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TMI Blog2019 (10) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... bestos Cement Pipes containing fly ash. The fly ash content on this basis would come to 13.8% which is much less than the required 25%. Though the appellant plead that out of total 55965.554 M.T. of cement received at Bhilwara Plant, the quantity of 19882.4 of the cement had been sent to manufacturing unit at Ahmedabad and as such 26671.35 M.T. of cement had been used during 2005-2006 for manufacture of 53995.6 M.T. of Asbestos Cement Pipes containing fly ash, no evidence in this regard has been produced which makes the assertion doubtful. The entire case of the Department is made on the basis of statements of the various persons, who have not been examined by the adjudicating authority while adjudicating the case and also the Appellants were not permitted to cross examined these witnesses and thus the impugned orders suffers from the inherent infirmity. Reliance placed on the decision of M/S G-TECH INDUSTRIES VERSUS UNION OF INDIA AND ANOTHER [ 2016 (6) TMI 957 - PUNJAB HARYANA HIGH COURT] and SWADESHI POLYTEX LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, MEERUT [ 2000 (7) TMI 85 - SC ORDER] wherein it is held that it is mandatory on the part of the adjudicating authority to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of by this order as the same is arising out of a common investigation conducted by the Directorate General of Central Excise Intelligence (DGCEI, for short). 3. The brief facts of the case are that the Appellant (formally also known as Shree Pipes Ltd.) are engaged in manufacture of Asbestos Cement Pressure Pipes falling under Chapter 68 of First Schedule to Central Excise Tariff Act used for conveying the drinking water. The Appellant Company is registered with the Central Excise Department. The Notification No. 6/2002-CE dated 1.3.2002 exempts the products of Chapter 68, if they contained fly ash not less than 25% by weight, subject to the condition of maintaining account of receipt and disposal of fly ash in a format prescribed by the Commissioner and furnishing a monthly return to the Assistant Commissioner in this regard. According to the Appellant company, during the period from December 2003 to March 2006, they were using fly ash more than 25% by weight in the manufacture of the said pressure pipes and were availing the exemption under the Notification No. 6/2002-CE. It is on record that the Appellant were procuring the fly ash from M/s Kota Super Thermal Power Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evident from the relied upon documents. 4.1 Learned Advocate categorically denied that any documents were snatched from the officer by the Appellant for their employee. In fact due to long detention of the factory workers by the excise team there was an altercation in which both the central excise officers and the works were injured. The criminal case filed by the Department against the workers has been dismissed by the Civil Judge Cum Judicial Magistrate First Class, East Bhilwara and Rajasthan. 4.2 Learned Advocate contends that the Appellant had been maintaining all the requisite records and also filed the required intimation and return as provided for in the Trade Notice No. 40/1007-CE (24-Misc.) dated 16.5.1997 issued by the Commissioner of Central Excise, Jaipur. More than 100 D-3 intimations regarding receipt of fly ash have been filed during the disputed period. The Commissioner, in the impugned order held that D-3 intimations were not required to be filed and were submitted only to avoid the case of detection and hence merits no consideration. But the Appellant has filed the D-3 intimation as per the procedure prescribed vide Trade Notice No. 40/1997. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment is about use of cement in lieu of fly ash relying upon the balance sheet for the period 2005-06. It is the submission of learned Advocate that a new unit was set up by the Appellant in Ahmedabad for manufacture of Asbestos and Asbestos cement. The Appellant maintained a consolidated balance sheet for both the units and the procurement of cement is mentioned therein was also both the Ahmedabad and Bhilwara Unit. The Appellant has also submitted an Auditor s Certificate to that effect, however, the same was not considered by the adjudicating authority. 4.7 The learned Advocate has also submitted that no reliance can be placed on the statements obtained under duress. The statements which were obtained from Shri Parasmal Mehta of M/s Robin Roadways, and Shri Dapran Jain of M/s Kaka Roadlines were retracted subsequently, which was not considered by the adjudicating authority. The Commissioner has placed reliance on these statements without giving opportunity of cross examination to the Appellant, placing reliance on the decision of CCE, Meerut Vs. Swadeshi Polytex Ltd. 2000 (122) ELT 641 (SC) and in case of G. Tech Industries Vs. Union of India 2016 (339) ELT 209 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notice. However, Commissioner has denied the same on the ground no such requests have been made which is not correct. The denial of cross-examination is in violation of the principles of natural justice especially when the records maintained by the Appellant do not reflect any discrepancy and benefit of exemption could not have been denied on the basis of third party evidence placing relied on the decision of Commissioner Vs. Motabhai Iron and Steel Industries 2015 (316) ELT 374 (Guj.). The learned Advocate has further argued that there is no requirement of physical weighment of each pipe for availment of exemption notification in terms of Circular No. 477/43/99-CX dated 10.8.2009 as they have used the standard weight of the final product, for computation of the fly ash consumption by weight. The circular merely clarified that the weight of the pipes has to be taken and not of in process wet pipes. The standard weight is the weight of the dry pipe and is in compliance of the said circular placing reliance on Hyderabad Industries Vs. CCE, Ranchi 2009 (244) ELT 113 (Tri.-Kolkata). It is also submitted that the length of Megnani pipes were incorrectly taken for computation of fly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Investigating Officers had conducted inquiries at the Kota Thermal Power Plant and Suratgarh Thermal Power Plant, that the statements of Shri Mahmood Ahmed, Assistant Engineer (ash handling and maintenance) and of Shri Vinod Kumar Agarwal, Assistant Engineer (CA-II) of the Kota Thermal Power Plant had been recorded, that it is clear from the statements of these two officials of Kota Thermal Power Plant, that they were responsible for the maintenance of ash handling plant and the ash dyke also, which contains slurry, that it is absolutely wrong to say that these two Assistant Engineers had no information about the lifting of ash from the ash dyke (ash pond), that both these persons in their respective statements have stated that during the period of dispute, no fly ash was lifted by the appellant company, that the appellant company had engaged three transporters for transport of fly ash from Kota Thermal Power Plant and Suratgarh Thermal Power Plant, that proprietors of these three companies in their respective statements have denied having transported the fly ash to the factory premises of the appellant company, that beside this, statements of 93 truck owners had also been recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iver from the requirement of pre-deposit. 6. We have considered the submissions from both the sides and perused the case record. 7. The appellant are manufacturers of AC Pressure Pipes. The raw material for Asbestos Cement Pressure Pipes is Asbestos fibre and cement. However, as per ISI specification ISI 592-2003 for Asbestos Cement Pressure Pipes and Joints, fly ash can be used upto 40% by weight to replace the Portland cement. Notification No. 6/02-CE dated 01/3/02 (Sl. No. 158) exempts the products falling under Chapter 68 of the Central Excise Tariff made by using not less than 25% by weight of fly ash or phosphor gypsum or both subject to condition that the assessee maintain a record of receipt and use of the fly ash in the format prescribed by the Commissioner and also file a monthly statement to the Jurisdictional Central Excise authorities regarding receipt and consumption of the fly ash. There is no dispute that the appellant were not availing of this exemption in respect of the AC Pressure Pipes made without the use of fly ash. The dispute is in respect of manufacture and clearance of AC Pressure Pipes during the period from December 2003 to March 2006, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, on inquiry with Shri Nath Computerised Dharamkanta slips produced by the appellant company have been found to be fake and as per the records of Shri Nath Computerised Dharamkanta, the weighment slips of the same numbers had been issued in the name of totally different parties ; (4) Statement of Shri Lila Ram Sabnani, owner of M/s Shri Nath Computerised Dharamkanta wherein after perusing and comparing the weighment slips submitted by the appellant company with daily weighment sheet of his Dharamkanta, he stated that the trucks covered by the computerised weighment slips submitted by the appellant were not weighed on his Dharamkanta since the same were not mentioned in daily weighment detail sheets ; (5) Statement of 93 truck owners in whose trucks the transportation of fly ash had been shown by the appellant company from Kota/Suratgarh Thermal Power Plant to their factory premises at Bhilwara. In all these statements, the 93 truck owners have stated that they had not transported any fly ash for the appellant company ; (6) Statements of Shri Paras Mal Mehta, Proprietor of M/s Robin Roadways, Bhilwara, Shri Darpan Jain, Proprietor of M/s Kaka Roadl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een retracted as a result of which their cross examination were absolutely necessary, but since their cross examination has been refused, no reliance can be placed on their statements. Other pleas of the appellants are that (1) calculation of percentage of fly ash in AC Pressure Pipes during 2005-2006 is wrong as the cement used in Ahmedabad plant of the appellant company has also been treated as used in the Bhilwara plant; (2) discrepancy in Dharamkanta slips is only in respect of 197 slips for period from November 2005 to March 2006 and (3) FIR lodged by the Department against the employee of the appellant company of having obstructed the search has been dismissed by the Judicial Magistrate. 10. We find that Shri Parasmal Mehta of M/s Robin Roadways, Shri Darpan Jain of M/s Kaka Roadlines and Shri Jai Kumar Singhvi, Proprietor of M/s Sanghvi Transport in their respective statements had clearly stated that no fly ash had been transported by the trucks of their transport company for the appellant company. Though Shri Parasmal Mehta and Shri Darpan Jain have subsequently retracted their statements, the fact remains that their statements are corroborated by the statements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the Department is made on the basis of statements of the various persons, who have not been examined by the adjudicating authority while adjudicating the case and also the Appellants were not permitted to cross examined these witnesses and thus the impugned orders suffers from the inherent infirmity. In this regard we place reliance on the decision of G. Tech Industries (supra) and Swadeshi Polytex Ltd. (supra) wherein it is held that it is mandatory on the part of the adjudicating authority to examine the witnesses whose statements have been relied upon and thereafter these witnesses are required to be subjected to cross examination by the Appellant. Accordingly, the impugned order is not legal and proper. However, we find that the Department s case is also not without basis as enough evidence has been collected against the Appellant which needs to be verified by the adjudicating authority before fastening the Central Excise duty of that magnitude and also imposition of penalty on the other appellants. This has not been followed. 14. In view of above, we are of the opinion that the case needs to be remitted back to the adjudicating authority so as to follow mandato ..... X X X X Extracts X X X X X X X X Extracts X X X X
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