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TMI Blog2022 (3) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... ate diary of the Managing Director of the Company could have been a basis for passing the impugned order or not. As per Aparesh Kumar Singh, J HELD THAT:- The order of learned Tribunal cannot be sustained in the eye of law. It is accordingly set aside. The substantial questions of law framed for adjudication in this appeal are accordingly answered in favour of the Appellant Assessee. Let the Lower Court Records be sent to the concerned Tribunal and Authorities. As per Anubha Rawat Choudhary J HELD THAT:- It can be concluded as follows:- i. the statement recorded under Section 14 is per-se admissible in evidence by the adjudicatory authority under Central Excise Act, 1944 subject to scrutiny by the adjudicating authority in the light of Section 24 of the Indian Evidence Act. ii. Such scrutiny is required to be done by the adjudicating authority on the basis of materials available before him including the evidences collected and statements recorded under Section 14, before relying upon such statements and treating them as relied upon evidence while issuing show-cause notice. iii. Upon scrutiny under Section 24 of the Evidence Act, such statement recorded un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Indian Evidence Act and equally the duty of the adjudicating authority to exclude it even suo-moto if the vitiating circumstances appear from the records, as Section 24 of the Evidence Act uses the word appears to the court . When the noticee alleges that the statement recorded under Section 14 of the Act of 1944 was a result of threat or undue pressure of the authority, he must prove his allegation to be true, though the burden of this proof on the noticee is not very heavy, but certainly such allegation should be based on some material. vii. Admittedly in the instant case no request was made before the adjudicating authority to cross examine any witness whose statements were recorded under section 14 of the Act of 1944 including that of the Managing Director of the appellant company. Admittedly no objection whatsoever was made in connection with the relied upon statements before the adjudicating authority and there was no material before the adjudicating authority to discard the statements in the light of Section 24 of the Evidence Act. The retraction by the Managing Director for the first time at appellate stage after expiry of more than four years was clearly an aftert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1944 or there was further material to confirm the demand against the appellant? vi. Whether the entries made in private diary of the Managing Director of the Company could have been a basis for passing the impugned order against the appellant? Case of the Appellant: 3. Appellant is engaged in manufacture of Alloy Steel Ingots (SH 7224) and Non-Alloys Steel Ingots (SH 7206). The appellant is also engaged in the manufacture of CTD bars and rods (SH 721490). The chronology of dates and events, as per the appellant, relevant for adjudication of the appeal, are as under: 07.09.2001: On 07.09.2001, Central Excise Officers conducted a search at the factory premises of the appellant. It is pleaded that no incriminating materials were recovered. Stocks of raw materials and finished goods were also taken and no discrepancies were noticed. Searches were also conducted on 07.09.2001 at their office premises where one private diary (Ambassador maroon colour) relating to the year 2000-01 and 2001-02 written by Shri Hari Krishna Budhia, Managing Director, was seized which purportedly contained entries for the period 12.01.2001 to 05.09.2001, as per para 2.0 of the sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the cover of proper excise invoice only, as per para 3.0 of the show-cause notice. This itself proved that the entries in the private diary were not related for clandestine removal. On the contrary, statements of Shri Budhia before the Commissioner (Appeals) and learned Tribunal that the extra entries were related to offers, negotiations, etc. which never materialized, stands proved. 22.02.2002: The Additional Commissioner of Central Excise, Jamshedpur issued show-cause notice on 22.02.2002 demanding central excise duty of ₹ 12,50,107/- under section 11A(1) / 11A(2) of the Act along with interest under section 11AB and proposed penalty under section 11AC / Rule 173Q of Central Excise Rule, 1944 read with Rule 25 of the Central Excise Rules, 2001. It required the appellant to show cause as to why an amount of ₹ 10,68,298/- collected during investigation, should not be confirmed. Shri Hari Krishna Budhia was also required to show-cause as to why a penalty under Rule 209A of Central Excise Rules, 1944 read with Rule 26 of C.E.R., 2001 should not be imposed upon him for his purported abetment in the offences of the appellant Company. It was alleged that Shri Bud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner (Appeals) in purported exercise of powers conferred under section 35A (3) of the Act issued a show-cause notice on 29.09.2005 proposing enhancement of penalty under erstwhile Rule 209A of the C.E.R, 1944 and Rule 26 of the C.E.R., 2001. 07.12.2005: The appellant made his submission dated 07.12.2005 vehemently disputing and denying each and all allegations. It was contended that the entries in the private diary did not relate to any clandestine removal, but contains a schedule of work, negotiation with buyers, offers from buyers, etc., some of which never materialized or partly materialized. Aforesaid facts are not disputed by the Respondent in their counter affidavit dated 10.05.2019. 29.12.2005: The Commissioner (Appeals) vide Order-in-Appeal dated 29.12.2005 upheld the Order-in-Original. In respect of Mr. Hari Krishna Budhia, it was held that existence of mens rea on his part is in doubt which was upheld by the learned Tribunal. However, penalty on Hari Krishna Budhia under Rule 209A was enhanced to ₹ 20,00,000/- from ₹ 20,000/- which was reduced by the learned Tribunal to ₹ 20,000/-. Penalty of ₹ 20,000/- under Rule 173Q of C.E.R, 1944 / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iece of material due to non- compliance of the mandatory conditions of section 9D of the Act. According to him, under section 9D(1)(b) read with section 9D(2) of the Act, statement made before the Central Excise Officer during the course of any inquiry or proceeding under section 14 the Act shall be relevant for the purpose of proving the truth of the facts only when the person who made the statement is examined as a witness before the Adjudicating Authority and the Adjudicating Authority is of the opinion that having regard to the circumstances of the case, the statement should be admitted in evidence. According to him, provisions of section 9D (2) is applicable to quasi-judicial / adjudication proceedings under the Act, so far as may be, as it applies before the Court. Section 9D being mandatory in nature, cannot be dispensed with. Therefore, unless the statements made under section 14 are tested in accordance with section 9-D, it cannot be admitted into evidence. Such statements have to be eschewed. Rigors of section 9D (1) (b) can be waived only under exceptions carved out under sub-section 1(a) of section 9D when the person who made the statement is dead or cannot be found or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the consistent line of interpretation of section 9D is that the protection of section 9D is mandatory in nature. Learned counsel for the appellant submits that the decision in the case of 2019 (368) E.L.T 710 (Tri-Del) wherein it has been held that the statement recorded under section 14 of the Act is a substitute of examination- in-chief and therefore, without further examination-in-chief, witness can be offered for cross-examination, is per incuriam being passed in ignorance of the relevant statute or binding precedent and has no evidentiary value. Learned counsel for the appellant has further argued in support of the aforesaid proposition that in such an eventuality, if a witness is said to be examined in chief by making a statement under section 14 but not allowed to cross-examine, it would amount to giving up the witness by the Revenue. Converse is also true. A witness who is not examined in chief but offered for cross-examination, would also amount to giving up the witness. Reliance has been placed upon the case of Sukhwant Singh (Supra). 9. The second substantial question of law inter-alia whether the finding of learned Tribunal that the duty demand was never ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst challenging the taxability before the Commissioner (Appeals) who is also an Assessing Authority. 10. In the instant case, the taxability has undisputedly been challenged before the Commissioner (Appeals) which is evident from the reply dated 07.12.2005. In this regard, reliance is placed upon the provisions of section 35 and 35B of the Act and the decision of the Apex Court in the case of MIL India Ltd. Versus Commissioner of Central Excise, Noida [(2007) 3 SCC 533, para 2 4]. According to the appellant, in the defence reply dated 07.03.2005, appellant took five alternative pleas that, (a) they are entitled to the benefit under section 11A(2)(B) as they have already deposited ₹ 10,68,298/-, (b) quantification of the demand is not correct, (c) the entire demand of ₹ 12,50,107/- is not sustainable, (d) the burden of proof is on the department which has not been discharged and (e) amount of ₹ 10,68,298/- is a deposit and not payment of tax. It is the submission of the appellant that on inquiry, the buyers did not accept the correctness of 71 entries of purported clandestine removal. Hence, correctness of the entries in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut authority of law and is merely a deposit made under protest and such collection is without authority of law. In the aforesaid background, mere deposit of any amount during the investigation before issuance of show cause notice, an adjudication order, cannot be treated as admission of the charge. The liability to duty had to be determined in accordance with section 11A (1) and 11A 2) of the Act by following the due process of law. No duty or tax can be collected save by authority of law, as per Article 265 of Constitution of India. Learned counsel for the appellant has placed reliance upon the following decisions in support of the aforesaid submissions. i. (1997) 5 SCC 536, para-92: Mafatlal Industries Ltd others vs. Union of India others ii. 2017 (350) E.L.T 145 (Del): Digipro Import Export Pvt. Ltd. vs. Union of India iii. 2019 (365) E.L.T 32 (P H): Concepts Global Impex vs Union of India 12. The fourth substantial question of law framed for adjudication in this appeal is as under: Whether the fact that the penalty imposed by the adjudicating authority upon the Managing Director of the Company, having attained finality, can itself be used against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Shri Budhia was of purported maintenance of records. The Department itself has treated them to be two separate entities and not one being the agent of the other by initiating separate proceedings. Therefore, when the parties are different, issues are different and reliefs claimed are different, no question of any finality would arise. Learned counsel for the appellant has relied upon the decision of the Apex Court in the case of Sarva Shramik Sangh Versus Indian Oil Corporation Limited and others [(2009) 11 SCC 609, para-28]; The Commissioner of Central Excise, Chennai I Commissionerate Vs. B.S. Garg and Ors [2016 (339) E.L.T 518 (Madras] and State of Rajasthan Versus Nemi Chand Mahela and others [(2019) 14 SCC 179] . He has also relied upon a Constitution Bench judgment of nine Judges in the case of State Trading Corporation of India Ltd. Versus Commercial Tax Officer and others [AIR 1963 SC 1811, para-23]. Learned counsel submits that therefore, the instant question has to be answered in favour of the appellant. 13. The fifth substantial question of law is to the following effect: Whether the impugned order was passed solely on the statement of the Managing D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., Ahmedabad [2013 (296) E.L.T 392 (Tri- Ahmd.)] which stood affirmed up to the Supreme Court as reported in Micro Inks Ltd. Vs. Commissioner of Central Excise, Daman [2015 (319) E.L.T 117 (SC)]. 14. The last and sixth substantial question of law is whether the entries made in private diary of the Managing Director of the Company could have been a basis for passing the impugned order against the appellant? It is the categorical submission of learned counsel for the appellant that the findings of the learned Tribunal is entirely based on the private diary without any corroborative evidence obtained through independent inquiry. Therefore, such a serious charge of clandestine removal cannot be sustained merely on the basis of entries in the private records which is denied by the buyers. Learned counsel for the appellant has placed reliance upon the following decisions in support of his submission. i. 2011 (271) E.L.T 184 (Pat): Commissioner of Central Excise Vs. Brims Products. ii. 2013 (287) E.L.T 243 (Gujarat): Commissioner of C. Ex. Cus. Service Tax Vs. Vishwa Traders P. Ltd. iii. 2015 (318) E.L.T 487(Tribunal-Ahmadabad): Suzuki Synthetics Pvt Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 8 mm, 12 mm, 16 mm and 20 mm mentioned randomly showed that it related to CTD bars and rods. Prima facie, it appears that majority of such dispatches were clandestine in nature as figures did not match in the books of accounts. (iv) On scrutiny of the notings of the diary with the corroborative records of dispatch / sales, it revealed that the Assessee had made dispatch of CTD bars and rods to the buyers during the period 12.01.2001 to 05.09.2001, wherein in majority of the cases, same were not issued under the cover of Central Excise Invoice. Where invoices were found to have been issued, the Assessee had quoted wrong price as in the Central Excise Invoice, prices were lower than what was noted in the said diary, resulting in under valuation of the so dispatched excisable goods and short payment of duty of central excise thereon. From the notings of the said diary, and in the inquiry / investigation, it was revealed that dispatches were made to the following buyers of the Assessee. i. Jharkhand -M/s Jharkhand Steel, Upper Bazar, Ranchi ii. Kavita -M/s Kavita Steel, Ratu Road, Ranchi iii. Ashish -M/s Ashish Steel, Upper Bazar, Ranchi iv. Pravin -M/s Pravi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 3,94,696/- during the period 2000-01. 18. Further, from the notings in the said diary, it revealed that during the period 01.04.2001 to 05.09.2001, out of altogether 55 dispatches shown in the diary, 50 were shown being made without payment of central excise duty amount assessed to ₹ 8,39,962/-, whereas five dispatches were shown as short paid duty amount assessed to ₹ 15,449/-, total amounting to ₹ 8,55,411/- during the period 01.04.2001 to 05.09.2001 corresponding to the period 2001-02. 19. The Assesse meanwhile deposited the differential duty of CTD bars to the tune of ₹ 36,023/- and differential duty on CTD bars for the period 2001-02 to the tune of ₹ 7,32,275/-. Intimation was given on 29.11.2001. Learned counsel for the Respondent Revenue submits that suo- motu payment of differential duty on CTD bars and rods for the period 2000- 01 and 2001-02 are conclusive evidence of evasion of duty for the reason that it shows an existing liability by way of differential duty with the Assessee. That such liability occurred due to earlier non-payment / short payment of duty. Further, the Managing Director Shri Budhia had agreed to examine the issue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhia, Managing Director of the Appellant Company. The Assessee / Appellant went in appeal before the Commissioner (Appeals) under section 35 of the Act, reiterating his contentions being aggrieved by the Order-in-Original. Learned Commissioner (Appeals) in exercise of the power conferred under section 35A (3) of the Act issued show-cause notice dated 29.09.2005 upon Shri Budhia proposing enhancement of penalty under Rule 209A of C.E.R, 1944 read with Rule 26 of C.E.R, 2001. Upon consideration of the submissions and the grounds taken by the appellant in the Memo of Appeal and the materials on record, the Commissioner (Appeals) vide Order-in-Appeal dated 29.12.2005 upheld the Order-in-Original. At the same time, penalty on Shri Budhia was enhanced to ₹ 2,000,000/- from ₹ 20,000/- under Rules 209A of C.E.R., 1944. However, penalty of ₹ 20,000/- under Rule 173Q of C.E.R., 1944 read with Rule 25 of C.E.R., 2001 on the Company and penalty of ₹ 10,77,678/- on Mr. H.K. Budhia, Managing Director were however dropped. 23. It is contended that the appellant preferred appeal before the learned Tribunal against the order passed by the Commissioner (Appeals). Learned T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for the Respondent submits that contention of the appellant that the order is based only on the basis of the entry in the private diary, is not correct. In fact, a detailed entry-wise examination was done during the course of investigation and the entries made in the diary was also corroborated by the admission of the Managing Director in his statement recorded under section 14 of the Act that the same must have occurred inadvertently. On the specific plea raised by the appellant regarding compliance of the provisions of section 9D of the Central Excise Act, 1944, it is submitted that at no point, such a plea was raised by the appellant either before the Adjudicating Authority or in the subsequent appeals. This ground has been taken up for the first time before this Court and, therefore, neither the Adjudicating Authority nor the Appellate Forum have discussed this issue in their order. Reference is made to the decision of the Apex Court in the case of Modern Insulators Limited versus Oriental Insurance Company Limited [(2000) 2 SCC 734]. It has been held that in an appeal, the parties cannot urge new facts. It is emphatically asserted by the Respondent that Mr. Budhia or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28. The conspectus of facts borne from the records and as pleaded by the parties show that the present appeal by the Appellant Company arose from a proceeding initiated against the Appellant-Assesse engaged in the manufacture of ingots as well as non-alloy steel falling under Chapter-72 of the Central Excise Act, 1985, on the basis of a search operation in the factory of the Appellant and other connected premises. In course of search on 07.09.2001 by the officers of Central Excise, Headquarters (Preventive), Jamshedpur, some incriminating documents were recovered which created an impression that the Assesse had indulged in clandestine removal of goods namely CTD bars and rods of both non-alloy steel and alloy steel falling under Chapter sub-heading 7214.90 and 7228.30 of Central Excise Tariff Act, 1985 (in short CETA, 1985 ) respectively without the cover of central excise invoices and without payment of duty. It also appeared that in some instances, the Assesse had resorted to modus operandi of undervaluation by substituting the rates of such goods with an intent to evade payment of duty of central excise amounting to ₹ 12,50,107/-. During the course of search at the factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw Material Register, Invoice Books, etc. were called for examination. Shri Prem Shankar Mishra, Administrative Officer of the Assesse, Shri S.K. Jaiswal, Sr. Accounts Officer, BFCL, Shri A.D. Singh, Assistant, Excise and Dispatch Section of the Assesse and Abdul Kalam, Production Manager of the BFCL recorded their statement under section 14 of C.E.A., 1944 which revealed that procurement of raw materials and sale of finished goods and rates thereon as well as selection of buyers were all done by the Managing Director Shri Hari Krishna Budhia. Shri H.K. Budhia was summoned during the course of investigation and his statement was recorded on 15.11.2001 under section 14 of C.E.A., 1944. Shri Budhia stated that he looked after the work related to dispatches and purchases starting with finalization of rates, party, quantity as also payment. The notings in the diary were accepted by him as in his own handwriting. When asked about the dispatches not covered under invoices, he replied that he had no idea, but added that if at all that was a fact, it must have occurred inadvertently. He undertook to examine the issue and agreed to pay duty difference in cases where rates were in the higher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise, Jamshedpur thereafter issued show-cause notice upon the Assesse, alleging evasion of central excise duty and undervaluation of central excise duty amounting to ₹ 12,50,107/-. It was also indicated that after deposit of central excise duty totalling ₹ 10,68,298/-, the balance to be paid was ₹ 1,81,809/-. The Adjudicating Officer observed that making suo-motu payments of differential duty was conclusive evidence of evasion of duty by the Assesse and acceptance of clandestine clearance without payment of duty / short payment of duty which amounted to violation of the relevant provisions of Central Excise Act and Central Excise Rules, 1944 as also Central Excise Rules, 2001 i.e. Rules 9, 52, 52A and 173(c) (ii) and 173Q of Central Excise Rules, 1944 as also Rules 7, 11, 25(1) (a) of C.E.R, 2001 which was liable for recovery under the provisions of section 11A of C.E.A, 1944. The SCN further alleged that the Assesse had violated the provisions of Rules 53 and 173G(4) (a) of C.E.R, 1944 and also the provisions of Rules 10 and 251 (b) of C.E.R, 2001 by suppressing their books of account regarding the actual quantity of CTD bars and rods cleared during Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sesse submitted its show-cause and personal hearing was also accorded through learned Advocate appearing for the appellant. The Adjudicating Officer after consideration of the reply to the SCN and submission of the Assesse, held that in respect of 71 invoices, the Assesse had submitted that they did not issue central excise invoices inadvertently and that the sale price be taken as cum duty price and duty demand should be reworked accordingly. For the remaining 07 invoices, the Assesse had submitted that the Department is required to prove that there is undervaluation. The A.O found that the allegations of undervaluation in respect of 07 invoices is on the basis of the rates quoted in the diary which are on the higher side as compared to what has been mentioned in the body of many invoices. The A.O also found that the Assesse had accepted the rates quoted in the diary for the remaining 71 dispatches. Therefore, there was no reason before him to hold as to why the rates quoted for the remaining 07 invoices should not be taken as the authentic. It accordingly held that the sale price should be taken as cum duty price and the duty demand needs to be reworked accordingly. Therefore, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een imposed, penalty of ₹ 20,000/- was imposed under rule 173Q of the erstwhile C.E.R, 1944 read with rule 25 of C.E.R, 2001 on the Assesse by taking a lenient view. Similarly, ₹ 20,000/- was imposed as penalty on Shri Hari Krishna Budhia, M.D under rule 209A of erstwhile C.E.R, 1944 read with rule 26 of C.E.R, 2001 by the Adjudicating Officer vide order dated 13.04.2005. 31. The appellant and Shri Hari Krishna Budhia, Managing Director both went in appeal against the adjudication order before the Commissioner (Appeals), Central Excise. Before the Commissioner (Appeals), the Managing Director Shri Hari Krishna Budhia submitted his response to the show-cause notice issued by the Commissioner (Appeals) for enhancement of penalty under rule 209A of C.E.R, 1944 read with rule 26 of C.E.R, 2001 taking the following grounds (Annexure-5):- Managing Director Mr. Budhia took the plea that the adjudication order dated 13.04.2005 and the show-cause notice dated 22.02.2002 were based on the entries in the diary which have been read by the Department with wholly unwarranted presumption and assumption without any evidence. The diary many a times contains different offers received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... represent clear picture. Since no submissions were made by the Appellant No. 2 Shri Hari Krishna Budhia at any stage, Department had no other alternative than to accept the entries in the diary in respect of 07 consignments as the basis for arriving at the assessable value. In respect of 71 consignments, the plea of the Appellant Company that it had neither issued invoices nor paid central excise duty inadvertently, was not acceptable. The Commissioner (Appeals) held that the Managing Director himself had maintained the diary, as per his own statement and the statement of various employees of the Company M/s BFCL during the stage of the investigation that the Managing Director was responsible for negotiation with the customers, payment of duty, etc., non-issue of invoices / non- payment of duty even after maintaining detailed accounts confirm mens rea on his part. Since Shri Budhia had not denied recovery of the diary and accepted it to be in his own handwriting and that the entries appearing in his diary were not reflected in the statutory records of accounts, the plea that Shri Budhia has been correctly reflecting the production, was not acceptable. The Commissioner (Appeals) the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anced penalty upon the Managing Director was set aside and the penalty of ₹ 20,000/- as imposed by the Original Authority was restored. The impugned order was upheld in all other aspects. 33. From the aforesaid conspectus of facts, it is evident that the search and seizure proceedings in the factory premises as well as at the office premises of the Appellant Company and the investigation by the Central Excise Authorities, found the following incriminating materials against the Assesse as is also apparent from the show cause notice: i. The statement of Sri Hari Krishna Budhia, Managing Director recorded under Section 14 of C.E.A. 1944; ii. The Private Ambassador diary seized from the office; iii. The statement of the staff and officers recorded under Section 14 of the C.E.A. 1944 namely Sri Prem Shankar Mishra, Administrative Officer, Sri S.K. Jaiswal, Sr. Accounts Officer, Sri A.D. Singh, Assistant Excise Dispatch of the Assesse and Md. Abdul Kalam, Production Manager of M/s BFCL revealed that the procurement of raw materials and sale of finished goods and rate share as well as selection of bus etc. are all done by the Managing Director Sri Hari Krishna Bud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statements under certain circumstances- (1) A statement made and signed by a person before any Central Excise Officer of a Gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, - (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceedings under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court. 35. Section 9D was introduced in the Act by an amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Central Excise [2016 (332) E.L.T 416 (Del.) Para 40- 46); Jindal Drugs Pvt. Ltd. Vs. Union of India [2016 (340) E.L.T 67 (P H), para 9 to 25]; High Tech Abrasives Ltd. Vs. Commissioner of C.Ex. Cus, Raipur [2018 (362) E.LT 961 (Chhattisgarh) Para 9.3 -9.5 and Ambika International Vs. Union of India [2018 (361) E.L.T 90 (P H) Para 17 to 28]. Para 23, 24, 25 and 27 thereof are quoted hereunder: 23. There is no justification for jettisoning this procedure, statutorily prescribed by plenary parliamentary legislation for admitting, into evidence, a statement recorded before the gazetted Central Excise Officer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word shall in Section 9D(1), makes it clear that, the provisions contemplated in the sub-section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. 24. The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the gazetted Central Excise Officer, has every ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement of the Director recorded during investigation under Section 14 of the Act could not be treated as a relevant piece of evidence. No distinction has been made with regard to the statement of a Director of the Company or any other person under Section 9D of C.E.A, 1944. Division Bench of Chhattisgarh High Court has held as under: 9.5 Undoubtedly, the proceedings are quasi criminal in nature because it results in imposition of not only of duty but also of penalty and in many cases, it may also lead to prosecution. The provisions contained in Section 9D, therefore, has to be construed strictly and held as mandatory and not mere directory. Therefore, unless the substantive provisions contained in Section 9D are complied with, the statement recorded during search and seizure operation by the Investigation Officers cannot be treated to be relevant piece of evidence on which a finding could be based by the adjudicating authority. A rational, logical and fair interpretation of procedure clearly spells out that before the statement is treated relevant and admissible under the law, the person is not only required to be present in the proceedings before the adjudicating authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, the aforesaid statement of the Counsel for the Respondents cannot be accepted. This fact clearly proves the conclusion that the statements of the concerned persons were of their volition and not outcome of any duress. Accordingly, on the first and second question of law, we hold that the statement of the Director could not be treated as relevant piece of evidence nor could be relied upon without compliance of Section 9D of the Act. The two questions of law accordingly, stand answered in that manner. 36. It has also been well settled that in respect of an inculpatory statement or confession made before an authority, a close scrutiny is required as the Court has to see whether the confession is voluntary or free from pressure for it to be accepted. ( See Mohtesam Mohd. Ismail Vrs. Enforcement Directorate and others [2007 (220) E.L.T 3 (SC) para 16]. Mr. Budhia, Managing Director of the Appellant Company, as a matter of fact, was never examined by the Adjudicating Authority pursuant to his statement made under Section 14 of the Act of 1944. The learned Tribunal proceeded to hold that Sri Budhia had admitted that in the private diary, he had recorded det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 9D. The Adjudicating Officer never followed this procedure. Even if his statement under Section 14 of the C.E.A. 1944 is taken on its face value, they were never admitted in evidence by the Adjudicating Authority in compliance of the provisions of Section 9D of the Central Excise Act 1944. The question of cross examination of Sri Budhia, Managing Director during the adjudication proceeding on the part of the appellant could come when the Adjudicating Authority formed an opinion that the statement of Mr. Budhia under Section 14 of the Act is to be admitted in evidence as a relevant piece of material evidence upon compliance of the rigors of clause (b) of section 9D (1) by recording a satisfaction that it was made voluntarily and without any compulsion or coercion and the Assessee was confronted with such statement to be used against him. In this regard appellants have relied upon a decision in the case of Sukhwant Singh Vs. State of Punjab [1995) 3 SCC 367], which postulates that under Section 138 of the Evidence Act, 1872 a witness could first be examined in chief and then subjected to cross examination and for seeking any clarification, the witness may be re-examined by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents, if recorded by officers of sufficiently high status, to be determined by the Government should be admissible in such prosecutions, since they are very often the earliest officially recorded version of the facts. 14.2 Certain conditions and safeguards will, no doubt, be necessary. Reference in this connection may be made to the Evidence Act, which has a provision relating to the admissibility of a statement made in a previous judicial proceeding. The relevant provision in the Evidence Act, is as follows: 33. Evidence given by a witness in a judicial proceeding, or before any person authorised by law to take it, is relevant for the purpose of proving, in a subsequent judicial proceeding, or in a later stage of the same judicial proceeding, the truth of the facts which it states, when the witness is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or if his presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable: Provided that the proceeding was between the same parties or their representatives in interest; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t extract of the objects and reasons of the Bill No. 119 of 1972 is also reproduced for better appreciation. Bill No. 119 of 1972 The Customs, Gold (Control) and Central Excise and Salt (Amendment) Bill, 1972 Bill further to amend the Customs Act, 1962, the Gold (Control) Act, 1968 and the Central Excises and Salt Act, 1944. Be it enacted by Parliament in the Twenty-third Year of the Republic of India as follows:- CHAPTER I PRELIMINARY 1. This Act may be called the Customs, Gold (Control) and Central Excises and Salt (Amendment) Act, 1972. CHAPTER II AMENDMENTS TO THE CUSTOMS ACT, 1962 2. In section 111 of the Customs Act, 1962 (hereafter in this Chapter referred to as the Customs Act), in clause (m), for the words any dutiable or prohibited goods which do not correspond in any material particular , the words any goods which do not correspond in respect of value or in any other particular shall be substituted. 3. In section 112 of the Customs Act, after clause (ii), the following clauses shall be inserted namely:- (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ences would be a pure question of law. In the instant case, the appellant has not urged any new facts but raised a legal plea relating to non-compliance of Section 9D of the C.E.A by the Adjudicating Authority. The fact that the Adjudicating Authority did not scrutinize the statement of the Managing Director made under section 14 of the Act in terms of section 9D (1) (b) is not in dispute. The Adjudicating Authority was duty bound to do so. As such, the instant legal plea cannot be rejected on the ground that it is a new fact which is not open to the appellant to urge in the instant appeal. 41. Learned counsel for the Respondent has submitted that Mr. Budhia or the Appellant Company had never rebutted the entries in the diary having been made in the hands of the Managing Director or his statement recorded under section 14 of the Act were never retracted before the Adjudicating Authority any time later. Therefore, it was not open for the appellant to take such a point. He has relied upon a decision in the case of Assistant Collector of Central Excise, Rajamundry versus Duncan Agro Industries Ltd. and others [(2000) 7 SCC 53], para-9, 12 17]. A perusal of the decision i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1962 and Section 171 of Sea Customs Act, 1878 (which was repealed by the Customs Act, 1962 and corresponded to Section 108 of the Customs Act), and after observing and pointing that Section 14 of the Central Excise Act is the same as Section 108 of the Customs Act, dealt with the earlier decision of the Apex Court to discern how the scope of the provisions have been understood earlier and held as under: 12. In this context we bear in mind that a confession made to a police officer can be recorded by him without any of the constraints incorporated under Section 164 of the Code. But the safety of the confessor who makes such confession to the police officer is that the same is forbidden from use in evidence. The ban contained in Section 25 of the Evidence Act is an absolute ban. But it must be remembered that there is no ban in regard to the confession made to any person other than a police officer, except when such confession was made while he is in police custody. The inculpatory statement made by any person under Section 108 is to non-police personnel and hence it has no tinge of inadmissibility in evidence if it was made when the person concerned was not then in pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orcement, Foreign Exchange Regulation Act and Others [(1985) 3 SCC 72] in the following manner: 12. ... The expression so far as may be has always been construed to mean that those provisions may be generally followed to the extent possible. In order to give full meaning to the expression so far as may be , sub-section (2) of Section 37 should be interpreted to mean that broadly the procedure relating to search as enacted in Section 165 shall be followed. But if a deviation becomes necessary to carry out the purposes of the Act in which Section 37(1) is incorporated, it would be permissible except that when challenged before a court of law, justification will have to be offered for the deviation. This view will give full play to the expression so far as may be. In the present case, the Adjudicating Officer has not shown any justification for departing from the specific procedure prescribed under Section 9D(1)(b) of the C.E.A Since neither such scrutiny have been conducted by the Adjudicating Officer, as held in the case of Duncan Agro Industries Ltd. (Supra), nor such procedure have been followed, as contemplated under Section 9D(1)(b) of the C.E.A, Respondent cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary to recapitulate and recite all the decisions on this legal aspect. But suffice to say that the core of all the decisions of this Court is to the effect that the voluntary nature of any statement made either before the Custom authorities or the officers of Enforcement under the relevant provisions of the respective Acts is a sine qua non to act on it for any purpose and if the statement appears to have been obtained by any inducement, threat, coercion or by any improper means that statement must be rejected brevi manu. At the same time, it is to be noted that merely because a statement is retracted, it cannot be recorded as involuntary or unlawfully obtained. It is only for the maker of the statement who alleges inducement, threat, promise etc. to establish that such improper means has been adopted. However, even if the maker of the statement fails to establish his allegations of inducement, threat etc. against the officer who recorded the statement, the authority while acting on the inculpatory statement of the maker is not completely relieved of his obligations in at least subjectively applying its mind to the subsequent retraction to hold that the inculpatory statement was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the circumstances of the case, the statement should be admitted in evidence. This safeguard has been incorporated by an amendment in the Central Excise Act, 1944 in the year 1973 with the only purpose that statements made before the Central Excise Officer under section 14 of the Act during inquiry / investigation are treated as relevant evidence on the satisfaction of the Adjudicating Authority as having been made voluntarily without any coercion or compulsion for the purposes of proving the truth of the facts. Otherwise, the Legislature had no reason to incorporate the provisions of section 9D by way of an amendment in the year 1973. Moreover, the series of decisions referred to above also reiterate that in adjudication proceedings, only true evidence forms the basis of the findings of the Adjudicating Authority. Similar view has been taken by other High Courts such as in the case of Ciabro Alemao versus The Commr. of Customs, Goa [(2018) (362) Excise Law Times 465 (Bom)]; Kallatra Abbas Haji versus Government of India [1985 (5) ECR 1746 Kerala: 1994 (69) E.L.T 212 (Ker);]. In Kallatra Abbas Haji (Supra), Kerala High Court while dealing with the application of section 138B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding that the Custom Officials are not police officers. In the facts of the present case, Appellant is a Company upon whom duty liability has been saddled on the basis of the statement of the Managing Director of the Company recorded under section 14 of the Act without any corroborative tangible evidence. Such statement of the Managing Director was not subjected to scrutiny under section 9D (1) (b) of the C.E.A., 1944 and treated as relevant material admissible for evidence for the purposes of proving the truth in casting the liability upon the Appellant Company. Therefore, the purported confession of the Managing Director could not bind the Appellant Company as such statement was not subjected to scrutiny in terms of section 9D(1)(b) of the C.E.A, 1944. 47. In the light of the well settled principles governing the operation of Section 9D of the Act, the statement of Mr. Budhia recorded under Section 14 of the Act of 1944 could not be treated as relevant piece of material for the purpose of proving the truth of facts which it contains in a proceeding under the C.E.A without complying with the provisions of Section 9D of the Act. The first substantial of law question is answered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings in High Court/Supreme Court, take a number of years and by the time the claimant succeeds and asks for refund, his claim will be barred; it will be thrown out on the ground that it has not been filed within six months from the date of payment of duty. We think that the entire edifice of this argument is erected upon an incomplete reading of Section 11-B. The second proviso to Section 11-B (as amended in 1991) expressly provides that the limitation of six months shall not apply where any duty has been paid under protest . Now, where a person proposes to contest his liability by way of appeal, revision or in the higher courts, he would naturally pay the duty, whenever he does, under protest. It is difficult to imagine that a manufacturer would pay the duty without protest even when he contests the levy of duty, its rate, classification or any other aspect. If one reads the second proviso to sub-section (1) of Section 11- B along with the definition of relevant date , there is no room for any apprehension of the kind expressed by the learned counsel. 93. It was then submitted that Rule 233-B which prescribes the procedure to be followed in cases where duty is paid under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of India [2017 (350) E.L.T 145 (Del) Para 13 to 16, 18, 19)]). Under the scheme of the Act, till the demand is adjudicated by a reasoned order, the amount paid by the Assesse before issuance of SCN could at best be a deposit. In the case of Collector of Central Excise, Baroda Versus L.M.P Precision Engg. Co. Ltd. reported in [(2004) 9 SCC 703], the Apex Court has at para 14 of the judgement held that the statement in reply to the show cause notice is not an evidence and cannot be treated as such without the support of any evidence on record. The appellant has relied upon the case of MIL India Ltd. Vs. Commissioner of Central Excise Noida reported in [(2007) 3 SCC 533] in support of the proposition that the order of Commissioner (Appeals) could also be treated as order of assessment, since he has the power to add or subtract certain items in the order of assessment made by the Adjudicating Authority. Section 35-B indicates that the decision of order passed by the Commissioner (A) shall be treated as an order of an adjudicating authority. In the circumstances, the Apex Court held that the High Court had erred in holding that the Assessee was not entitled to agitate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Investigation; (2011) 1 SCC 74, Iridium India Telecom Limited versus Motorola Incorporated and others ]. Section 9A creates vicarious liability on the Company s officers in case of offences. In the instant proceedings, Appellant-Company was served with a show-cause notice for charges of clandestine removal of excisable goods and not for any criminal offences. The reliefs prayed for, by the Appellant- Assesse was for setting aside the duty demand under Section 11A and penalty imposed under Section 11AC of C.E.A. Shri H.K. Budhia, Managing Director was imposed with a personal penalty under Rule 209A of C.E.R, 1944 read with Rule 26 of C.ER, 2004 for dealing with buyers /suppliers and for purported accounted or unaccounted sale by making entries in his own private diary i.e. the irregular maintenance of records. The Appellant- Company is a legal entity on its own, capable to sue and being sued. Therefore, finality of the adjudication proceedings against the Managing Director of the Company on non-filing of any further appeal against the order of learned CESTAT, cannot be said to operate as res judicata binding the Appellant-Company. Moreover, on a factual note, the enhance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant on 29.11.2001 of an amount of ₹ 10,68,282/- before issuance of SCN on 21.02.2002. It is not in dispute that no other corroborative and tangible evidence such as (i) unaccounted purchase of raw materials (ii) consumption of raw materials (iii) manufacture of finished goods (iv) consumption of electricity (v) payment of wages (vi) transportation / dispatch of finished goods (vii) flow back of consideration (viii) acceptance of buyer of finished goods (ix) acceptance of seller of raw materials (x) excess / shortage of raw materials / finished goods etc. (xi) no evidence of extra use of electricity (xii) no evidence of extra use of labour or payment of unaccounted wages (xiii) no evidence in the nature of Challans, parallel invoices etc. for removal of impugned goods and no unaccounted cash was found during the search. The Adjudicating Authority has, in fact, relied upon only the above two incriminating materials i.e. statement of the Managing Director under Section 14 of the C.E.A and the notings in the private diary i.e. Ambassador diary and no other corroborative evidence as above. The legal principles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the private diary, which is not a substantive piece of evidence, therefore remained uncorroborated by any tangible evidence collected during inquiry or investigation to establish the charge of clandestine removal against the appellant. 56. It needs to be examined as to what is evidentiary value of the private diary of the Managing Director. Section 34 of the Evidence Act reads as follows. 34. [Entries in books of accounts including those maintained in an electronic form] when relevant.- [Entries in the books of accounts including those maintained in an electronic form], regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability. In the case of Central Bureau of Investigation versus V.C. Shukla and others [(1998) 3 SCC 410], the Apex Court while dealing with the issue in connection of certain entries in Jain Hawala Note Books expatiated on the ingredients of Section 34 of the Evidence Act at para-17 in the following words: 17. From a plain reading of the section it is manifest that to make an entry releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired by rules made under this Act to supply, or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information; (d) attempts to commit, or abets the commission of, any of the offences mentioned in clauses (a) and (b) of this section; shall be punishable, - (i) in the case of an offence relating to any excisable goods, the duty leviable thereon under this Act exceeds [fifty lakhs] of rupees, with imprisonment for a term which may extend to seven years and with fine : Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the Court such imprisonment shall not be for a term of less than six months; (ii) in any other case, with imprisonment for a term which may extend to three years or with fine or with both. That is why it has been observed by the Apex Court in V.C. Shukla (Supra) at para-34 in the following manner. 34. ...... Since, however, an element of self-interest and partisanship of the entrant to make a person - behind whose back and without whose knowledge the entry is made - liable cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not be treated as evidence of clandestine removal of goods since the Adjudicating Officer was duty bound to determine the duty liability in accordance with law on the basis of tangible material evidence collected during inquiry or investigation. As such, the substantial question of law no. VI is also answered in favour of the Appellant-Assessee. 60. Learned counsel for the Respondent has also relied upon the case of Commissioner of Central Excise, Mumbai Versus Kalvert Foods India Private Limited and others [(2011) 12 SCC 243]. In the case of Kalvert Foods (Supra), during course of raid conducted on the factory premises of the Company and also at the premises of distributors, wholesale dealers / traders of the Respondent Company in and around Mumbai and other connected premises, several incriminating documents, articles and records were found and huge quantity of finished goods were also found lying in the factory premises. It was also noticed that there was one tempo parked inside the factory premises loaded with cartoons containing the excisable goods manufactured by the said Company and was about to leave the factory premises. The driver of the said tempo was not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on his own, deposited an amount of ₹ 11.00 lakhs towards excise duty which proved the conclusion that the statement of the persons concerned were of their own volition and not the outcome of duress. Para-19 of the Report is quoted herein below: 19. We are of the considered opinion that it is established from the record that the aforesaid statements were given by the persons concerned out of their own volition and there is no allegation of threat, force, coercion, duress or pressure being utilised by the officers to extract the statements which corroborated each other. Besides, the Managing Director of the Company on his own volition deposited the amount of ₹ 11 lakhs towards excise duty and therefore in the facts and circumstances of the present case, the aforesaid statement of the counsel for the respondents cannot be accepted. This fact clearly proves the conclusion that the statements of the persons concerned were of their volition and not the outcome of any duress. The Apex Court also took into account that the Adjudicating Authority had recorded findings of recovery of unaccounted finished excisable goods from eight different dealers in and around Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gible corroborative evidence of such clandestine removal of goods even after inquiry / investigation and search on the premises of the buyers of the Appellant Company. 62. Learned counsel for the Respondent has also relied upon the case of Union of India and another versus GTC Industries Ltd., Bombay [(2003) 5 SCC 106] and submitted that a quasi-judicial order has to be judged on the basis of the reasoning contained therein. It is submitted that the order passed by the Adjudicating Authority as upheld by the learned Tribunal is proper in the eye of law. However, for the reasons discussed above in the facts and circumstances of this case, the decision of GTC Industries Ltd (Supra) has no application herein. 63. Having considered the submissions of learned counsel for the parties and the materials on record including the principles of law as culled out from the provisions of C.E.A, 1944 and the decisions referred to hereinabove, I am of the considered view that the order of learned Tribunal cannot be sustained in the eye of law. It is accordingly set aside. The substantial questions of law framed for adjudication in this appeal are accordingly answered in favour of the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nality, can itself be used against the appellant? xi. Whether the impugned order was passed solely on the statement of the Managing Director of the Company recorded under Section 14 of the Central Excise Act, 1944 or there was further material to confirm the demand against the appellant? xii. Whether the entries made in private diary of the Managing Director of the Company could have been a basis for passing the impugned order against the appellant? 68. Submission of the Appellant on the substantial question of law: I. On the first substantial question of law a. The learned Tribunal has failed to appreciate that the statement of the Managing Director of the appellant was irrelevant piece of material due to non-compliance of the mandatory conditions of Section 9D of the Act of 1944. b. Under Section 9D(1)(b) read with Section 9D(2) of the Act of 1944, statement made before the Central Excise Officer during the course of any inquiry or proceeding under Section 14 of the Act of 1944 shall be relevant for the purpose of proving the truth of the facts only when the person who made the statement is examined as a witness before the Adjudicating Authority and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of Constitution of India. Learned counsel for the appellant has submitted that interpretation of statute involves giving content to the meaning of expression used and also what is not said. j. In support of the submissions, learned counsel for the appellant has placed reliance upon the following decisions: i. 2016 (340) E.L.T 67 (P H): Jindal Drugs Pvt. Ltd Vs. Union of India ii. 2018 (361) E.L.T 90 (P H): Ambika International Vs. Union of India iii. 2018 (362) E.L.T 961 (Chhatisgarh): Hi Tech Abrasives Ltd. Vs. Commissioner of C. Ex. Cus., Raipur iv. 2016 (332) E.L.T 416 (Del.): Flevel International Vs. Commissioner of Central Excise v. (1995) 3 SCC 367: Sukhwant Singh Vs. State of Punjab vi. 2007 (220) E.L.T 3 (SC): Mohtesham Mohd. Ismail Vs. Spl. Director, Enforcement Directorate k. Based on these decisions, it is submitted that the consistent line of interpretation of Section 9D is that the protection of Section 9D is mandatory in nature. l. Learned counsel for the appellant submits that the decision in the case of Silicone Concepts International Pvt. Ltd. Vs. Pr. Commr. of Cus., ICD, TKD (Import), New Delhi re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled that the charges in the show-cause notice are prima- facie in nature based on uncontested material. Even non-filing of any reply, in the worst-case scenario, is not admission of the charges. The appellant has disputed the entire demand at every stage of the proceedings right from the Adjudicating Authority till the learned Tribunal. Since Section 11A (2) mandates determination of duty of excise in accordance with law even where no replies were filed, it was the duty of the Adjudicating Authority to determine it in accordance with law. In any case, defence reply cannot be treated as evidence in support of the charge in the show-cause notice. e. The Apex Court in the case of Collector of Central Excise, Baroda Vs. L.M.P. Precision Engg. Co. Ltd. reported in (2004) 9 SCC 703 para 14 has held that statement in reply to the show-cause notice is not evidence. The Tribunal erred in treating it as evidence in support of the case. f. Even if it is assumed that before the Adjudicating Authority, only quantification of demand was challenged, then also nothing would turn out of it inasmuch as there is no estoppel against challenging the taxability before the Commissioner (Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he duty before service of show cause notice on him under Section 11A(1) and inform the Central Excise Officer of such payment in writing. In such cases, the Central Excise Official shall not serve any show-cause notice under Section 11A (1) in respect of duty so paid. As per explanation 1 to Section 11A (2)(B), it shall not apply to the cases where duty was not levied / paid by reason of fraud or collusion or willful mis-statement or suppression of facts. Since in the instant case, suppression of facts etc. were alleged in the show cause notice, hence the adjudication had to be done under Section 11A (1) and 11A (2). In such a case, there is no scope to pay duty and settle the case before issuance of show-cause notice. Further, there is no other provision for collection of duty before issuance of show-cause notice and passing of adjudication order. Any collection of amount at the investigation stage is without authority of law and is merely a deposit made under protest. In the aforesaid background, mere deposit of any amount during the investigation before issuance of show cause notice, an adjudication order, cannot be treated as admission of the charge. The liability to duty had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of the demand under Section 11A and imposition of penalty under Section 11AC of the Act on charges of purported clandestine removal of excisable goods and for setting aside of the same. Whereas, the issue and relief claimed by the Managing Director of the appellant company before the learned Tribunal was with respect to imposition of personal penalty under Rule 209A of the erstwhile Rule of 1944 read with Rule 26 of the Rules of 2001 for dealing with buyers / suppliers and writing of diary in his own handwriting for purported accounted and unaccounted sales. The charge against the Appellant Company in the show-cause notice was of purported clandestine removal and in the case of the Managing Director of the appellant company was of purported maintenance of records. The Department itself has treated them as two separate entities, and not one being the agent of the other, by initiating separate proceedings. Therefore, when the parties are different, issues are different and reliefs claimed are different, no question of any finality would arise. f. Learned counsel for the appellant has relied upon the following decisions:- i. Sarva Shramik Sangh Versus Indian Oil Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Abrasives Ltd. Vs. Commissioner of C. Ex. Cus., Raipur [2018 (362) E.L.T 961 (Chhatisgarh); iii. Continental Cement Company Vs. Union of India [2014 (309) E.L.T 411 (All.)]; iv. Triveni Engineering Industries Ltd. Vs. Commr. of C.Ex. Allahabad [2016 (334) E.L.T 595 (All.) v. Sakeen Alloys Pvt. Ltd. Vs. Commissioner of C. Ex., Ahmedabad [2013 (296) E.L.T 392 (Tri-Ahmd.)] which stood affirmed up to the Supreme Court as reported in Micro Inks Ltd. Vs. Commissioner of Central Excise, Daman [2015 (319) E.L.T 117 (SC)]. VI. On the sixth substantial question of law a. It is the categorical submission of learned counsel for the appellant that the findings of the learned Tribunal are entirely based on the private diary without any corroborative evidence obtained through independent inquiry. Therefore, such a serious charge of clandestine removal cannot be sustained merely on the basis of entries in the private records which is denied by the buyers. b. Learned counsel for the appellant has placed reliance upon the following decisions: - i. 2013 (287) E.L.T 243 (Gujarat): Commissioner of C. Ex. Cus. Service Tax Vs. Vishwa Traders P. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avita, Ashish, Prasad, Pravin, Arshad and quantities as well as rates thereon pertain to dispatch / sale of CTD bars and rods through different buyers. The measurement of CTD bars and rods such as 8 mm, 12 mm, 16 mm and 20 mm mentioned randomly showed that it related to CTD bars and rods. Prima facie, it appears that majority of such dispatches were clandestine in nature as figures did not match in the books of accounts. On scrutiny of the notings of the diary with the corroborative records of dispatch / sales, it revealed that the Assessee had made dispatch of CTD bars and rods to the buyers during the period 12.01.2001 to 05.09.2001, wherein in majority of the cases, same were not issued under the cover of Central Excise Invoice. Where invoices were found to have been issued, the Assessee had quoted wrong price as in the Central Excise Invoice, prices were lower than what was noted in the said diary, resulting in under valuation of the so dispatched excisable goods and short payment of duty of central excise thereon. From the notings of the said diary, and in the inquiry / investigation, it was revealed that dispatches were made to the following buyers of the Assessee. vii. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he diary, 21 dispatches were shown without payment of central excise duty amounting to ₹ 3,86,733/-; whereas two dispatches were found showing short paid duty amount assessed to ₹ 7,963/-. Total short payment/non-payment of duty amounted to ₹ 3,94,696/- during the period 2000-01. e. Further, from the notings in the said diary, it revealed that during the period 01.04.2001 to 05.09.2001, out of altogether 55 dispatches mentioned in the diary, 50 were without payment of central excise duty amounting to ₹ 8,39,962/-; whereas five dispatches suffered from short payment of duty amounting to ₹ 15,449/-, total amounting to ₹ 8,55,411/- during the period 01.04.2001 to 05.09.2001 corresponding to the period 2001-02. f. The Assessee meanwhile deposited the differential duty for the period 2000-01 to the tune of ₹ 3,36,023/- and differential duty for the period 2001-02 to the tune of ₹ 7,32,275/-. Intimation was given on 24.11.2001 through FAX. g. Learned counsel for the Respondent Revenue submits that suo-motu payment of differential duty on CTD bars and rods for the period 2000-01 and 2001-02 are conclusive evidence of evasion of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- under Rule 173Q of 1944 Rules read with Rule 25 of 2001 Rules and further penalty of ₹ 10,77,678/- under Section 11AC of the Act. A penalty of ₹ 20,000/- under the erstwhile Rule 209A of the 1944 Rules read with Rule 26 of 2001 Rules was also imposed upon Shri Hari Krishna Budhia, Managing Director of the Appellant Company. The Assessee / Appellant went in appeal before the Commissioner (Appeals) under Section 35 of the Act, reiterating its contentions being aggrieved by the Order-in-Original. Learned Commissioner (Appeals) in exercise of the power conferred under Section 35A (3) of the Act issued show-cause notice dated 29.09.2005 upon Shri Budhia proposing enhancement of penalty under Rule 209A of the 1944 Rules read with Rule 26 of 2001 Rules. Upon consideration of the submissions and the grounds taken by the appellant in the Memo of Appeal and the materials on record, the Commissioner (Appeals) vide Order-in-Appeal dated 29.12.2005 upheld the Order-in-Original. At the same time, penalty on Shri Budhia was enhanced to ₹ 20,00,000/- from ₹ 20,000/- under Rule 209A of the 1944 Rules read with Rule 26 of 2001 Rules. However, penalty of ₹ 20,000/- un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in the invoices. Since the Assessee had accepted the rate quoted in his diary for the remaining 71 dispatches, there is no reason why the rate quoted for remaining seven invoices should not be taken as authentic. (C) The contention of the appellant that the order is based only on the basis of the entry in the private diary, is not correct. In fact, a detailed entry-wise examination was done during the course of investigation and the entries made in the diary were also corroborated by the admission of the Managing Director in his statement recorded under Section 14 of the Act that the same must have occurred inadvertently. (D) Regarding compliance of the provisions of Section 9D of the Central Excise Act, 1944, it is submitted that at no point, such a plea was raised by the appellant either before the Adjudicating Authority or in the subsequent appeals. This ground has been taken up for the first time before this Court and, therefore, neither the Adjudicating Authority nor the Appellate Forum have discussed this issue in their order. Reference is made to the decision of the Apex Court in the case of Modern Insulators Limited versus Oriental Insurance Company Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in the order of the learned Tribunal. The substantial questions of law involved in this appeal are fit to be answered in favour of the Revenue and against the appellant. The appeal may therefore, be dismissed. Findings 70. Factual background, and events prior to issuance of show cause notice by the adjudicating authority and proceedings and findings of the adjudicating authority. a. The Appellant Company is engaged in manufacture of Alloy and Non- Alloy Steel Ingots and CTD bars and rods and was registered with the respondent department. b. On 07.09.2001, Central Excise Officers conducted a search at the factory as well as in the office premises and one private diary written by the Managing Director of the appellant company, was seized which allegedly contained certain purchase and dispatch entries for the period from 12.01.2001 to 05.09.2001, spread over two financial years 2000-01 and 2001-02. c. Statements of Administrative Officer, Sr. Accounts Officer, Assistant, Excise and Dispatch Section and Production Manager of the Appellant Company were recorded and lastly on 15.11.2001, statement of the Managing Director of the Company was recorded under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 12,50,107/- ₹ 10,68,298/- ₹ 1,81,809/- h. The show cause notice extensively referred to the statements of various officers of the appellant company as well as the statements of the Managing Director (co-noticee), all recorded under Section 14 of the Act of 1944. It included explanation given by the Managing Director with regards to the entries in the private diary de-codifying the names and other details of the persons with whom transactions were done; his acceptance that he looked after all the work relating to dispatches and purchases, starting from finalization of rates, party, quantity as also of payment. When specifically asked regarding non- payment of duty upon such dispatches, he replied that he had no idea, but added, if at all that was a fact, it must have occurred due to inadvertence and undertook to examine the issue and if such dispatches were not covered under invoices and if duty was quantified, he agreed to pay the duty and also agreed to pay the duty difference in case of the rates being on the higher side in his diary. Upon detailed discussions of the various dispatches reflecting from the diar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CEA 44. (v) A separate penalty should not be imposed under the provisions of Rule 173Q of erstwhile CER 44 read with Rule 25 of the CER 2001. (vi) Interest @ 20% per annum from the first day of the month succeeding the month on which duty ought to have been paid [but for the provisions contained in Sec. 11A(2) of CEA 44] till the date of payment of such duty be not recovered from them under Section 11AB of the CEA 44. (vii) A personal penalty may not be imposed upon Shri Hari Krishna Budhia, Managing Director, M/s Bihar Foundry Castings Ltd under the provisions of Rule 209A of erstwhile CER 44 read with Rule 26 of CER 2001. j. The assessee -appellant company as well as its Managing Director was directed to submit their reply in defence of this notice alongwith documents in their defence, and, also, to mention in writing whether they desire to be heard in person before the case is decided. It was also mentioned that if no cause is shown, the case will be decided on merit on the basis of evidences on record. The evidences on record were enclosed with the show-cause notice which included the private diary as well as statements recorded under Section 14 of the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Udyog Limited [2002 (141) ELT 3(SC)] They have submitted that in this case, they could not issue the invoices inadvertently. They immediately deposited the duty for CTD Bars and rods for the period January 2001 to September 5, 2001. Accordingly, a total amount of ₹ 10,68,298/- was deposited on 24.11.2001, much before issuance of the SCN on 22.02.2002. The correct amount of demand has been re-calculated based on lawful deduction on duty @16% which comes to ₹ 10,68,298/-. There are two invoices for the period 2000-01 (para 4.1 of SCN) and 5 invoices for the period 2001-02 (para 4.4 of the SCN), relating to which there is allegation of short payment of duty on account of under valuation by way of substitution of the sale price in the invoice. The total alleged short payment of duty is ₹ 23,412/-. The assessee has submitted that onus of the proving the same is on the department and the same burden has not been discharged by the department. Regarding imposition of mandatory penalty under section 11AC of the Central Excise Act, 1944, they have submitted that since duty has been deposited before issuance of the SCN, no penalty is imposable nor any interest is ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treating the sale price as cum-duty price, and fully accepted the specific stand and calculation made by the appellant in this regard. For remaining 7 invoices, pertaining to under-valuation, the duty liability was found to ₹ 20,182/- again by treating the sale price as cum-duty price. Thus, the total liability was calculated as ₹ 10,77,678/- and ₹ 10,68,298/- having been deposited on 24.11.2001 (prior to issuance of show cause), the balance was calculated as ₹ 9,380/-. Penalty was also imposed upon the noticees. o. The operative portion of the Order-in-Original dated 13.04.2005 passed by the adjudicating authority reads as follows: - (1) The amount of ₹ 10,68,298/- deposited on 24.11.2001 is short paid. I confirm the demand for the balance amount of ₹ 9380/- under Section 11A(2) of the Central Excise Act, 1944 read alongwith proviso to Section 2B of the same section. (2) I order recovery of interest under section 11AB of the Central Excise Act, 1944 @ 20% per annum from the first day of the month succeeding the month on which duty ought to have been paid till the payment of such duty. (3) Penalty of ₹ 10,77,678/- is impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) CCE Vs. Shri Krishna Pipe Industries 2005 (165) ELT 208 (kar) (d) Sanjay Insecticides Vs. CCE, Aurangabad 2005 (68) RLT 110 (T) (e) CCE Vs. Rastriya Ispat Nigam Ltd. 2004 (163) ELT A53 (SC) (iii) Imposition of penalty of ₹ 20,000/- each on the appellant No.1 under Rule 173Q of erstwhile Central Excise Rules, 1944 and on appellant No.2 under Rule 209A of erstwhile Central Excise Rules, 1944 is also contrary to the settled law and not tenable; and (iv) Since an amount of ₹ 10,802.32 paid in excess, imposition of interest under Section 11AB of the Act does not arise and the same is required to be returned in accordance with the provisions of law. r. Thus, even at the appellate stage, the appellant company did not challenge the imposition of differential duty on account of clandestine removal but challenged the allegation of under-valuation with respect of 7 invoices only and claimed refund of ₹ 10,802.32, to have been paid in excess. From the final appellate order, it also appears that on 22.08.2005, the Managing Director appeared before the appellate authority and reiterated that there were some duty calculation mistake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged from the buyers were always clearly entered in the statutory records and registers. All goods from the factory were cleared under cover of proper Central Excise Invoices wherein the prices charged from the buyers were clearly mentioned. It is only these prices which were received by our company. There is absolutely no evidence whatsoever to the contrary. u. The Managing Director of the appellant company, for the first time, denied the allegations regarding clandestine removal on 07.12.2005 in his independent reply to show cause issued by the appellate authority regarding enhancement of penalty against him in personal capacity. In the same reply for the first time, he also- A. tried to explain the circumstances in which entries were made in his private diary and how they are to be read. B. After expiry of more than 4 years stated that on 15.11.2001 i.e the date of recording of his statement under Section 14 of the Act of 1944, he was not well and his mental and physical condition was not good enough to voluntarily make any statement and just to complete the proceedings he recorded several portions of the statement as per the dictates of the Departmental officer and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of customer, quantity etc. were made by the appellant No.2 i.e. Managing Director of BFCL himself and price quoted against seventy one entries were admitted by himself and he also agreed to pay duty difference in case of the rates being on higher side in the diary. The price shown against the corresponding entries in the diary also would obviously be the basis of assessable value of the goods, so cleared. Hence, their plea that the assessment of goods under Section 4 of the Act should be based on invoice value is not acceptable. This value does not reflect the transaction value, i.e. the actual payment received for the goods which is available in the diary written by Managing Director himself. In this connection, the appellants has placed reliance on the judgement of Hon ble Tribunal in the case of Purolator India Ltd. reported in 2005 (182) ELT 385 (Trib.). I agree that the transaction value and not normal price is to be considered for the purpose of section 4 of the Act. However, it does not mean that the invoice value has always been accepted because it cannot represent the transaction value i.e., actual value paid by the customer to the manufacturer, in case there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises. Further from para 4 of this judgement in the case of Shri Krishna Pipes Industries has been quoted, this para is reproduced below for reference:- In so far as question 1 2 are concerned, questions are framed on the assumption that the tribunal has granted relief without any justifiable reason. We find that Tribunal has in fact given a reason i.e. the disputed duty has been paid by the party even before the issue of Show Cause Notice and this would show that there was no question of any fraud, misrepresentation or suppression of facts. In fact, the Tribunal in Rashtriya Ispat Nigam Ltd. s case, held that where assessee deposits the duty even prior to the issue of a Show-Cause-Notice, penalty should not be imposed and interest should not be levied. The Supreme Court has rejected the appeal filed against the said order. Therefore, we find that order of the Tribunal is a reasoned order though brief and no question of law arises in regard to the said order. j Petition is therefore dismissed. It may be observed from above para 5 that there was no question of any fraud or suppression of facts involved in that case, whereas in this appeal before me, fraud and suppress ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h regards to the company that the entire duty demanded has already been paid and the same has never been contested before the authorities. However, the appeal filed by the Managing Director was partly allowed by deleting the enhancement of personal penalty from ₹ 20,000/- to 20,00,000/- by the first appellate authority and personal penalty imposed upon the managing director to the extent of ₹ 20,000/- vide Order-in-Original was restored considering the peculiar facts and circumstances of the case and in the opinion of the learned Tribunal, there was no justification for such stiff increase in personal penalty upon the Managing Director. z. Thus, the Order-in-Original as passed against the Managing Director of the appellant company attained finality, except to the extent of a separate Penalty of ₹ 10,77,678/- under section 11AC which was deleted by the appellate authority on the ground that such penalty can be imposed only upon the manufacturer i.e. appellant company. 71. The following tabular chart would reflect the operative part of the various orders passed by the authorities in connection with the appellant and its Managing Director: - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Personal penalty upon the managing director Enhanced to ₹ 20 lakhs after issuing show cause notice regarding proposed enhancement Enhancement of personal penalty deleted and penalty imposed by the Order-in- Original to the extent of ₹ 20,000/- restored. The nature of allegations against the Managing Director and the penalty which attained finality against him. 72. It was alleged against the managing director of the appellant company that he directly dealt with the affairs of the appellant company with regards to purchase, sales, supplier, buyer, rate finalization and himself maintained the records of clandestine clearances and additional consideration in ambassador diary. However, it is not in dispute that the entire purchase, sales, supplier, buyer, rate finalization of the appellant company was dealt with by the Managing Director. 73. The personal penalty upon the Managing director of the appellant company under Rule 209A or erstwhile Rule of 1944 read with Rule 26 of the Rules of 2001 amounting to ₹ 20,000/- as imposed by the Order-in-Original was duly confirmed by the learned appellate tribunal. The pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re examined under Section 14 of the Central Excise Act. It revealed to the authorities that procurement of raw materials, sales of finished goods and rates as well as selection of buyers etc. were all done by the Managing Director of the appellant and the recordings in the diary relating to sale purchase of the goods of the appellant company could be well explained by the Managing Director who had made the entries in the diary. Consequently, the Managing Director of the appellant was also examined under Section 14 of the Central Excise Act. During his examination he explained the entries made in the diary and as per the notings in the said diary it revealed that Period 2000-01 From 12.01.2001 to 31.03.2001 there were 23 dispatches and upon examination it was found that 21 out of 23 dispatches were made without cover of central excise. Alleged non payment was ₹ 3,86,733/- The rates of goods in relation to the remaining 2 dispatches were found to be higher as recorded in the diary upon comparison of the entries in diary and the corresponding invoices. Accordingly, there was alleged short payment of duty of ₹ 7,963/-. Total non-payment/short paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the adjudicating authority to the appellant as well as the Managing Director. It was alleged in para 5.1 that suo-moto deposit of the amount provided clinching and conclusive evidence of evasion of duty and that the Managing Director had stated on 15.11.2001(during his examination under section 14 of the Central Excise Act) that he would examine the issue regarding alleged short payment / non- payment, and if found that the dispatches were not covered under invoice, they shall bear the duty upon examination. In para 5.2 it was alleged that differential duty was still short by ₹ 58,673/- for the period 2000-01 and by ₹ 1,23,136/- for the period 2001-02. Both the noticees were inter-alia directed to show-cause as to why the duty already paid be not confirmed and differential amount of ₹ 1,81,809/- be not demanded. A personal penalty was also sought to be imposed upon the co- noticee i.e. Managing Director of the appellant company under Rule 209 of 1944 rules read with Rule 26 of 2001 rules. 83. On 07.03.2005, personal hearing was given to the advocate of the appellant who also submitted defence replies to the show-cause. The reply to the show cause notice has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to under-valuation, the duty liability was found to be ₹ 20,182/- by treating the sale price as cum- duty price. Thus, the total liability was calculated as ₹ 10,77,678/-, and ₹ 10,68,298/- having been deposited on 24.11.2001(prior to issuance of show cause), the balance was calculated and demanded only to the extent of ₹ 9,380/-. 86. The memorandum of appeal filed before the appellate authority has neither been filed by the appellant in the paper book nor it has been found in the records received from the respondent and the learned counsel for the appellant has stated that the grounds of appeal have to be gathered from the order passed by the appellate authority. 87. Even at the appellate stage, as is apparent from the appellate order itself, the appellant company did not challenge the imposition of differential duty on account of clandestine removal, but challenged the valuation with respect of 7 invoices only and claimed refund of ₹ 10,802.32, to have been paid in excess. From the final appellate order, it also appears that on 22.08.2005, the Managing Director appeared before the appellate authority and reiterated that there were some duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the entire payment even till the appellate stage clearly shows that the remaining amount, ₹ 10,57,495.68 (₹ 10,68,298/- minus ₹ 10,802.32) was admitted liability and as per the calculation of the appellant company, this related to removed goods without cover of excise invoice i.e., clandestine removal of 71 transactions as they had contested only allegation of short payment relating to undervaluation concerning 7 invoices. 88. In view of the aforesaid materials on record and upon reading of the Order-in-Original passed by the adjudicating authority as well as appellate order, I have no doubt that the appellant company never contested the duty demanded in connection with 71 transactions relating to removal of goods without cover of excise invoice i.e. clandestine removal and only contended that the sale price should be treated as cum duty price and offered its calculation as ₹ 10,57,495.68 which was duly accepted by the department. In fact, the appellant company had taken a definite stand that the invoices in connection with 71 transactions could not be issued due to inadvertence and such plea was also rejected. This specific stand of non-issuance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgement passed by the Hon ble Allahabad High Court reported in 2016 (334) E.L.T 595 (All.) (Triveni Engineering Industries Ltd. Vs. Commr. of C.Ex. Allahabad) is concerned, the same does not apply to the facts of the present case as in the said case the allegation of clandestine removal was based on assumption and on surmises and conjectures and demand of duty was contested by the noticee, which is not the case here. 92. So far as the judgement reported in 2017 (345) E.L.T 187 (Jhar.) (Balashri Metals Pvt. Ltd. Vs. Union of India) is concerned, the same does not apply to the facts and circumstances of this case as in the present case, on the one hand, the appellant did not dispute the allegation of clandestine removal of goods and on the other hand, the relied upon documents and evidences were duly forwarded to the appellant along with the show-cause notice to which the appellant as well as the co-noticee Managing Director had responded and accordingly there is no question of violation of principles of natural justice. 93. In the judgement passed by the Hon ble Gujarat High Court reported in 2013 (296) E.L.T 392 (Tri-Ahmd.) (Sakeen Alloys Pvt. Ltd. Vs. Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant has not even filed the statement of the Managing Director recorded under Section 14 of the Act of 1944, although admittedly, it formed part of the enclosures/relied upon evidences of the show- cause notice issued by the adjudicating authority. 96. The learned counsel for the appellant company has also submitted that defence reply cannot be treated as evidence. In the instance case the defence reply has not been treated as evidence. In fact the following were the basis of passing the order in original by the adjudicating authority:- a. the evidences of the various officers of the appellant company, including that of the Managing Director recorded under Section 14 of the Act of 1944, were on record; b. The Managing Director during his examination under Section 14 of the Act of 1944 stated that he would get the matter examined and differential, if any, would be paid; c. The appellant company had taken a specific stand that the invoices in connection with 71 transactions could not be issued due to inadvertence and paid the admitted amount through cheques d. Appellant company claimed refund of ₹ 10,802.32 only being the excess payment as per their ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said case, the Hon ble Supreme court held that an order of assessment under taxing law does not become final before the adjudicating authority in every matter, it is subject to appeal and the appellate authority can even add or subtract certain items from the order of assessment and such order of appellate authority could be treated as an order of assessment. In the said case of MIL India Ltd. (supra), it was also held that power of remand by the appellate authority was taken away with effect from 11.05.2001 by amending Section 35- A, therefore the appellate authority continues to exercise the powers of adjudicating authority in the matter of assessment, and under Section 35B, any person aggrieved by the order of the commissioner as an adjudicating authority could move the tribunal and the order passed by the appellate authority is to be treated as an order of the adjudicating authority. The aforesaid principle of law has no application in the present case as the appellant company continued with the same points even before the appellate authority which were raised before the adjudicating authority. In fact, before the appellate authority also, the appellant company admitted its du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed by the appellant company throughout and the fact that the entries in the diary which were in short forms were explained by the managing director during his statement recorded under section 14 of the Central Excise Act. The reply to the show cause notice issued by the adjudicating authority has not at all been treated as evidence. 100. As a cumulative effect of the aforesaid discussions, the finding of the learned tribunal that the duty demand was never contested by the appellant company before the authorities is not perverse, rather the same is based on materials, including the aforesaid specific stand of admission by the appellant company of clandestine removal of goods with regards to 71 transactions and claiming non issuance of corresponding invoices to be on account of inadvertence, before the adjudicating as well as appellate authority; coupled with the fact that refund of ₹ 10,802.32 only was claimed and the remaining deposit of ₹ 10,57,495.68 stood as admitted liability throughout. The statement of the Managing Director, recorded under Section 14 of the Act of 1944, was only one, amongst other materials, coupled with clear admission of the appellant c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , when seen in the light of the aforesaid circumstances certainly amounts to admission on the part of the appellant regarding clandestine removal of goods relating to 71 transactions. So far as the judgement reported in (1997) 5 SCC 536, Mafatlal Industries Ltd. And others Vs. Union of India others, para 92 , which has been heavily relied upon by the learned counsel for the appellant is concerned, the same is quoted as under along with para 93 and 94 to complete the narration: - 92. It is then pointed out by the learned counsel for the petitioners- appellants that if the above interpretation is placed upon amended Section 11-B, a curious consequence will follow. It is submitted that a claim for refund has to be filed within six months from the relevant date according to Section 11-B and the expression relevant date has been defined in clause (B) of the Explanation appended to sub-section (1) of Section 11-B to mean the date of payment of duty in cases other than those falling under clauses (a), (b), (c), (d) and (e) of the said Explanation. It is submitted that clauses (a) to (e) deal with certain specific situations whereas the one applicable in most cases is the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer, to whom the letter of protest is given, to sit in judgment over the grounds. The assessee need not particularise the grounds of protest. It is open to him to say that according to him, the duty is not exigible according to law. All that the proper officer is empowered to do is to acknowledge the letter of protest when delivered to him - and that acknowledgement shall be the proof that the duty has been paid under protest. A reading of the rule shows that the procedure prescribed therein is evolved only with a view to keep a record of the payment of duty under protest. It is meant to obviate any dispute whether the payment is made under protest or not. Any person paying the duty under protest has to follow the procedure prescribed by the rule and once he does so, it shall be taken that he has paid the duty under protest. The period of limitation of six months will then have no application to him. Upon perusal of the para 92 of the judgement, I find that it simply lays down that whenever a payment is made even without protest and the assessee proposes to contest its liability of duty, rate, classification or any other aspect, by way of appeal or revision or in higher court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid judgements do not apply to the facts and circumstances of this case. 104. In view of the aforesaid findings, the issue no. (iii) is also decided against the appellant and in favour of the respondent. Issue no. iv. 105. The Managing Director of the assessee -appellant company was, inter alia, directed to show cause as to why penalty under Rule 209A of 1944 Rules read with Rule 26 of the 2001 Rules, be not imposed upon him. It was alleged that (i) the clandestine clearances resulting in non-payment of excise duty and undervalued clearances resulting in short payment of excise duty were carried out at the behest of the Managing Director (ii) he himself was maintaining the private diary and receipt of additional consideration (iii) he was consciously and with full knowledge concerned with selling, dispatching and/or otherwise dealing with excisable goods which he had reason to believe are liable to confiscation. 106. Rule 209A of Central Excise Rules, 1944 and Rule 26 of Central Excise Rules, 2001 are identically worded. Rule 26 of Central Excise Rules, 2001 has already been quoted and explained above . The period involved in the case are 2000-01 and 2001-02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Director under Section 11AC of the Act of 1944 on the ground that penalty under the said section cannot be imposed upon a person other than the manufacturer has also recorded but considering that he is center of all the activities and there is existence of mens rea on his part of doubt , he is liable for heavy deterrent penalty under rule 209A of central excise rules 1944 read with rule 26 of Central excise Rules, 2001. The aforesaid sentence in italics is self-contradictory and the words there is existence of mensrea on his part of doubt, he is liable for heavy deterrent penalty are incomprehensible and meaningless. Otherwise also, orders and judgements are required to be read as a whole and upon perusal of the findings recorded in the earlier portions of the appellate judgement, it is clear that the appellate authority has recorded a well-reasoned finding of mens-rea against the Managing Director. 108. Penalties imposed upon Managing Director of the company The following penalties were imposed upon the Managing Director: By the adjudicating authority: - a. Penalty of ₹ 10,77,678/- under Section 11 AC of Central Excise Act, 1944 -equivalent to duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... control of the Managing Director and because of his controlling position he was directing the company and the order of penalty passed against the Managing Director of the company has attained finality. It is not in dispute that the foundational facts for passing the order of penalty against the company and its Managing Director are identical. Rather, the appellant company, though a juristic person cannot distance itself from the act of clandestine removal/under valuation of its goods due to the acts and omissions of its Managing Director who was admittedly responsible for sales and purchases of the goods of the appellant company and was also a co-noticee in the adjudication proceedings. Further, the quantum of penalty upon the Managing Director is irrelevant and what is relevant is the provision under which the penalty has been imposed. Merely because a small amount of penalty has been imposed upon the Managing Director, the same does not erase the proved allegations resulting in imposition of penalty prescribed by law i.e clandestine/ undervaluation of cleared goods of the assessee company. It is important to note that this appeal has been filed through the same Managing Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut are statements made in answer to a notice under Section 171-A of the Sea Customs Act. As they are not made subject to the safeguards under which confessions are recorded by Magistrates they must be specially scrutinised to finding out if they were made under threat or promise from someone in authority. If after such scrutiny they are considered to be voluntary, they may be received against the maker and in the same way as confessions are received, also against a co-accused jointly tried with him. Section 30 of the Evidence Act does not limit itself to confessions made to Magistrates, nor do the earlier sections do so, and hence there is no bar to its proper application to the statements such as we have here. 115. So far as the judgement passed in the case of Sarva Shramik Sangh Versus Indian Oil Corporation Limited and others reported in (2009) 11 SCC 609 is concerned, it has been argued by the learned counsel for the appellant that when the parties are different, issues are different, reliefs are different, the question of either res judicata, or finality of proceedings, acquiescence or estoppel will not arise and they have stressed that in the present case finality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its liability under the Act of 1944. 117. In the present case, the statements of the co-noticee-Managing Director has, inter alia, been rightly used against the appellant company as they were proceeded together in the adjudication proceedings. Additionally, there were other materials on record including admission of the appellant company regarding 71 transactions without cover of excise invoice claimed to be due to inadvertence. 118. It is true that the assessee company and its Managing Director are two distinct persons in the eyes of law but it is equally true that in the instant case the alleged acts and omissions are attributable to the company as a juristic person represented by its managing director as well as attributable to its Managing Director on the same foundational facts, against whom the order of penalty for the very same acts and omissions has become final. 119. The order of differential duty and penalty against the appellant company is directly and inseparably linked with imposition of penalty upon its Managing Director and both, the company as well as the Managing Director, have been found guilty of clandestine removal of the goods of the company on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned counsel has also submitted that the judgement reported in 2019 (368) E.L.T. 710 (Tri-Del) [Silicone Concepts International Pvt. Ltd. Vs. Pr. Commr. of Cus., ICD, TKD (Import), New Delhi] holding that statement recorded under Section 14 of the 1944 Act is a substitute of examination-in- chief and the witness has to be offered for cross-examination, is per incuriam, being passed in ignorance of the relevant statute or judicial precedent. It has been argued that if a witness is examined in chief while making a statement under Section 14 but not allowed to be cross-examined, it will amount to giving up the witness, the converse is also true, i.e. a witness who is not examined in chief, but offered for cross-examination, would amount to giving up the witness. For this argument, specific reference is made to the judgement reported in (1995) 3 SCC 367. 125. The respondent, on the other hand, has opposed the submissions and has submitted that the statements recorded under Section 14 of the Act of 1944 are per-se admissible in evidence subject to scrutiny by the court itself in the light of Section 24 of the Indian Evidence Act, 1944 as to whether the statements have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to state the truth and to produce such documents or things as may be required. Similar provision exists under Section 108 of the Customs Act as held in the case reported in ( 2000) 7 SCC 53 (Assistant Collector of Central Excise, Rajamundry Vs. Duncan Agro Industries Ltd. and Others), relied upon by the respondent. It has been held in para 9 of the aforesaid judgement that Section 14 of the Central Excise Act, 1944 is practically the same as Section 108 of the Customs Act. The Sea Customs Act was repealed vide The Customs Act, 1962 and Section 108 of the Customs Act, 1962 is pari materia to Section 171A of Sea Customs Act. 129. The judgements passed under the Customs Act dealing with Section 108 were considered in the case of Duncan Agro (supra) while dealing with the issue, as to whether, it is necessary to comply with the precautions envisaged in Section 164 of Code of Criminal Procedure i.e. recording of confessions and for the statements, when Customs Officers record statement under Section 108 of the Customs Act. The findings of the Hon ble Supreme Court in the case of Duncan Agro (supra) in Paragraph nos. 11, 12, 13, 14, 15 and 16 are quoted as under: 11. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing observations: These statements are not confessions recorded by a Magistrate under Section 164 of the Code of Criminal Procedure but are statements made in answer to a notice under Section 171-A of the Sea Customs Act. As they are not made subject to the safeguards under which confessions are recorded by Magistrates they must be specially scrutinised to finding out if they were made under threat or promise from someone in authority. If after such scrutiny they are considered to be voluntary, they may be received against the maker and in the same way as confessions are received, also against a co-accused jointly tried with him. 14. In Ramesh Chandra Mehta v. State of W.B. it was held that when an inquiry is being conducted under Section 108 of the Customs Act, and a statement is given by a person against whom the inquiry is being held it is not a statement made by a person accused of an offence and the person who gives the statement does not stand in the character of an accused person . This was followed by this Court in Percy Rustomji Basta v. State of Maharashtra. It was a case in which the appellant was convicted under Section 135 of the Customs Act and Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the premises envisaged in Section 24 of the Evidence Act as held in the case of Duncan Agro Industries Ltd. (Supra). Thus, this court is of the considered view that the maker of the statement under Section 14 of the Act of 1944 need not be summoned again and depose again before the adjudicating officer, by way of examination in chief, to prove the statement or reiterate the same statement. This is more so, when the statement under Section 14 is made by the co-noticee of the show cause in the adjudication procedure as in the present case. In case the statement recorded under section 14 of the Central Excise Act (wherein the person concerned is already under legal obligation to state the truth) is relied upon by the adjudicating authority in the show cause notice and the statement is an enclosure to the show cause notice , it is enough to indicate that prima-facie scrutiny has been done by the adjudicating authority and it is for the noticee to either accept or deny such statement on the grounds of section 24 of the Evidence Act and call for cross-examination of such person who would then appear and may explain the circumstances under which such statement under section 14 was record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided by the Hon ble Supreme Court reported in (2015) 13 SCC 198 (IVRCL Infrastructure and Projects Limited Vs. Commissioner of Customs, Chennai) , it was held that the statements made to an officer of customs under Section 108 of the Customs Act, 1962 are admissible in evidence and the court has merely to scrutinize whether the admissions were made voluntarily or otherwise. In paragraph 8 of the aforesaid judgment, it was held as under: 8. It is settled law that statements made to an officer of Customs are admissible in evidence under Section 108 of the Customs Act, 1962. This Court has held in Gulam Hussain Shaikh Chougule v. Supt. of Customs, after quoting from several other judgments, that such statements are admissible in evidence. The Court has merely to scrutinise whether the admissions made were voluntary or otherwise. In the present case, it is clear that unretracted statements made by none other than the Vice-President of the appellant Company, representatives of Marshalls, and a representative of the National Highways Authority of India, having never been retracted later, were made voluntarily. Reliance on the said statements, therefore, by the authorities below c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned order passed by the adjudicating authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the adjudicating authority. . 7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. .. 8. In view of the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the show-cause notice. 9. We, thus, set aside the impugned order as passed by the Tribunal and allow this appeal. No costs. This judgement clearly demonstrates the mode and method of discrediting and disputing the statement of the witnesses recorded during investigation followed by issuance of show cause based on such statement. The assessee may dispute the statement in his reply and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 20,000/- imposed by the adjudicating authority without disturbing the finding of adjudicating authority. The penalty imposed upon the Managing Director has attained finality. 136. Thus, the statements recorded under Section 14 of the Act of 1944, when seen in the light of aforesaid judicial pronouncements, are per-se admissible in evidence and can be relied upon by the adjudicating authority in the show cause upon being satisfied that the statements were voluntary in nature and not hit by Section 24 of the Evidence Act. For this purpose, there is no requirement for the maker of the statement to be summoned again and examined in chief by the adjudicating authority, as such person has already been summoned and examined by an authorized Central Excise Officer before whom the person was already under a legal obligation to state the truth followed by penal consequences for making false statement. Accordingly, in absence of any adverse material on record attracting Section 24 of the Indian Evidence Act, the veracity of the statements recorded under Section 14 cannot be doubted and can be relied upon by the adjudicating authority in the show cause notice. In case the noticee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been pressurized by the department in absence of the Managing Director, to deposit the amount. Further, such allegation of pressure from the side of the department was made by the Managing Director for the first time after expiry of more than 4 years from the date of recording of his statement that too at appellate stage when a show cause was issued to him for enhancement of personal penalty. The aforesaid plea of deposit under pressure is further negated and is apparently an afterthought, as during the adjudication proceedings as well as appellate proceedings, it was the specific case of the appellant company that they have paid ₹ 10,802.32 in excess and only the excess amount was to be refunded to them. This specific stand was stressed upon to avoid penalty and interest by stating that the duty amount was deposited prior to show cause notice as the 71 transactions were cleared without invoices due to inadvertence. Thus, there is no material whatsoever from the side of the appellant company to indicate an element of coercion or duress or dictation extended from the side of the person in authority so as to discard the statements made by the Managing Director recorded under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia, introduced Section 9A to Section 9D in the Act of 1944 vide amendment Act of 1973. Section 9D is quoted hereunder for ready reference: Section 9D. Relevancy of statements under certain circumstances. (1) A statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, - (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse partly, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceeding under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding before the court, is neither absolute nor universal and is circumscribed by the words so far as may be. The import of the words so far as may be is required to be considered and given due weightage keeping in view the law already summarized above regarding admissibility and evidentiary value of the statements recorded under section 14 of the Excise Act in the light of judicial pronouncements. 145. The statements referred to in Section 9D are neither required to be recorded under an oath nor under any statutory legal obligation to speak the truth. The only requirement is that it should have been recorded by a gazetted central excise officer under the Act of 1944 and should have been made and signed by the person concerned. 146. There are different provisions under the Act of 1944 for recording and collecting evidences/ recording of statement of witnesses which include Sections 14 and 21. There is wide difference between the mode and manner of recording of statement under Section 14 and Section 21 of the Act of 1944. 147. A person whose evidence/statement is to be recorded under Section 14 is summoned by a Central Excise Officer duly empowered by the Central Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 9D(1)(a) read with Section 9D (2) will come into play and such statement will be relevant in terms of Section 9D(1)(a) read with Section 9D(2) if Section 9D is invoked by the adjudicating authority. Invocation of Section 9D(1)(a) read with Section 9D (2) will be subject to any objection or contest by the noticee, for which the adjudicating authority has to pass a reasoned order which can also be challenged in an appropriate proceeding. Relevance of such statement of the category of persons mentioned under Section 9D(1)(a) is otherwise also referrable to section 32 and 33 of the Evidence Act. 151. Again the condition precedent for invoking Section 9D is that the statement must be made and signed by a person before any Central Excise officer of a Gazetted rank during course of any inquiry or proceeding under the Act of 1944 and it is important to note that Section 14 of the Act of 1944 requires the statement to be recorded pursuant to summons issued by a Central Excise Officer duly empowered by the Central Government in this behalf, and there is no such rider that he ought to be a gazetted central excise officer. It can certainly be possible that the central government empo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if he so desires. Meaning thereby, if a request for hearing is not made by the noticee, the authority may even proceed to decide the matter on the basis of materials relied upon in the show cause notice including the statement of the persons recorded by issuing summons under Section 14. This course of action can be permissible only if the statements recorded under Section 14 are per-se admissible in evidence without calling upon the person concerned to reiterate or exhibit his statement before the adjudicating authority again in order to get his statement admitted. In the instant case also, the show-cause notice was in accordance with Section 33A of the Act of 1944, to which the noticees responded and at their request an opportunity of hearing was given and they were represented by their advocate before the adjudicating authority who also filed the show cause replies on 07.03.2005. However, the statement recorded under section 14 of the co- noticee- Managing Director was neither retracted nor any objection was raised before the adjudicating authority in terms of Section 24 of the Evidence Act, rather a specific stand was taken that invoices in connection with 71 transactions could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence of witnesses recorded by the committing magistrate could be treated, at the discretion of the sessions judge, as substantive evidence during trial, however, by its amendment vide Act 26 of 1955 some restrictions were made. Section 288 of Code of Criminal Procedure, 1898 was subject matter of consideration by various High Courts as recorded in the judgement itself and it has been observed in para 18 that the various high courts, notwithstanding Section 288 of Code of Criminal Procedure, 1898, have consistently taken a view that there is no procedure whereby the prosecution is permitted to tender a witness for cross-examination only, without there being any examination in chief in relation to which the witness can be cross- examined. It has been held that the practice of tendering the witness for cross examination has been rightly condemned by the various high courts. The Hon ble Supreme Court at para-20 of the aforesaid judgment further held that 20 . After the coming into force of the Criminal Procedure Code, 1973, which replaced the Code of 1898, recording of evidence in commitment proceedings has been totally dispensed with and Section 288 of that Code has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under challenge and the Hon ble Delhi High Court upheld the validity of the said Section. The Hon ble Delhi High Court has taken a view that Section 9D comes into play under following five circumstances: - (a) When the witness is dead. (b) When he cannot be found. (c) When he is incapable of giving evidence. (d) When he is kept out of the way by the adverse party. (e) When his presence cannot be obtained without an amount of delay or expense which the Court considers unreasonable. It has also been held at para-26 of the aforesaid judgement that the provisions of Section 9D of the Act are necessary to ensure that under certain circumstances, as enumerated therein, decision making in a case cannot be allowed to continue in perpetuity. The Hon ble High Court also held that these provisions are based on the Doctrine of Necessity. It provides for relevancy of statements recorded under Section 14 of the Act dispensing with or without the opportunity for testing the truth of such evidence by cross-examination, when a person is dead or incapable of giving evidence or cannot be found, no better evidence can be had in the circumstances than the statement tendered by wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble Delhi High Court does not apply to the facts and circumstances of this case. C. The appellant has relied upon judgement reported in 2007 (220) E.L.T. 3 (S.C.) (Mohtesham Mohd. Ismail Vs. Spl. Director, Enforcement Directorate) (Supra), para 16, which reads as follows: 16. We may, however, notice that recently in Francis Stanly @ Stalin v. Intelligence Officer, Narcotic Control Bureau, Thiruvanthapuram [2006 (13) SCALE 386], this Court has emphasized that confession only if found to be voluntary and free from pressure, can be accepted. A confession purported to have been made before an authority would require a closure scrutiny. It is furthermore now well-settled that the court must seek corroboration of the purported confession from independent sources. The para 17 of the judgement refers to following passage of the judgement of Assistant Collector of Central Excise Rajamundry Vs. Duncan Agro Industries Ltd. (Supra) : The inculpatory statement made by any person under Section 108 is to non-police personnel and hence it has no tinge of inadmissibility in evidence if it was made when the person concerned was not then in police custody. Nonetheles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess on an incorrect understanding that it was not the requirement of law. The law settled in this regard has been mentioned in para 42 as under: 42. It is settled law that the denial of an opportunity of cross- examination of a witness whose statements have been relied upon in the adjudication order would vitiate the order of adjudication. In Basudev Garg v. Commissioner of Customs 2013 (294) E.L.T. 353 (Del.), this Court referred to Section 9D of the CE Act and noted that even while upholding its constitutional validity in J K Cigarettes Ltd. v. Collector of Central Excise - 2011 (22) S.T.R. 225 (Del.) = 2009 (242) E.L.T. 189 (Del.), a Division Bench of this Court had observed that the circumstances under which the right of cross-examination can be taken away would have to be exceptional . This would include circumstances where the person who had given the statement was dead or cannot be found or is incapable of giving evidence or is kept out of the way by adverse party or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances, the Court considers unreasonable. It was held by the Court in Basudev Garg (supra) that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 17.06.2016 respectively and the Hon ble High Court relied upon the judgement passed by Hon ble Delhi High Court in the case of J K Cigarettes Ltd. v. Collector of Central Excise reported in 2011 (22) S.T.R. 225 (Del.)(supra). The Hon ble Chhattisgarh High Court in judgement passed in the case of Hi Tech Abrasives Ltd. Vs. Commissioner of Central Excise and Customs, Raipur reported in 2018 (362) E.L.T. 961 (Chhattisgarh) has further relied upon the aforesaid judgement passed in the case of Ambika International Vs. Union of India [2018 (361) E.L.T. 90 (P H)]. In the aforesaid judgements passed by Hon ble Punjab and Haryana High Court followed by Hon ble Chhattisgarh High Court, in sum and substance, it has been held that the statement recorded under Section 14 of the Act of 1944 is irrelevant material unless the same is brought on record by examination of the maker of the statement again by the adjudicating authority and then the adjudicating authority would admit the statement in evidence in terms of Section 9D(1) (b) read with Section 9(2). In the aforesaid judgements passed by Hon ble Punjab and Haryana High Court and Hon ble Chhattisgarh High Court, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied upon evidence while issuing show-cause notice. iii. Upon scrutiny under Section 24 of the Evidence Act, such statement recorded under Section 14 of the Act of 1944 can be relied upon by the adjudicating authority while issuing show-cause notice without calling upon the person to depose as a witness in terms of Section 9D (1) (b) read with Section 9D (2) of the Act of 1944. The moment the adjudicating authority relies upon the statement recorded under section 14 of the Central Excise Act, it is indicative of the fact that necessary scrutiny in terms of Section 24 of the Evidence Act has been done and no separate order is required to be passed to this effect and this is also subject to any objection to be raised by the noticee/ person whose statement has been recorded. This is because the recording of evidence is permissible under Section 14 of the Act of 1944 by issuing summons by a Central Excise Officer duly empowered by the Central Government in this behalf and the person concerned is under statutory legal obligation to disclose the truth and there are penal consequences for giving false evidence and the recording of evidence under section 14 of the Act of 1944 is deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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