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TMI Blog2015 (9) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... o prove the allegation of duty evasion against PTPL, the demand would have to be confirmed against PTPL and not GTC Industries Ltd. The matter has not been adjudicated in this manner and, therefore, for this reason the impugned order has to be set aside and the matter has to be remanded for de novo adjudication. - Matter remanded back. - E/50576-50581 and 51933/2014 - Final Order Nos. A/54845-54851/2014-EX(DB) - Dated:- 17-11-2014 - Ms. Archana Wadhwa, Member (J) and Shri Rakesh Kumar, Member (T) Shri K.K. Anand and Ms. Sujata Shirloker Mehta, Advocates, for the Appellant. Shri Ranjan Khanna, Authorized Representative (DR), for the Respondent. ORDER The facts leading to filing of these appeals and stay applications are, in brief, as under. 1.1 M/s. Purni Tobacco Pvt. Ltd., Sinnar, Nasik, Maharashtra (hereinafter referred to as PTPL), engaged in manufacture of cigarettes chargeable to Central Excise duty under sub-heading 2403.11 of the Central Excise Tariff, are a franchisee of M/s. GTC Industries, Bombay (hereinafter referred to as GTC). The officers of the Directorate General of Central Excise Intelligence initiated inquiries in respect of PTPL and GTC in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944 of the land, building, plant and machinery of PTPL used in the manufacture of the clandestinely cleared cigarettes; and (c) imposition of penalty under Rule 209 or Rule 209A of Central Excise Rules, 1944 on Shri Sanjay Dalmia, Shri Anurag Dalmia, Shri J.P. Khetan and other noticees. 1.2.1 Along with the show cause notice a list of the relied upon documents was also enclosed, but it appears that while serving show cause notice the relied upon documents were not supplied. 1.3 The matter was adjudicated by the Commissioner, Central Excise (Adjudication), New Delhi in the year 2014 vide order-in-original dated 14-10-2013 by which he - (a) confirmed the duty demand of ₹ 46,51,87,192/- under Rule 9(2) of Central Excise Rules, 1944 read with proviso to Section 11A(1) of Central Excise Act, 1944 from M/s. GTC Industries Ltd. and PTPL. Nasik jointly and severally; (b) imposed penalty under Rules 9(2), 52A, 226 and 209 of Central Excise Rules, 1944, of ₹ 46,51,87,192/-, jointly and severally on GTC Industries Ltd. and PTPL and beside this, imposed a further penalty of ₹ 46 crores under Rule 209A of Central Excise Rules, 1944 on GTC Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the impugned order is not sustainable and that they have no objection if the matter is remanded to the Commissioner for de novo adjudication. 4. Shri Ranjan Khanna, the learned DR, defended the impugned order by reiterating the findings of the Commissioner. 5. We have considered the submissions from both the sides and perused the records. 6. In this case, it is the PTPL, Nasik, who was engaged in manufacture of cigarettes as a franchisee of GTC Industries. The Department s allegation is that PTPL, Nasik was nothing but a dummy entity or a front company floated by GTC for the purpose of duty evasion, that it is GTC who were fully controlling the activities of PTPL and that during the period of dispute, PTPL had received huge quantity of cigarette tobacco and other raw materials through GTC, which were used in manufacture of unaccounted cigarettes which were cleared clandestinely. These allegations are based on the statements of a number of witnesses and a large number of seized documents. Though alongwith the show cause notice, the list of documents had been enclosed, from the records it appears that when the show cause notices were served on PTPL, GTC and other notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 In view of this judgment of Hon ble Delhi High Court, the Adjudicating Authority while relying upon, for proving the allegation of duty evasion against an assessee, the statements of the persons whose cross examination has to be permitted, but the same could not take place as they are either not traceable or not coming for cross-examination or are dead or are incapable of giving evidence or kept out of the way by the adverse party or whose presence cannot be determined without an amount of delay of expense which under the circumstances of the case, the court considers unreasonable, has to give after hearing the assessee a specific finding as to whether the circumstances enumerated in Section 9D(1) for relying upon the statement of a person without cross examination exist or not. In the impugned order there is no discussion on this point. Section 9D(2) read with clause (a) of Section 9D(1) can be invoked only in terms of directions of Hon ble Delhi High Court in terms of its observations in para 32 of its judgment in case of J K Cigarettes Ltd. v. CCE (supra). In cases of witnesses not covered by clause (a) of Section 9D(1), where their cross-examination has been requested by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions in this order. 10. However, before parting with this matter, we cannot help expressing our anguish at the manner in which this matter involving duty of ₹ 46,51,87,192/- has been handled. The show cause notice in this matter has been issued on 2-3-1996 when there was no provision for charging interest on duty. Such a provision was introduced on 28th September 1996 by inserting Section 11AB and was applicable in the cases where short payment or non-payment of duty had occurred on account of fraud, wilful mis-statement, suppression of fact or contravention of the provision of Central Excise Act, 1944 or the Rules made thereunder with intent to evade the payment of duty. While in this case, the provisions of Section 11AB could not be invoked as the period for which the duty has been demanded is prior to 28th September, 1996, there was another provision - Section 11AA introduced w.e.f. 26-5-1995 which provided for charging of interest on duty demand confirmed under Section 11A(2) when the assessee failed to pay the duty demand confirmed within a period of three months from the date of adjudication order. This provision was applicable even in respect of the show cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een handled in a similar careless manner. Beside this, there is another matter against M/s Golden Tobacco Ltd. involving duty of ₹ 30,85,63,693/- for the period prior to September 1996 and dealt with in the Tribunal s order reported in 2012 (282) E.L.T. 385 (Tri. - Del.) which has also been handled in the same manner. There is also another matter disposed of vide Final Order Nos. 51450-51456, dated 6-3-2014 against Golden Tobacco Ltd, where the duty involved is ₹ 29,53,36,551/- which had also been handled in a similar manner, where the matter was adjudicated after a long delay of 18 years without supply of all the relied upon documents and the duty demands had been confirmed jointly and severally compelling the Tribunal to remand the matter for de novo adjudication. 10.2 We hope that this time, the Commissioner would ensure that de novo proceedings are completed strictly in terms of the Tribunal s directions. Since, this is a very old matter, the de novo proceedings must be completed within a period of six months from the date of this order. 11. The Registry is also directed to endorse a copy of this order to the Chairman, Central Board of Excise and Customs for h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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