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TMI Blog2018 (9) TMI 1057X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings before both the lower authorities - in the interests of justice, it would be appropriate to remand the appeals filed by the assessees for de novo consideration to the original adjudicating authority. Appeal allowed by way of remand. - Appeal Nos. E/266-271/2012, E/283-288/2012, E/290-293/2012, E/CO/18-25,27,28/2012, E/42416-42419/2014, E/42421-42424/2014 - FINAL ORDER No. 42084-42107/2018 - Dated:- 17-7-2018 - Ms. Sulekha Beevi, C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Sri Sathuragiri Match Company, G. Nagarajan, V. Shenbagakumar, The President Match Company Versus Commissioner of Central Excise Service Tax, Madurai, Commissioner of Central Excise Service Tax, Madurai Versus The President Match Company, G. Nagarajan, R. Kaliraj, V. Shenbagakumar, K. Ramaraj, G. Ananthappan, Sri Sathuragiri Match Company, Raja Match Works, J. Srithar, G. Nagarajan, V. Shenbagakumar, Kanthakumar Match Works, Versus Commissioner of Central Excise Service Tax, Tirunelveli Shri S. Venkatachalam, Advocate For the Assessees Shri S. Govindarajan, AC (AR) For the Revenue ORDER Per Bench All these appeals since involving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive SCNs for demand of differential duty liability with interest thereon and imposition of penalties on the noticees therein. On appeal, proceedings involving President Match Co. and Sri Sathuragiri Match Co., the Commissioner (Appeals) vide orders impugned, reduced the demand of duty as also ordered setting aside / reduction of penalties imposed on various co- noticees. However, in respect of the proceedings against M/s.Raja Match Works and Kanthakumar Match Works the orders of the original adjudicating authorities were upheld by the Commissioner (Appeals) in the orders impugned. The details of the impugned orders and disputed amounts along with related appeals as submitted by the Ld. counsel are appended as under : Demand as per OIO Demand as per OIA Sl. No. Appeal No. Appellants Order in Original No Date Order in Appeal No Date Duty Penalty Duty Penalty Duty Penalty 1 E/269/12 The President Match Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10,00,000 - 25,000 10 E/266/12 Sri Sathuragiri Match Company 09/2010 CE dt.30.8.10 03-06/12 dt..17/1/12 4,27,061 4,27,061 11,30,337 11,30,337 4,27,061 4,27,061 11 E/267/12 G.Nagarajan 09/2010 CE dt.30.8.10 03-06/12 dt..17/1/12 - 50,000 - 11,30,337 - 50,000 12 E/268/12 V.Shenbagakumar 09/2010 CE dt.30.8.10 03-06/12 dt..17/1/12 - 50,000 - 11,30,337 - 50,000 13 E/290/12 CCE Madurai [against dropping of demand] 09/2010 CE dt.30.8.10 03-06/12 dt..17/1/12 7,03,276 - - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41/2013 CE dt.30.10. 13 91-100/14 dt.7/8/14 - 65,915 - 65,915 - 65,915 23 E/42424/ 14-DB V.Shenbagakumar 41/2013 CE dt.30.10. 13 91-100/14 dt.7/8/14 - 65,915 - 65,915 - 65,915 24 E/42422/ 14-DB J.Srithar 41/2013 CE dt.30.10. 13 91-100/14 dt.7/8/14 - 65,915 - 65,915 - 65,915 4. Today when the matter came up for hearing, on behalf of the assessees and the co-noticees, Ld. Advocate Shri S. Venkatachalam made common submissions as under: i) Impugned orders have been passed in violation of principles of natural justice. ii) Assessees in the cases involving Sri Sathuragiri Match Co. and other co-noticees have filed grounds of appeal running into 74 pages and 307 pages of documents and worksheets to disprove the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LT 195 (Mad.) has held that persons who gave statements and who are witnesses alone are liable to be cross-examined by the petitioner and that once certain reports or statements are relied upon in an enquiry, it is fundamental that the author of the report and the persons from whom such statements are allegedly recorded should be made available for cross-examination. Ld. Counsel also placed reliance of decision of Hon ble Punjab and High Court in the case of G-Tech Industries Vs UOI - 2016 (339) ELT 209 (P H) wherein the Hon ble High Court held that it is trite and well-settled position in law that statements recorded behind the back of an assessee cannot be relied upon, in adjudication proceedings, without allowing the assessee an opportunity test the said evidence by cross examining the makers of the said statements. v) The documents which have been referred to in the statements and copy of the SCN have nonetheless not been relied upon in the SCNs and in fact these documents have been returned to the assessee as unrelied. For example, in the statement dt. 21.01.2008 of Sri Shenbagakumar reference has been made to many documents such as S.Nos.1-1/2, 2/2, 22, 30, 2-3/3, 3-1/3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amely Shri R Kaliraj had maintained accounts of various units and he had written the accounts as per his convenience which only resulted in creating suspicion in the minds of investigating officers. It is settled law that suspicion howsoever strong cannot take the place of proof. Pocket note books relied upon are therefore totally unreliable. Therefore no evidence to prove that dipped splints were delivered to Raja Match works and Kanthakumar Match Works in excess of the accounted quantity. x) In respect of Raja Match Works and others, the demand in show cause notice is only for the periods March 2006 to February 2007 whereas in the chart furnished in page 17 of the SCN the period mentioned is April, July and August 2007. Hence there is a mismatch even in the computation of the demand. So also in the case of Kanthakumar Match Works and others, in the SCN the demand is only for the period December 2006 to February 2007 whereas in the chart furnished in pages 16 17 of the SCN, the period mentioned is April to July 2007. xi) It is submitted that along with normal brands manufactured by these assessees, they also manufactured matches for ITC Ltd. However, due to quality problem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account along with other matters made before this forum. 5. On the other hand, Ld. A.R Shri S. Govindarajan supports the impugned orders in respect of Raja Match Works and Kanthakumar Match Works. However, in respect of President Match Company and others, Revenue is aggrieved with the setting aside / reduction of penalties and also against reduction of duty liability. He also made the following submissions : i) In respect of M/s.Raja Match Works and M/s.Appu Colour Match Works, M/s.President Match Company had obtained permission from the jurisdictional Divisional Officer to send the dipped splints for conversion into match bundles and subsequent clearance on payment of duty. Unaccounted dipped splints were also sent for conversion. ii) M/s.Sri Rama Match Works and M/s.Universal Match Works purchased duty paid dipped splints and also received non-duty paid dipped splints. iii) The production arising from non-duty paid / unaccounted dipped splints was not accounted and cleared without payment of duty to M/s.President Trading Company, a part of the respondent s group, or accounted as hand-made matches in the accounts of M/s.Shanmugha Match Works for ultimate clearance to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of persons from whom statements had been recorded, only on the grounds that they were co-noticees. While there has been some attempt made by the lower authorities concerned in respect of The President Match Co. and Sri Sathuragiri Match Co. and analyse the contentions of the concerned noticees and evidence put forth, which has in fact resulted in rejection of some part of the duty demand, the upholding of the remaining portion of the duty demands by these authorities has been done without required level of analysis or reasoning. 6.2 In the case of Raja Match Works and Kanthakumar Match Works, we find that the entire dispute has been disposed of with a finding constituting just two paragraphs. If this is not peremptory disposal of appeals, without any application of mind, then what it is? 6.3 In the light of discussions and findings herein above, we are of the considered opinion that the appellants have not been given sufficient opportunity and consideration in the proceedings before both the lower authorities. This being so, in the interests of justice, it would be appropriate to remand the appeals filed by the assessees for de novo consideration to the original adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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