TMI Blog2017 (12) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ciple of natural justice and such Order cannot be sustained - the matter needs to be remanded to the adjudicating authority with the direction to allow cross-examination of the witnesses as was sought by the Respondent and not allowed during the adjudication proceeding, so as to ascertain the correctness of the allegation of clandestine removal of goods based on such evidences - appeal allowed by way of remand. - Central Excise Appeal No.1554 of 2009-SM - Final Order No.A/13579/2017 - Dated:- 22-11-2017 - Dr. D. M. Misra, Member ( Judicial ) Shri A. Mishra, A.R. for the Appellant-Revenue Shri Paritosh Gupta, for the Respondent ORDER Per Dr. D. M. Misra This Appeal is filed by the Revenue against the Order-in-Appeal No. RKA/540/SRT-I/2009 dated 28.7.2009 passed by the Commissioner (Appeals), Central Excise, Customs Service, Surat I. 2. Briefly stated the facts of the case are that the Respondents are engaged in the manufacture of Dispersing Dyes and Intermediates falling under Chapter 38 of CETA, 1985. On visit to their unit by the DGCEI officers on 7.11.2006, several documents and records were seized under Panchnamas. The premises of M/s Snow Dye C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his contention that the statements of the Excise in-charge and the Director had not been retracted soon after furnishing the said statements before the Excise officers. The conclusion of the ld. Commissioner (Appeals) that these records seized from the premises might have been planted by disgruntled staff of business rival and since further corroborative evidences were not collected by the investigating officers, hence, not reliable is unwarranted and uncalled for inferences. The ld. Commissioner (Appeals) has failed to analyse the evidences that were collected and its reliability in confirming the demand against the Respondent. Further, observation of the ld.Commissioner (Appeals) is that since one of the pancha witness declared hostile, when the other Pancha witnesses was not available for cross-examination, the Panchnama became void, is bad in law. It is his contention that merely because the witnesses were not allowed cross-examination by the adjudicating authority, itself cannot be a ground to set aside the demand. It is his contention that at best, the ld. Commissioner (Appeals) should have directed cross-examination of these witnesses to ascertain the fact. It is his content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d based on these documents be set aside. Further, he has submitted that the ld. Commissioner (Appeals) after taking into consideration the other factors of non-examination of the consignees, procurement of raw materials and transportation of the goods etc. arrived at the correct conclusion that there was no removal of alleged quantity of dispensing agent from the Respondent's factory and consequently, dropped the demand. 6. Heard both sides and perused the records. This is a case of alleged clandestine manufacture and clearance of dispensing agent totally weighing 5,61,120 kgs. valued at ₹ 1,06,61,280/- involving total duty of ₹ 17,39,921/-, during the period April 2005 to October 2006. It is the argument of the ld. A. R. for the Revenue that during the course of visit to the premises of the Respondent on 24.11.2006, various documents and records had been seized from the premises of the Respondent. In the said seized documents, the evidences contained records A/24, A/25 and A/26, relate to manufacture and clearance of dispensing agent for the period April 2005, May 2005, August 2005, April 2006 to October 2006 had been recorded. On a comparison of the entries in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eized records, A/24, A/25 A/26 we have used the names of consignee such as M/s Jai Hanuman Dyes, M/s Asian Paints etc. only for personal accounting whereas the fact is that the dispersing agent was sold to different parties in piecemeal. For our accounting purpose, the total quantity cleared on a single day was recorded in such seized records showing our vehicle nos. On being asked regarding the rate at which such dispersing agent was cleared, I state that the dispersing agent was cleared at the price ranging from ₹ 18/- to ₹ 19/- per kg. I reconfirm that the clearances of the dispersing agent as indicated in A/24, A/25 A/26 (which are enclosed as Annexure to this statement) were made without payment of duty.Thus, dispersing agent weighing 561120 kgs. was cleared without payment of duty from our factory during the period 03/04/2005 to 20/10/2006. 7. Along with his statement, the details of clearance recorded in three seized records namely,A/24,A/25 and A/26 has been enclosed as Annexure to the said statement. Thereafter, the statement of the Director, who was present in the factory was also recorded by the officers. In his statement the Director stated as follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating authority. Therefore, to ascertain the reliability of the evidences tendered by the witnesses, it is necessary to subject them to the process of cross-examination by the adjudicating authority as requested by the Respondent. It is settled principle of law that cross-examination of the witness whose statement is relied upon becomes necessary so as to bring out the truth of the fact alleged and denial of cross-examination of the witness is violation of principle of natural justice and such Order cannot be sustained. Therefore, in the circumstances, and in the interest of justice to both sides, I am of the view that the matter needs to be remanded to the adjudicating authority with the direction to allow cross-examination of the witnesses as was sought by the Respondent and not allowed during the adjudication proceeding, so as to ascertain the correctness of the allegation of clandestine removal of goods based on such evidences. Needless to mention that a reasonable opportunity of hearing be allowed to the Respondent. All issues are kept open. In the result, the impugned Order is set aside and the Appeal is allowed by way of remand to the adjudicating authority. (Prono ..... 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