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TMI Blog2019 (11) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 7.17 crore is not sustainable - the confiscation of currency of ₹ 4.38 crores approximate is not sustainable - therefore, penalties are also not imposable interest is not recoverable. Appeal allowed - decided in favor of appellant. - Excise Appeal No.70121 of 2019-[DB] - FINAL ORDER NO-71846/2019 - Dated:- 5-11-2019 - HON BLE SMT. ARCHANA WADHWA, MEMBER (JUDICIAL) AND HON BLE MR. ANIL G. SHAKKARWAR, MEMBER (TECHNICAL) Shri Anurag Mishra And Ms Pragya Pandey, Advocates for the Appellant Shri Rajeev Ranjan, Authorised Representative for the Respondent ORDER PER: ANIL G. SHAKKARWAR The present appeal is directed against Order-in-Original No. LKO/EXCUS/000/COM/EX/040/16-17 dated 06/02/2017 passed by Commissioner of Central Excise Service Tax, Lucknow. 2. Brief facts of the case are that appellants, during the relevant time, were engaged in the manufacture of Pan Masala Gutkha bearing the brand name Shyam Bahar falling under Chapter Heading No.24.04 of first schedule to Central Excise Tariff Act, 1985. Officers of DGCEI conducted simultaneous searches at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the said order dated 23.03.2007 before this Tribunal. The said six appeals were disposed of through a common Final Order No.769-774/2011-EX dated 12.08.2011. It was submitted before this Tribunal that the entire case was based on some details regarding booking of consignments in the records of 3 transport companies i.e. M/s Sitapur-Kanpur Transport Company (SKTC), M/s Haji Transport Goods Carrier (HTGC) and M/s Narain Transport Freight Carrier (NTFC), that all the sales of appellant were at factory gate and the consignment in respect of which the duty was demanded had been booked by the customers of the appellant to whom the goods were sold at the factory gate on payment of duty, that there is no evidence that the consignments declared to be of Shyam Bahar , Zarda and Masala etc. whose details are mentioned in the GRs issued by the said 3 transport companies had been booked by the appellant, that at the time of search of factory premises of appellant except for excess stock of Gutkha valued at ₹ 85,008/- no other discrepancy in the account of raw material has been deducted, that as regards the cash of ₹ 4,38,80,530/- seized from the factory-cum-residential premi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thlesh Kumar of M/s. HTGC, Shri Dhirendra Shukla of M/s. DG, the concerned person of SIIR, New Delhi and some traders - Shri Mahesh Chaurasia of M/s. Shanker Traders, Lakhimpur and Shri Shiv Kumar Jaiswal of M/s. Jaiswal Stores, Sitapur. However, perusal of the impugned order does not indicate that their cross examination has been allowed. The request for cross examination has been rejected on the ground that the person sought to be cross examined are co-noticees who can not be compelled to appear for cross examination, which is incorrect as partners and employees of M/s. SKTC, employees of M/s. HTGC, and Chemical Examiner of SIIR whose cross examination had been sought along with others, are not co-noticees. The cross examination of the proprietors/partners and employees of the transport companies is necessary to ascertain as to on what basis they have stated that all the consignments where the description of goods in the GRs/Lorry challans was mentioned as Zarda , Masala , or Shyam Bahar were of Shyam bahar gutka manufactured by M/s. ST and received directly from the factory of M/s. ST. Cross examination of Shri Dhirendra Shukla of M/s. DG is necessary for ascertaining as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed goods, if still available, tested through CRCL and taking that test report also into account after permitting the cross examination of the Chemical Examiner; if requested. If, however, the witnesses whose statements have been recorded under Section 14 of the Central Excise Act, 1944 by a Gazetted Officer and the same are relied upon by the Department, and due to the circumstances enumerated in Section 9D(l)(a), their cross-examination is not possible, in terms of the provisions of Section 9D(i) read with Section 9D(2), the same can be admitted as evidence provided the procedure and the principles laid down in this regard by Hon ble Delhi High Court in its judgment dated 18-8-2009 in case of M/s. J K Cigarettes Ltd., 2009 (242) E.L.T. 189 (Del.) = 2011 (22) S.T.R. 225 (Del.) M/s. GTC Industries Ltd. Others v. C.C.E. [2009 (242) E.L.T. 189 (Del.)] are followed. 8. As discussed above, the question of confiscation of currency of ₹ 4,38,80,530/- seized from the residential-cum-factory premises of M/s. ST under Section 121 of the Customs Act, 1962 read with notification No. 68/03-C.E., dated 4-5-1963 issued under Section 12 of the Central Excise Act, 1944, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 85008 pouches of gutka seized from factory premises of M/s. ST for non-accountal and penalty on them on this count is set aside and the matter is remanded to Commissioner for de novo adjudication keeping in view our observation in para-8 of this order; (c) confiscation of supari seized from M/s. DG and penalty on M/s. ST under Rule 25 for non-accountal of supari and penalty under Rule 26 of Central Excise Rules, 2002 on Shri Dhirendra Shukla, Proprietor, M/s. DG is set aside; and (d) Penalty under Rule 26 of the Central Excise Rules, 2002 on M/s. SVOL, Shri Sanjiv Mishra Shri Pratyoosh Mishra, Directors of M/s. SVOL is set aside. 9.1 Since the matter is about eight years old and huge revenue stakes are involved, the Commissioner is directed to complete the de novo adjudication proceedings as early as possible. The Appellants are also directed to fully co-operate with the Department in this regard. 3. The said Final Order dated 12.08.2011 was challenged by revenue before Hon ble Allahabad High Court at Lucknow Bench. The said appeal filed by revenue was dismissed by Hon ble Allahabad High Court in Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order passed by the Appellate Tribunal is hereby confirmed. It is open to the parties to appear before the adjudicating authority who shall proceed in accordance with law. 9. With the aforesaid observations, the appeal is dismissed. 4. The impugned order was passed as a consequence of the said directions through the order dated 12.08.2011 passed by this Tribunal merged in the order dated 21.01.2016 passed by Hon ble Allahabad High Court. The relevant parts of the finding of impugned order are reproduced bellow:- 6.1 I have carefully gone through the Show Cause Notice dated 20.10.2004, Order-In-Original dated 15.02.2007, the observations and findings of the Hon ble Tribunal in their order dated 12.08.2011 and the order of the Hon ble High Court as narrated above. In view of the judgment of the Hon ble High Court, the Final Order dated 12.08.2011 has achieved finality and consequently, as per the directions of the Hon ble Tribunal the issues relating to confiscation of seized goods, confirmation of demand of duty on the finished goods removed clandestinely from the factory and confiscation of sale proceeds al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 55,60,612/-. Further, equal penalty was imposed on the appellant. The seized cash of ₹ 4,38,80,530/- was confiscated by the Original Adjudicating Authority. Aggrieved by the said order, appellant is before this Tribunal. 5. Heard Shri Anurag Mishra and Ms Pragya Pandey both learned Advocates on behalf of the appellant. They made following submissions:- a) The present remand proceedings were under the directions that the appellant will be provided the opportunity to cross-examine the proprietors, partners and employees of transport companies, Shri Dharmendra Shukla of Ms Dharmendra Grinding, Chemical Examiner of SIIR. It was also provided that the cross-examination of any other witness shall also be provided if their statements were relied upon by the department and the request in this regard has been made by the appellant. Therefore, it is apparent from the order of the Appellate Tribunal that the appellant was not required to make any request in respect of proprietor, partners and employees of transport companies including the Chemical Examiner of SIIR. It was also not required for the reason that the appellant has already requested for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants namely M/s Shyam Vanaspati Oil, Shri Sanjiv Mishra and Shri Devendra Shukla. The denovo proceedings were only in respect of M/s Shyam Traders and M/s Sitapur Kanpur Transport Company. The Act of the learned Commissioner clearly proves that the learned Commissioner has failed to appreciate the order of the Appellate Tribunal and Hon ble Allahabad High Court. More importantly the learned Commissioner has admitted the fact that the letters of personal hearing were sent through Speed Post which were returned back with different remarks by the postal authorities.. The learned Commissioner has not made any other effort to serve the letter to the appellant especially when the case was remanded back with a specific direction. The learned Commissioner has also failed to appreciate that the appellant was not required to give any request for cross-examination in respect of the persons whose cross-examination has already been allowed by the Appellate Tribunal. The request for the cross-examination of the other persons could have been provided if the letter of personal hearing was served to the appellant. d) The learned Commissioner has admitted that allegation of cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustries Vs Union of India report at 2016 (339) ELT 209. The learned Commissioner has not given any consideration to the said specific direction and the statements were not testified by doing cross examination in chief which has to be done. The learned Commissioner has made a grave mistake by reiterating the submission and the findings made by the earlier Commissioner in his order dated 15.02.2007 which was set aside by the Hon ble Triubnal. g) In the present case the charges of clandestine removal were based on third party documents and on the statements which were recorded at the back of the appellant. The said statements were not only contrary; but based on incorrect facts. The appellant in their earlier submission requested for the cross examination because the statements were obtained under pressure and duress and based on incorrect facts. The said submissions were appreciated by the Appellate Tribunal and the appellant were allowed for cross examination of such witnesses. The learned Commissioner has not conceded with the said direction of Hon ble Tribunal and High Court and, therefore, in absence of cross examination and cross examination in chief as directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny is liable to be set aside and the said seized currency should be returned back to the appellant along with interest thereon. The currency was seized in the year 2003 and was lying with the department since then and the department is enjoying the benefits of the said seized currency. The said currency ought to be returned back to the appellant along with interest from the date of its seizure till the date of return. j) It is further submitted that the entire demand is based on third party document i.e. transport receipt and GR s. In view of the cited precedents the charges of clandestine removal cannot be based solely upon oral statements and third party documents. The other corroborative evidences in the form of consumption of raw material, transportation of raw material, its actual use in the manufacturing of goods, production capacity, extra labour force, extra consumption of electricity and evidence of removal of finished goods from the factory of the assessee and the receipt of payment has to be adduced to prove the charges of clandestine removal. In the present case no document relating to clandestine removal has been recovered from the factory premises of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 016 passed by Hon ble Allahabad High Court and case records, we note that as directed by Hon ble Allahabad High Court it was responsibility of the Original Adjudicating Authority i.e. Commissioner to insure that the 25 persons whose cross examination was sought through the letter dated 05.02.2006 were presented for cross examination by the appellant. The said requirement was dealt with by the Original Adjudicating Authority through para 6.2 of the impugned Order-in-Original wherein he has sent a letter dated 22.11.2016 to 6 appellants and informed them that the case was posted for hearing on 08.12.2016. The impugned order does not indicate that the Original Adjudicating Authority has put in any efforts to present 25 prosecution witnesses before the appellants for cross examination. We, therefore, hold that directions of the Hon ble Allahabad High Court through their judgment dated 21.01.2016 were not followed by the Original Adjudicating Authority. It was clearly observed in the said Final Order dated 12.08.2011 that the cross examination of partners and employees of M/s SKTC, M/s HTGC M/s NTFC which was the transport companies were necessary to ascertain as to on what basis they ..... X X X X Extracts X X X X X X X X Extracts X X X X
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