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TMI Blog2013 (9) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. - E/268-269 and 275, 270-274, 69, 232, 295-300 and 770/2009 - A/1223-1239/2012-WZB/AHD - Dated:- 17-7-2012 - Ms. Archana Wadhwa and Shri B.S.V. Murthy, JJ. Shri P.V. Seth, Hardik Modh and P.G. Mehta, Advocates, for the Appellant. Shri S.K. Mall, SDR, for the Respondent. ORDER Three appeals and stay petitions have been filed against the impugned Order-in-Original No. 23/Commissioner/RKS/AHD-II/2008, dated 28-11-2008 (First case for short) and 14 appeals and stay petitions have been filed against the Order-in-Original No. 22/Commissioner/RKS/AHD-II/2008 dated 19-11-2008 (Second case for short). Out of the 14 appeals and stay petitions, appeal and stay petition filed by M/s. New Mallik Transport Co. was listed for hearing on 10-8-2009 but no one appeared on behalf of the appellant. This stay petition is also taken up for disposal with other applications. 2. The main party in all the above cases is M/s. Gujarat Cypromet Limited. The issue involved is also the same namely availment of Cenvat credit on the inputs which were not received by the appellants in their factory. In the first case, the findings of the Commissioner is that the appellants did not receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In this connection, he drew our attention to the cross-examination details of Shri Atul Sharma, Manager of Singhal Road Carrier, Ahmedabad conducted before the adjudicating authority in another case on 15-10-2008, wherein Shri Atul Sharma stated that if the goods are transported Via Dungarpur, Modasa, Shamlaji check post is by-passed. He also submits that department has not produced any evidence to show that the inputs have been sold in the market other than stating that the same has not been received in the factory. Further, he also submitted that appellants have been manufacturing finished goods by using the raw material received by them and have cleared the same on payment of duty. The question how the appellants could manufacture the finished goods without receiving the raw materials on which they taken Cenvat credit, has not been considered/answered by the Revenue anywhere in both the adjudicating proceedings. 5. Shri Hardik Modh, learned advocate on behalf of Shri Sanjay B. Hundia submitted that the appellant is doing the business of shroff and he has taken the permission of RBI for this purpose. During the course of his business he has discounted 12 cheques of M/s. Gujar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lloys shows that P.S. Alloys had never manufactured any goods in the premises and raw material supplier to P.S. Alloys has categorically stated that he never supplied any goods. Another unit, M/s. Annapurna Impex, who was supposed to be supplier of the goods to the appellants has been found to have never sold such goods as per the report given by the Government of Punjab. He submits that the department has made out a very strong case against the appellants. 7. We have considered the submissions made by both the sides. As rightly pointed out by the learned SDR in the first case, the appellant had not even given the names of persons whom they would like to cross-examine in their letter dated 9-10-2008. Appellants had simply stated that they would like to cross-examine the transporters, where as it is not one transporter who is involved in transportation of goods. Further, the record of personal hearings in the first case in respect of personal hearings held on 9-10-2008 reproduced by the Commissioner in his order, reads as follows; Shri Paresh Seth, advocate appeared for personal hearing today. It was pointed out by him that no reply to show cause notice has been submitted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, the types of vehicles were found to be two wheelers, Scooters, Motor Cycles, Maruti, etc. (vii) Further, the Director of P.S. Alloys never responded to the summons after the departmental officers recorded statements of suppliers of raw materials to them. (viii) As regards, Annapurna Impex, the Commissioner has found that they were engaged in the drawing of copper wires and there was no facility to manufacture ingots or copper wire rods. They also did not have melting furnace in their factory. (ix) The Director of the Annapurna Impex never responded to the summons and did not produce any document. (x) Nodal Information Collection Centre of Excise and Taxation of Govt. of Punjab has reported that no goods in respect of M/s. Annapurna Impex had been transported out of Punjab State during the said period and the supplier had not reflected any sales outside Punjab in their sale tax returns submitted to Sales Tax Department. (xi) In this case also, out of 21 vehicles, 10 vehicles were found to be Motor Cycles, Scooters, Motor cars and two vehicle s numbers were found to be non-existent and in respect of remaining vehicles, no report has been received. The owner of the vehic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r :- 6. The Tribunal in its impugned order has recorded the submission of the petitioner that their company had been declared a sick industrial undertaking by the BIFR and has accumulated losses of over Rs. 16 crores. After considering the submissions and the grounds of appeal, the Tribunal has held that the department has a strong prima facie case against the petitioner. The Tribunal has observed that in a prima facie case of clandestine removal like the present case, showing losses appears to be nothing unusual. After recording the aforesaid findings the Tribunal has directed the petitioner to deposit a sum of Rs. 50 Lakhs, which is approximately 50% of the duty amount. In the background of the facts and findings recorded by the Tribunal. It is apparent that the Tribunal has addressed itself to the issue of financial hardship as well as the fact that the petitioner has been declared a sick industrial unit by the BIFR and has therefore, directed pre-deposit of only 50% of the duty demand. In the circumstances, the contention advanced by the learned Counsel for the petitioner that the Tribunal has not addressed itself to the issue of the petitioner having been declared as a sick ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons, their request for cross-examination of the deponents should have been accepted by the adjudicating authority. As the adjudicating authority has not given any valid reasons for denial of such request, the impugned order should be held to have been passed in gross violation of principles of natural justice and the matter should have been remanded. 13. My learned brother has held that the appellant s claim of violation of natural justice does not appear to be valid, inasmuch as there is ample evidence on record to arrive at findings against them. However, on going through such evidences, as reproduced in the order by my learned brother, I find that they are more or less in the shape of statements of either CHA or transporters or statement of the owner of premises, where M/s. P.S. Alloys was shown to have been functioning and the statements of the supplier of the raw materials. As such, it is the statement of various persons, which stand relied upon by adjudicating authority. It is well settled that, when the statement of a third person or co-accused is being relied upon, it is essential for a fair trial to test the veracity of the same by cross-examination. Mere reliance b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other evidence on record to uphold the findings of adjudicating authority, the fact that the principles of natural justice have been violated, is sufficient for the impugned order to be set aside. I may, here observe that, where even the impugned order is passed by the adjudicating authority without affording opportunity of personal hearing, the matters are being remanded, even though there may be sufficient evidence against the appellant to come to a conclusion against them. As such, without going to the merits of the case, I am of the view that impugned order is liable to be set aside on the ground of violation of principles of natural justice and the matters need to be remanded for de novo consideration after observing principles of natural justice. DIFFERENCE OF OPINION 17. Whether M/s. Gujarat Cypromet Limited should be directed to deposit an amount of Rs. 40 Lakhs and Rs. 90 Lakhs in terms of Section 35F of Central Excise Act, 1944, as held by learned Member (Technical) or all the stay petitions have to be allowed unconditionally and the matters to be remanded for fresh consideration after following the principles the natural justice. 18. Vide Order No. M/991-1007/WZB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed and matter is required to be remanded for fresh consideration with directions to follow the principles of natural justice, as observed by Member (Judicial) (Pronounced in the Court on 24th Sept. 2010) 20. This Difference of Opinion is listed before me as per orders of Hon ble President for deciding the points of difference arose between the Bench while deciding the appeals No. Application No. E/S/263/2009 in Appeal No. E/268/2009. 21. Following Difference of Opinion are indicated :- (i) When the impugned order stands passed by the Commissioner without actually hearing the appellant in person and when there was no detailed reply filed by the appellant, whether the principles of natural justice can be said to have been violated, requiring the impugned order to be set aside and appeal to be remanded, as observed by Member (Judicial) or the same were not relevant for the purpose of Stay Petition so as to direct the appellant to deposit an amount of Rs. 40 lakhs as a condition of hearing of their appeal, as observed by Member (Technical)? (ii) Whether the appellant s request for cross-examination was required to be allowed by the Commissioner or not? (iii) Whether the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not granted the cross-examination, while in another case, the adjudicating authority has given reasoning to the effect that such cross-examination is not required at all as the case of the Revenue is built upon various corroborative evidences. He would also submit that the coordinate Bench of the Tribunal in the case of Harika Resins Pvt. Ltd. - 2010 (253) E.L.T. 108 (Tri.-Bang.) and in the case of Self Knitting Works - 2009 (238) E.L.T. 105 (Tri.-Mum.), held that cross-examination should be granted if the evidence is relied upon by the adjudicating authority is of third party. 23. Ld. SDR, on the other hand, would submit that the facts of the case relied upon by the ld. Counsel in the case of Metal Gems Others and in the case of NICO Extrusions Pvt. Ltd. are different than the facts in this case. It is his submission that in the case of NICO Extrusions Pvt. Ltd. as well as Metal Gems others, there was a specific request for cross-examination of the individuals and in those cases, the evidences that were relied upon were mainly on the statements. It is his submission that in the case in hand, there is clear-cut evidence inasmuch as in one case, the appellant did not bother ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and recording of the same in statutory records should also be held as true and correct. 25. Ld. SDR relies upon the decision of Hon ble Supreme Court in the case of Surjeet Singh Chhabra v. UOI - 1997 (89) E.L.T. 646 (S.C.), and submits that the cross-examination of the witnesses can be allowed where the petitioner has confessed non-allowing of cross-examination is not violative of principles of natural justice. 26. I have considered the submissions made at length by both sides and perused the records. 27. On perusal of the records, I find that the adjudicating authority, in both the cases, has relied upon the various evidences to come to a conclusion that the appellant has availed in-eligible Cenvat credit as the inputs which were indicated in the duty paying documents, never moved to the appellant s factory premises. It is also seen that the adjudicating authority has relied upon the statement of the CHA who has admitted that the goods were transported only to the places in or around Delhi, transporters who have admitted that they have not transported the goods and most of the vehicles were found unfit for transporting the goods and one of the transporter has been fictiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remanded the matter back to the adjudicating authority at the stay stage itself by directing the lower authorities to allow the cross-examination of the persons as sought for by the assessee. 30. In my view, the charges of availment of Cenvat credit without receipt of the inputs are serious allegations which cannot be held as correct without adequate/cogent evidences and it is also imperative that the witnesses be cross-examined to bring the truth on record as to how they have stated that the goods were never transported to the appellant. 31. In my view, the Revenue s case in both these sets of appeals is mostly based upon the statements recorded of various persons and not on any corroborative evidences, as has been claimed. 32. In view of the foregoing, in my considered opinion, the conclusion reached by the ld. Member (Judicial) in these cases is correct and I concur with the same. 33. Registry is directed to place the file before the Bench for further action. 34. In view of the majority decision, all the stay petitions are allowed and the matter remanded for fresh consideration, after following the principles of natural justice. - - TaxTMI - TMITax - Central Excise ..... 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