination of liability : 28. We have gone through the decision of the Apex Court in the case of Empire Industries Ltd. - 1985 (20) E.L.T. 179 (S.C.) as well as the judgment in Ujjagar Prints - 1988 (38) E.L.T. 535 (S.C.). We do appreciate that manufacture is the event of levy and ownership of goods does not decide taxability under Central Excise Act, 1944. Learned counsel's argument on behalf of the appellant that the duty, liability was in respect of goods manufactured by NETCO has considerable force. 29. Ld. ASG in support of his contention that GTC & NETCO are liable relied on the decision of the Tribunal delivered on 3-3-97. According to him, GTC shall also liable when the similar appeal of the GTC was dismissed in terms of the Tribunal's order above. We appreciate that it is left open to the department to find out the mode of recovery of liability in accordance with law. But determination of liability depends on the event of levy which is manufacture following Apex Court's decision in Empire Industry (supra). The event of levy being manufacture, liability s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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