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TMI Blog2020 (1) TMI 1452X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, cross-examination of the witnesses is vital for proper appreciation of the issues involved. Matter remanded back to the adjudicating authority for de novo adjudication, upon affording the appellants to cross-examine the 19 persons and thereafter affording the appellants a personal hearing in the matter and an opportunity to make further submissions - appeal allowed by way of remand. - Excise Appeal No. 75579, 75580, 75581, 75672 & 75673 of 2014 - FINAL ORDER NO. 75386-75390/2020 - Dated:- 13-1-2020 - SHRI P. K.CHOUDHARY, MEMBER (JUDICIAL) AND SHRI P.ANJANI KUMAR, MEMBER (TECHNICAL) Dr. Samir Chakraborty, Senior Advocate Shri Abhijit Biswas, Advocate for the Appellant (s) Shri T. Mondal, Authorized Representative for the Respondent (s) ORDER The two sets of appeals arise out of two show cause notices dated 06.08.2012 and 26.05.2011, both issued by the Commissioner of Central Excise, Customs and Service Tax, Bhubaneswar-I, pursuant to search and seizure operations carried out by the Central Preventive Unit of the Commissionerate on 03.12.2010 in the factory as well as the residential premises of the appellants. The proceedings under the said sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly and cleared without payment of duty. (iv) Imposed penalty of ₹ 15 lakhs upon the appellant no. 1, as sole proprietor of the said firm, under Section 11AC of the Act read with Rule 17 of the Pan Masala Rules. (v) Imposed penalty of ₹ 5.00 lakhs on the appellant no. 2 under Rule 26 of the said Rules. 4. In the instant cases the said firm carried on the business of manufacture and sale of different brands of Pan Masala containing tobacco falling under Chapter Sub-headings 24039990 and 24039920 respectively of the First Schedule to the Central Excise Tariff Act, 1985. The brand of Pan Masala manufactured and sold by the said firm, commonly known as Mawa Masala , classifiable under CTH 24039990, was notified goods under Section 3A(1) of the Act and was therefore covered under the Pan Masala Rules and excise duty was liable to be paid thereon in the manner provided in the said Pan Masala Rules. The other brand of pan masala, commonly known as Khara Masala , classifiable under CTH 24039920, was however outside the purview of Section 3A(1) of the Act and, consequently, the Pan Masala Rules. 5. On December 3, 2010 the Officers of the Central Preventive Unit of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ines. The show cause notice also proposed imposition of penalties upon the appellant no. 1, as sole proprietor of the said firm, under Rule 17 of the Pan Masala Rules and Rule 25 of the said Rules read with Section 11AC of the Act and upon the appellant nos. 2 and 3 under Rule 26 of the Central Excise Rules. 8. In the show cause notice dated May 26, 2011 it was alleged that the appellant had operated the said six packing machines illegally and thereby appeared to have manufactured different brands of Pan Masala containing tobacco by using the said packing machines unauthorisedly, in contravention of the provisions of the Pan Masala Rules, rendering all the goods seized liable for confiscation under Rule 17 of the Pan Masala Rules read with Rule 25 of the said Rules. It was further alleged that the unaccounted packing materials seized in both the factory and residential premises of the appellant no. 1, along with the said 6 packing machines were used unauthorisedly for packing of pan masala containing tobacco in violation of Rule 6 of the Pan Masala Rules and therefore was liable to confiscation under Rule 25 of the said Rules read with Rule 17 of the Pan Masala Rules. It was fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenged the validity and legality of the impugned orders on merits on various grounds. They have also challenged the imposition of the penalties upon all the respective appellants by the impugned orders. 11. Mr. T. Mondal, A.R., appearing on behalf of the respondent reiterates the findings of the Commissioner in the impugned orders. 12. Heard both sides and perused the appeal records. 13. From the show cause notices we find that the case against the said firm of alleged clandestine operation of the sealed packing machines for manufacture of the subject goods during the entirety of the periods involved are primarily based on statements recorded under Section 14 of the Act by 14 workers of the said firm and the contractor who engaged them and 5 other persons. We also find that specific request, with reasons in support, was made by the said firm for cross examining the said workers and other persons. It is also seen from the impugned order that though the Commissioner relied upon the statements of the said 19 persons in the findings arrived at by him in the impugned order, he rejected the said request for cross examination by the said firm. 14. It is settled law that if t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. S.T., Rourkela, 2017 (7) GSTL 276 (Ori) has held as under, while quashing the adjudication order of the Commissioner impugned therein and remanding the matter for de novo adjudication: 11. In the present case, it appears that the main edifice of the case of the department rests on the statements of Mr. Tapan Chandra Dey and Soumendra Kumar Sahoo, who state that they got the Safal brand Gutkha of MRP ₹ 5/- from the petitioner. Since the petitioner has taken a stand that during course of investigation neither any pouch of MRP ₹ 5/- of Safal brand Gutkha was seized nor any machinery with capacity to manufacture of Safal brand Gutkha pouch of MRP ₹ 5/- was seized and that there was no seizure of any document/diary/note book/computer printout showing manufacture and clearance of Safal brand Gutkha of MRP of ₹ 5/- from the petitioner Unit, in the fitness of things the authorities should have allowed cross-examination of the above two persons to test the veracity of their statements. By not doing so, in our considered view there has been violation of principles of natural justice. The facts in Kanungo and Co. (supra) show that there the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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