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TMI Blog2013 (9) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... to cross-examine - Such opportunity was denied to them - the main ground on which the adjudication order and first appellate orders were contested was denial of natural justice by denying cross-examination of persons whose statements were relied upon - during investigation stage the Appellants were not confronted with the evidences appearing against them - A statement was recorded without showing any evidence against them - During the statement the authorized signatory had confirmed that all the goods were received in the factory and payments to the suppliers were made by cheques. The reason for not allowing the cross-examination was not acceptable at all - An argument that at the time of recording the statement he was trustworthy but he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to supplies made to the First Appellant and a case of fraudulent credits availed was made against it. A show cause notice was issued and adjudicated which resulted in adverse consequences to the Appellants. Demands for duty were confirmed along with interest payable and penalties were imposed under various sections of the Central Excise Act and Central Excise Rules. 4. Aggrieved by this adjudication order, the Appellants filed appeal with Commissioner (Appeal) who rejected the Appeal. Aggrieved by the order of the first appellate authority the Appellants have filed these appeals. 5. The case against the Appellant is built on,- (i) the statement of Shri Rajesh Jain the proprietor of SI; (ii) the fact that many of the vehicle nu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dica Car, carried 4 consignments. 8. I note that the facts stated in para 4 of the SCN is a distorted translated re-production of the facts stated in the statement dated 2-4-2004 given by Shri Jain. The statement is to the effect that he had issued some bills for the purpose of passing on Cenvat credit without actual sales of goods. But he stated that where quantity is in the range of 400-500kgs he had actually sent these goods through the vehicles owned by him or his company. He also stated that where the quantity is more than 500 kgs the goods were not sent through the vehicles. On the other hand para 4 of SCN alleges that Shri Jain stated that only vehicle numbers were mentioned on the sales invoices without any invoiced material to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation stage the Appellants were not confronted with the evidences appearing against them. A statement was recorded without showing any evidence against them. During the statement the authorized signatory had confirmed that all the goods were received in the factory and payments to the suppliers were made by cheques. 10. The submissions by the DR are,- (i) Shri Jain was a beneficiary of the fraud and therefore, his cross-examination was not allowed; (ii) This is a case where auto-rickshaws and scooters were shown to have transported the impugned goods. Since such a possibility does not exist no opportunity was given to cross-examine the drivers of the vehicles because producing these persons for cross-examination can be quite a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f he was a beneficiary and not likely to depose against the Appellants who were also benefited from the alleged fraud, how did the department get the statement from Mr. Jain which is being relied upon! An argument that at the time of recording the statement he was trustworthy but he cannot be trusted during cross-examination is inherently contradictory. If from cross-examination such a position emerges it is to be explained by the adjudicating authority. Such a presumption without cross-examination is unacceptable. The department s case does not bring out whether any action was taken against Shri Jain for issuing fraudulent invoices. In the absence of this information it has to be presumed that the department took statements against the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been transported at all is faulty. 16. This case is based on a statement that most of the invoices issued by SI covering more than 500 Kgs of goods were fraudulent. On the basis of this statement, all credits based on all invoices for any quantity issued by SI were dis-allowed. Thus the case made out is not consistent with the evidence collected. 17. On the whole this case is made out based on inadequate investigation and unacceptable principle followed during adjudication. The only matter that could have survived is the transportation of 6 consignments weighing more than 500Kgs in each case, and one such case being that of a consignment weighing 705 Kgs transported by an auto-rickshaw. In this case there can be a suspicion but once th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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