9911796707
TMI Blog2015 (5) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... of the manufacturer or even of its Directors/partners who are not even permitted to be cross-examined, as in the present case, without one or more of the evidences referred to being present - reliance on private/internal records maintained for internal control cannot be the sole basis for demand. There should be corroborative evidence by way of statements of purchasers, distributors or dealers, record of unaccounted raw material purchased or consumed and not merely the recording of confessional statements. A co-ordinate Bench of this Tribunal has, in another decision, once again reiterated the same principles, after considering the entire case-law on the subject [Hindustan Machines v. CCE [2013 (5) TMI 543 - CESTAT NEW DELHI]. Members of Bench having hearing initially differed, the matter was referred to a third Member, who held that clandestine manufacture and clearances were not established by the Revenue. Estimation of quantity of goods manufactured and clandestine removal of goods by the appellants can not be slapped on the basis of averages arrived and calculated based on norms of gas consumption in manufacture of 1 MT of frit. It is rightly contested by the appellants that fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clandestine removal against the present appellants. Exact amount of such additional consideration was required to be determined for addition to the transaction value even if all the statements and documents were held to be admissible evidence and satisfied the test of Section 9D of the Central Excise Act, 1944 - valuation has been enhanced solely based on the assumption that after booking of the case these appellant enhanced their prices. In the case of transaction value realm the same product can be sold at different prices as per Section 4 of the Central Excise Act, 1944 unless actual additional consideration has been shown to have flown back to the appellants. In the absence of exact quantification of cash received by individual frit manufacturer, transaction value can not be enhanced even if there are half cooked circumstantial evidences to the proceedings indicating suspected undervaluation. It is now well understood that suspicion howsoever grave can not take the place of an evidence. Therefore, it may not be correct to hold that preponderance of probability should always be given to the Revenue, as Hon ble Apex Court in a particular held it to be so. - Decided in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IO-51/COMMR/SURAT-II/2013 xiv E/11962/2013. Mahendra Virchand Patel OIO-51/COMMR/SURAT-II/2013 xv E/12386/2014. Zirconia Cera Tech Glazes OIO-AHM-EXCUS-003-COM-067-13-14 xvi E/12387/2014. Pravinbhai Narshibhai Patel OIO-AHM-EXCUS-003-COM-067-13-14 xvii E/13289/2014. Growmore Ceramics Pvt Limited OIO-AHM-EXCUS-003-COM-010-14-15 xviii E/13290/2014. Harshabhai Chimanbhai Patel OIO-AHM-EXCUS-003-COM-010-14-15 xxix E/13646/2014. Futura Ceramics Pvt Limited OIO-AHM-EXCUS-003-COM-021-14-15 xxx E/13649/2014. Orient Glazes Limited OIO-AHM-EXCUS-003-COM-020-14-15 xxxi E/13650/2014. Manickchand Nahar OIO-AHM-EXCUS-003-COM-020-14-15 xxxii E/13651/2014. Manish Nahar OIO-AHM-EXCUS-003-COM-020-14-15 xxxiii E/13688/2014. Ravikumar Chitrapu OIO-AHM-EXCUS-003-COM-021-14-15 xxxiv E/13720/2014. Wellsuit Glass & Ceramic Pvt. Limited OIO-VAD-EXCUS-001-COM-24-14-15 xxxv E/13721/2014. Balkrishna M. Thakkar OIO-VAD-EXCUS-001-COM-24-14-15 As the issues involved in all these appeals, except Srl No. (xviii) to (xxi) above) are same therefore, the same are being taken up for disposal under this common order. Extension of stay applications and stay applications are filed by some of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d tiles. (vii) That when the prices of Ceramic tiles were being raised, the price of Ceramic glazed frit was also raised by the manufactures of frit. (viii) That the impugned orders-in-original hold that appellants have cleared/sold the frit prior to February/March 2008 by using different product codes to make it appear that there were various varieties of frit and these varieties were sold at different prices. That the same quality of frit was sold to lesser known tile manufactures at lower price but was sold at higher prices to reputed tile manufactures. (xiii) That the Adjudicating authorities have relied upon one unofficial ledger recovered from M/s. Comet Ceramics (Comet)(A ceramic tile manufacturer) to establish that appellants have collected extra cash from the Ceramic Tile manufactures. That statement of Director of Comet recorded by the investigation allege that this unofficial ledger contained details of unaccounted cash paid to various raw material suppliers, including the appellants, out of the cash amounts collected from dealers of under valued Ceramic tiles. (xiv) That as per the statements of personnel of M/s. Laxmi Tiles and Navdeep Ceramics, it is alleged by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under an examination as per the express language of Section 9D (1) of the Central Excise Act, 1944 followed by cross-examination. That the said procedure has not been followed in any of these cases, which is obligatory as held by the following case laws: (a) J and K Cigarettes Limited vs. CCE - [2009 (242) ELT 189 (Del)] (b) Basudev Garg vs. CC - [2013 (294) ELT 353 (Del)]. (c) CCE, Allahabad vs. Govind Mills vs. CC - [2013 (294) ELT 361 (All.)] (d) Arya Fibers Pvt. Limited vs. CCE - [2014 (311) ELT 529(Tri. Ahmd.)] It was strongly argued by the Learned Senior Advocate that if cross-examination of the key witnesses is not given as per Section 9D and the above judicial pronouncements, than those statements can not be relied upon documents and have to be discarded as having any evidentiary value. (ii) That the statements given by the appellants were retracted later by affidavits during adjudicating proceedings and can not be relied upon. (iii) That clandestine removal can not be held to be established if no enquiries are conducted regarding unaccounted raw materials purchased and utilization of such materials including transportation of such raw materials/ finished goods eith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra evidences obtained from pen-drives SANYO stands discredited by the facts which have emerged in cross-examination in the case of appeal filed by Wellsuit Glass & Ceramics Pvt. Limited. Learned Senior Advocate made the bench go through the cross-examination of Shri M. Patel, Director of M/s. Sanyo Cera Tiles Pvt. Limited, held on 29.10.2014 that he was only 12th standard pass and not very well conversant with English Language. That as per cross-examination of Shri V.M. Thakkar, Superintendent, DGCEI on 11.11.2014 in the case of Wellsuit Glass, the authenticity of the papers obtained from pen drive AJTAK is highly suspicious and can not be regarded as an authentic and proper evidence. (xi) That as per Para 9.3.3 of the Order-in-Original No. 05/BRC-1/MP/2011 dated 23.3.2011, in the case of M/s. Belgium Glass & Ceramics Pvt. Limited (E/796/2011), the names of frit manufacturers were not written on the relied upon documents and only a bald statement is made that payments were made by the tile manufacturers to the frit manufacturers. Learned Senior Advocate brought to the attention of the bench contents of Para 9.3.3 of the adjudication order in the case of Belgium Glass & Ceramics Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and based purely on presumptions as estimated. (xv) That cross-examination of the Director of SANYO in the remand proceedings clearly gives the evidence that data said to be taken from the pen-drives of SANYO is not reliable piece of evidence and can not be used for enhancing value. (xvi) That in the absence of cross-examination of the relied upon witnesses the statements relied upon has to be discarded as proper piece of evidences. (xvi) That in the realm of transaction value under Section 4 of the Central Excise Act, 1944, there could also be different sale prices for the same product, depending upon the quality of finished goods contracted, long term association with the buyers etc. That slight variation in selling prices can not be made as the basis for enhancing assessable value of transaction and that too at the highest of such transaction value. (xvii) That no excess/ shortages of raw materials were found in any of the appellants factory and no finished goods were seized anywhere by the investigation. That there is no corroboration that excess raw material required for such clandestine activity was procured clandestinely and no unaccounted and excess cash was seized anyw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate of the appellants that such modernization/ changes were also undertaken by other manufacturers to reduce the gas consumption for better market competition, profitability and survival. It was strongly argued by the learned Senior Advocate that quantity for clandestine clearances can not be made on such flimsy, hypothetical and presumptuous grounds. (f) That neither any expert opinion was sought from a Chartered Engineer nor any comparative study of units was ever conducted to work out quantity of natural gas required to produce a particular quantity of frit. (g) That the Transaction Value under Section 4 of the Central Excise Act, 1944 can not be fixed on the basis of averaging and approximation as made by the Revenue because it is not a case of best judgment valuation under the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. That for determining the capacity of frit manufacturing Kilns, no notification under Section 3A of the Central Excise Act, 1944, has been issued to calculate deemed clearances as attempted by the investigation. (h) That remand order in the case of Wellsuit Glass & Ceramic Pvt. Limited vs. CCE - [2014 (304) ELT 618 (Tri. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tile manufacturers, it was noticed that frit manufacturers are indulging in large scale undervaluation and clandestine removals and that extra cash generated in the sales of ceramic tiles was diverted by the traders of ceramic tiles to the frit manufacturers and that such tile manufacturers also used force against the departmental officers for which police cases were also registered against the tile manufacturers separately. (ii) That the tile manufacturers were also purchasing raw materials at lower prices to keep the cost of tiles low. That Frit was one such raw material for tile manufacturers which was obtained at lower invoice price and frit manufacturers were compensated by cash payments through Shroffs/ Angadias etc. (iii) That as soon as the cases were booked against the appellants the price of the frit and tiles were increased drastically by the respective class of manufactures. 3.1 That the cases of undervaluation/ clandestine removals have been made against the appellants on the basis of private records such as ledgers maintained manually or in the pen drives, private notebooks/ diaries or parallel invoices. That 68 manufacturers of ceramic tiles have admitted during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t here. In that case with similar facts, the matter was remitted for de novo adjudication after affording the opportunity of corss-examination. Transcripts of cross examination show that the entire cross examination was only w.r.t the statements. No evidence was produced that the statements were taken under duress, threat or inducement. Further, affidavits purportedly retracting from the statements were also produced only after a lapse of 8 to 9 months. That for the records and documents recovered from Sanyo or others there is no dispute raised by the appellants nor its veracity doubted and accordingly entire request for cross examination of witnesses is without any substance. 3.2.3 That it is pertinent to note that during the hearings held on 3/7-4/2015, the appellants did not press for remanding the matters for the purpose of affording cross examination. It was suggested that the statements are to discarded. There is no legal or factual justification for the same. As argued below. 3.2.4 That Adjudication authorities have held that the statements given by various witnesses, including Noticees, were made voluntarily and are admissible in evidence for the following reasons: (i) R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the affidavit. 3.2.5 That the following case laws support the argument of the Revenue that retractions made by the appellants in the present proceedings are not acceptable. (a) M/s Agarwal Overseas Corporation vs. Commissioner of Customs, Mumbai, reported in [2009 (248) ELT 242 (T-Mumbai)]. (b) M/s Em Pee Bee International Vs Commissioner of Central excise, Chennai, reported in 2008 (229) ELT 704 (Tri. Chennai), (c) CCE, Mumbai vs. Kalvert foods India Pvt. Limited 2011 (270) E.L.T. 643 (S.C.), (d Thermotech vs. Commissioner of Central Excise, Delhi ) - [2013 (293) E.L.T. 712 (Tri. Del]. 3.2.6 That as much as the provisions of section 9D of CE Act have not been complied with by the adjudicating authorities in all cases, the statements of various persons relied upon have to be eschewed from the following consideration. (i) That in the light of Para 12 of the judgment of Honble High Court of Delhi in J & K. Cigarettes Limited - [2009 (242) ELT 189 (Del)], It is true that even in adjudicating proceedings, Section 9D can be utilizedby the adjudicating authorities. This provision makes it clear that a statement given by a person who is dead or who cannot be found or who is incap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cies in the Panchnamas drawn at various points of time this piece of evidence merits rejection. It is submitted that the Pen-drive seized from the premises of SANYO was in a sealed envelope is evident from the second Panchnama and hence non mentioning of the Pen-drive being kept in a sealed envelope in the first Panchnama is only an inadvertent omission. It does not constitute an infirmity. Besides, sealing need not always be with lac. It may also be conceded that some confusion has arisen in the name of the Panch witness but an important fact to be reckoned with is that when cross examined in the de-novo adjudication proceedings, relating to Wellsuit Glass and Ceramics Pvt. Limited, Shri Mital Bhikabhai Patel, Director of SANYO, did not specifically dispute the recovery of the Pen-drive from SANYO or raise any doubt about the Pen-drive having been substituted or dispute the content of the Pen-drive. Nor has he specifically denied the existence of the Ajtak Ledger or disputed any entries even after 6 years from the recording of the statement. In these circumstances the so called shortcomings in the Panchnamas pale into insignificance. Printouts from the pen-drive ran to more than 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing natural gas consumption per 1 MT of frit as the norm came up for consideration in the case of Wellsuit. Significantly enough, this Honble bench has, in its order dated 31.03.2011 [2014 (304) ELT 618 (Tri.-Ahmd)] expressed no objection to consider the norm of gas consumption to arrive at the production of frit. The Honble bench has only directed the respondent to conduct more representative studies on the gas consumption on the predominant frit codes manufactured by Wellsuit. By these directions the Bench has effectively approved the basic approach of faking gas consumption as a criterion to estimate production of frit. 3.5 That quantum of clandestine manufacture and clearance of frit has been worked out on the basis of average consumption of natural gas supplied as agreed to by the frit manufacturers. That out of 14 frit manufacturers units estimation on the basis of natural gas consumption/ PMT has been applied only with respect to 10 appellants as follows:- S No. Appellant Criteria adopted per 1 MT of frit 1. Supreme Consumption norm of 350 SCM (Lowest Avg.) based on data furnished was considered. This matched with the norm suggested by the management. 2. Vishwa Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the following case laws:- (i) Maharashtra State Board of Secondary & Higher Education vs. K.S. Gandhi & Others [1991 (2) SCC 716] (ii) D. Bhoormull [1983 (13) ELT 1546 (SC)] (iii) Shah Guman vs. State of Andhra Pradesh [1983 (13) ELT 1631 (SC)] (iv) Manilal Bhanabhai Patel vs. UOI [1992 (60) ELT 99 (Guj.)] (v) Rishikesh Singh vs. The State of Uttar Pradesh - [AIR 1970 All 51] (vi) Gulabchand Silk Mills vs. CCE, Hyderabad-II [2005 (184) ELT 263 (Tri. Bang.)] 5. Heard both sides and perused the case records and the written submissions filed by either sides. The issues involved in appeals No. E/1016 to 1019/2011 mentioned at Sr. No. (xviii) to (xxi) of Para 1 is regarding clubbing of clearances of more than one units on the basis of consumption of natural gas connection pertaining to one unit. This aspect was not argued during the course of hearing. Though special Counsel appearing on behalf of the Revenue has filed written submission on these appeals but it is observed from the case records that none appeared on behalf of these appellants and no written submissions are filed. As the issue involved in appeal Nos. E/1016 to 1019/2011 is different and not argued during hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the appellants or by conducting some gas consumption studies. Besides certain studies/ data with respect to average packing time taking for filling of finished goods (Frit) in the plastic bags and consumption of electricity units per MT of Frit on the basis of appellants records, have also been used to support that clandestine manufacture and clearances have been effected by the concerned appellants. 8. As per Para 3.5 above, clandestine manufacture and clearance of frits by the appellants have been estimated by taking different gas consumption norms which either got suggested by the appellant or worked out by the investigation. Average gas consumption from 263 SCMs to 484 SCMs were fixed for different appellants and were considered by the Adjudicating authorities for calculating/ confirming the demands and imposing penalties. Following observations have been made by the Adjudicating authority in the case of Belgium Glass & Ceramics Pvt. Limited (Appeal Nos. 796 to 798/2011) in paras 24.4.4, 24.5.4 and 24.5.5 while passing OIO No. 05/VRC-1/MP/2011 dated 23.03.2011 and justifying the calculations/ estimations made by Revenue:- 24.4.4. Thus, even by considering that 5 nos. of ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the physical verification conducted at the factory and inference drawn in respect of their production capacity is factual. In order to have an idea on the quantum of the suppression of production by M/s. Belgium Col. No. 7 has been added to the Annexure-F which indicates the difference of quantity accounted for in the official records as against the average production of 1500MT per month. The chart indicates that except during a period of 7 months, the monthly average production noticed during the aforesaid Panchnama dated 26.09.2009 exceeded the quantity accounted for by M/s. Belgium in their statutory records. 8.1 From the above findings of the adjudicating authority gas consumption of 450 SCM per MT of frit manufacture has been arrived at for M/s. Belgium Glass & Ceramics Pvt. Limited which according to Revenue will gave a capacity of 1333.2 MTs per month to that appellant. In Para 24.5.4 and 24.5.5, the adjudicating authority observed that the normal quantity of frit that could be manufactured by this appellant will be 1500MTs per month. It has also been fairly mentioned by the adjudicating authority that in certain months the production of this appellant was also more t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idences of gas having different GCV and HCV exist on records. This argument has been brushed aside by the adjudicating authority that Shri Piyush Makadia, Director of the appellant has agreed to consumption of 450SCM/PMT (plus/minus) 10% gas consumption. The above calculations are thus based on statement of Shri Piyush Makadia, Director reproduced in OIO dated 23.03.2011 at Paras 53 & 54. However, such statements can not be relied upon unless the cross-examination of the witnesses is extended to the appellants. 8.2 In the remaining cases also where clandestine clearances have been estimated on the basis of natural gas consumption, there is no evidence of excess raw material purchased by the appellants. No shortages/ excess of raw materials or finished goods have been detected any where during the investigations. In none of the cases there is any seized cash or seizure of clandestinely removed finished goods during transportation from the factory premises of the appellants. In this regard appellants have relied upon the case laws of Arya Fibers Pvt. Limited vs. CCE, Ahmedabad-II [2014 (311) ELT 529 (Tri. Ahmd.)] and Gupta Synthetics Limited vs. CCE, Ahmedabad II [2014 (312) ELT 225 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umeration of all situations in which one could hold with activity that there have been clandestine manufacture and clearances, would not be possible. As held by this Tribunal and Superior Courts, it would depend on the facts of each case. What one could, however, say with some certainty is that inferences cannot be drawn about such clearances merely on the basis of note books or diaries privately maintained or on mere statements of some persons, may even be responsible officials of the manufacturer or even of its Directors/partners who are not even permitted to be cross-examined, as in the present case, without one or more of the evidences referred to above being present. In fact, this Bench has considered some of the case-law on the subject in Centurian Laboratories v. CCE, Vadodara [2013 (293) E.L.T. 689]. It would appear that the decision, though rendered on 3-5-2013, was reported in the issue of the E.L.T., dated 29-7-2013, when the present case was being argued before us, perhaps, not available to the parties. However, we have, in that decision, applied the law, as laid down in the earlier cases, some of which now have been placed before us. The crux of the decision is that re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondents and quashed the order passed by the adjudicating authority. 2.?The Respondent Nos. 1 and 2 were involved in the manufacturing of MS ingots and in respect thereof had maintained the books of account as provided under the Central Excise Rules and were furnishing the returns and paying the central excise duties. The Superintendent issued the show cause notices dated 1-12-2006 asking the respondent to show cause why the demand towards central excise duty may not be confirmed for the period from 2001-02 to 2004-05 by invoking the proviso to Section 11A(1) of the Act and why the penalty should not be imposed under Rule 25(1) of the Central Excise Rules, 2002 read with Section 11AC of the Act. Various allegations have been made in the show cause notices and from the perusal of the show cause notices it appears that the excess production has been estimated on the basis of the higher electricity consumption. The respondents filed their reply. The Commissioner of Central Excise, Meerut-I, vide its order dated 30-7-2007 has confirmed the demand against the respondent nos. 1 and 2 and also imposed the penalty on the respondent nos. 1 and 2 and on other respondents alleged to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to adopt an estimation method for demanding duty and proving clandestine removal which is not prescribed by law. 8.5 In the case of appellant M/s. Wellsuit Glass & Ceramics Pvt. Limited - [2014 (304) ELT 618 (Tri. Ahmd.)], this Bench remanded the case to the Adjudicating authority to get, inter-alia, some more studies done on the gas consumption per metric tonne of different grades. It has been argued by the Revenue that the studies suggested by the Bench are not possible now and such studies are also not possible with respect to the other appellants. Para 3.2 and 6 of the order passed by this Bench in the case of M/s. Wellsuit Glass & Ceramics Limited (supra) are reproduced below:- 3.2 With regard to consumption of gas, learned Advocate relied upon the statements of Shri Balkrishna M. Thakkar, Managing Director, that the consumption of gas would vary on the quality of frit, raw material used, condition of Kiln, gas pressure, fluxes used, etc. It was thus argued that there are various factors which affect the consumption of gas and there cannot be a fixed ratio of consumption of gas for a specific frit output. He also argued that in October, 2007, there was a change in the man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CCE - [2009 (248) E.L.T. 270] (v) SVM Cera Tea Limited v. CCE - [2013 (292) E.L.T. 580] 4 .. 5 .. 6. On the issue of clandestine removal of frit, based on the gas consumption of the main appellant, it is observed from Para 13.2 of the order-in-original dated 10-5-2011 that records maintained by main appellant show the gas consumption for making 1 MT of frit from 844 SCM to 286 SCM. It has been contested by the appellant that gas consumption varied from season to season, from one quality of frit to other quality of frit, use of better technology, etc. It has also been brought on record that after change in the management in Oct., 2007 and installation of new furnaces and new refractories, the gas consumption has reduced. Further appellant has also brought on record that due to expert consultations and use of certain fluxes also the gas consumptions per MT of frit have come down. Evidences were also brought on record during the course of hearing regarding installation of an Electricity Generator and replacement of better quality refractories in the kilns by the main appellant. Under the above factual matrix, the method used by the investigation cannot be a sound method to deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g duty from the appellants; based on consumption of natural gas, electricity consumed and packing time taken; is not acceptable and is required to be rejected. 9. So far as points mentioned at Para 6(ii) and 6(iii) are concerned, it has been held by the adjudicating authorities that undervaluation and clandestine removal stand provided in view of the pen-drives, AJTAK XYZ of SANYO, personal ledger of Comet, private diaries/ writing pads and the statements of ceramic tile manufacturers. Appellants have argued that the print-out taken from the pen-drive AJTAK XYZ are not admissible as a piece of evidence as the same are not the documents admissible as evidence under the relevant Section of the Central Excise Act, 1944. It was also argued by the appellants that the number of Panchnamas recorded and the opening of the said pen-drive clearly suggest that the data recovered from the pen-drive is highly objectionable, suspicious and not acceptable. It is observed from the case records of Wellsuit Glass & Ceramic Pvt. Limited [E/13720/2014] that seizure of the said pen-drive was effected on 17.7.2008 under a Panchnama and it was not stated in this Panchnama that the pen-drive was put insi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above discrepancies the authenticity and veracity of data retrieved by investigation from the silver pen-drive is not reliable and can not be accepted as a piece of evidence in deciding the case of undervaluation and clandestine removal against the present appellants with respect to point mentioned in Para 6 (ii). 10. So far as the question mentioned at Para 6(iii) regarding denying cross-examination of witnesses whose statements were used for establishing undervaluation/ clandestine removal of frit based on the private records, the statements of tile manufacturers and Shroff/ Angadias is concerned; it is argued by the appellants that the entire exercise of such quantification has been made as per the statements of the witnesses whose cross-examination has not been allowed by the adjudicating authority as per Section 9D of the Central Excise Act, 1944. Appellants relied upon the following case laws:- (i) J.K. Cigarettes Limited vs. CCE [2009 (242) ELT 189 (Del.)] (ii) CCE, Allahabad vs. Govind Mills Limited - [2013 (294) ELT 361 (All.)] (iii) Basudev Garg vs. CC [2013 (294) ELT 353 (Del.)] (iv) Swiber Offshore Construction Pvt. Limited vs. Commissioner of Customs, Kandla [20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons for relying upon the statements are also available from the facts narrated in the show cause notice. It is not necessary that all the witnesses should be called by the Adjudicating authority suo-moto for examination in a quasi-judicial proceedings for cross-examination. However, as per the provisions of Section 9D (1)(b) of the Central Excise Act, 1944, read with the judicial pronouncements relied upon by the appellant every adjudicating authority should call the witnesses when requested by the party against whom those statements are to be used. If by making efforts for a few occasions the witnesses summoned do not appear than automatically the case could be mature for accepting the statements as admissible evidences under Section 9(D)(1)(a) of the Central Excise Act, 1944. However, it was not open to the adjudicating authorities to straightaway reject the request for cross-examination in view of the law laid down by the judicial pronouncements relied upon by the appellants. The reasons for rejecting the appellants request for not allowing are also required to be intimated to the appellants as per the case law of J.K. Cigarettes Limited (supra) so that appellant may explore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... independent evidence which was sought to be relied upon by the Enforcement Directorate to establish the charges levelled against the appellant. And based thereon, we shall determine whether the same is sufficient on its own, or in conjunction to the retracted statements referred to above, in deciding the present controversy, one way or the other. First and foremost, reliance was placed on mahazar executed (at the time of the recovery, from the residence of the appellant) on 25-10-1989. It would be pertinent to mention, that the appellant in his response to the memorandum dated 12-3-1990 had expressly refuted the authenticity of the mahazar executed on 25-10-1989. Merely because the mahazar was attested by two independent witnesses, namely, R.M. Subramanian and Hayad Basha, would not led credibility to the same. Such credibility would attach to the mahazar only if the said two independent witnesses were produced as witnesses, and the appellant was afforded an opportunity to cross-examine them. The aforesaid procedure was unfortunately not adopted in this case. But then, would the preparation of the mahazar and the factum of recovery of a sum of ₹ 8,24,900/- establish the guil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, including the case where the goods are ot sold, be the value determined in such manner as may be prescribed. (2) . (3) . (a) . (b) . (d) transaction value means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to , or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertise or publicity, marketing and selling organisation expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. 13. It is not the case of the Revenue that the value of the goods cleared by the appellants is not determinable at the Factory gate and therefore, some other method under the Central Excise Valuation Rules is required to be adopted to arrive at the assessable value. Rather the case of the Revenue on valuation is that certain additional consideration coming t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Section 4 does not go by the concept of Normal Price of the old Section 4 of the Central Excise Act, 1944. In the absence of exact quantification of cash received by individual frit manufacturer, transaction value can not be enhanced even if there are half cooked circumstantial evidences to the proceedings indicating suspected undervaluation. It is now well understood that suspicion howsoever grave can not take the place of an evidence. Therefore, it may not be correct to hold that preponderance of probability should always be given to the Revenue, as Hon'ble Apex Court in a particular held it to be so. Each case has to be decided in view of the facts of that case. In view of the above observation and the law laid down by the Apex Court in the case of A. Tajudeen vs. UOI (supra) preponderance of probability can not always be allowed in favour of the Revenue when there is no independent corroboration of the facts and the case is made only on the basis of statements which were not allowed to be tested under cross-examination as per Section 9D (1)(b) of the Central Excise Act, 1944. 14. In view of the reasons recorded above, appeals filed by the appellants mentioned in paras 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
