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TMI Blog2022 (5) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... ries found recorded in the records of said Transporters and brokers are not sufficient to confirm the demand of duty and allegation of clandestine removal. It is settled law that documents recovered from a third party can be used against the manufacturer to prove clandestine removal only when these are supported with corroborative evidences. The Revenue has alleged that huge quantity of finished products have been manufactured and cleared clandestinely without payment of Central Excise duty - the investigation has not tried to approach any of the buyers to corroborate the documents recovered from transporter and broker. The investigation also failed to establish the procurement of raw materials attributed to the huge quantity of alleged clandestine removal. In fact on the date of search, no discrepancy was recorded in respect of stock of raw materials and finished goods vis-a-vis that recorded in statutory records. It is true that the evidence which is required to be produced in quasi judicial proceedings should be such that the charges get established on the basis of preponderance of probability. The standard of evidences need not be as high as in criminal proceedings, where the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019, 11260 of 2019, 11329 of 2019, 11330 of 2019, 11662 of 2019, 11665 of 2019, 11693 of 2019, 11785 of 2019, 11813 of 2019, 11888 of 2019, 11963 of 2019, 11968 of 2019, 12134 of 2019, 12135 of 2019, 12201 of 2019, 12202 of 2019, 12203 of 2019, 12212 of 2019, 12214 of 2019, 12228 of 2019, 12259 of 2019, 12319 of 2019, 12320 of 2019, 12323 of 2019, 12336 of 2019, 12445 of 2019, 12469 of 2019, 12470 of 2019, 12497 of 2019, 12498 of 2019, 12562 of 2019, 12565 of 2019, 12599 of 2019, 12635 of 2019, 12636 of 2019, 12736 of 2019, 10200 of 2021, 10268 of 2021, 10269 of 2021, 10270 of 2021, 10278 of 2021, 10504 of 2021 ORDER The following appeals are arising out of orders wherein a common investigations/evidences were relied upon therefore, they are taken up together for disposal. A chart showing the details of Appeals and demand therein is as under:- Sr. no Name Appeal No Impugned Order Date Duty Penalty 1 Vinodbhai Amarshibhai patel E/10924/2019 OIA : BHV-EXCUS-000-APP-016-019-2019 24/01/2019 0 1655682 2 Vijay kumar & Co E/10670/2019 OIA : BHV-EXCUS-000-APP-337-339-2018-19 26.12.2018 5202584 5202584 3 Kishorbhai Amarshibhai Patel E/11665/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hai R patel E/11316/2018 OIA : BHV-EXCUS-000-APP-228-231-2017-18 3.9.2018 0 4785885 25 Jivrajbhai R patel E/11502/2018 OIA : BHV-EXCUS-000-APP-139-141/2017-18 19/02/2018 0 3834615 26 Vinodbhai Amarshibhai patel E/11514/2018 OIA : BHV-EXCUS-000-APP-139-141/2017-18 19/02/2018 0 1097853 27 Madhav Industrial Corporation E/11313/2018 OIA : BHV-EXCUS-000-APP-139-141/2017-18 19.2.2018 3834615 3834615 28 Madhav Steel E/11315/2018 OIA : BHV-EXCUS-000-APP-228-231-2017-18 9.3.2018 4785882 4785882 29 Mahendra Ambalal Rana E/12565/2019 OIA : BHV-EXCUS-000-APP-188-195-2019 27/06/2019 0 796849 30 Kishorbhai Amarshibhai Patel E/12562/2019 OIA : BHV-EXCUS-000-APP-176-179-2019 21.6.2019 0 232080 31 Kishorbhai Amarshibhai Patel E/12498/2019 OIA : BHV-EXCUS-000-APP-188-195-2019 27/06/2019 0 1295021 32 Kishorbhai Amarshibhai Patel E/12497/2019 OIA : BHV-EXCUS-000-APP-184-187-2019 27/06/2019 0 350000 33 Mukesh Balabhai Patel E/12470/2019 OIA : BHV-EXCUS-000-APP-134-141-2019 30/05/2019 0 1500000 34 R K Industries E/12469/2019 OIA : BHV-EXCUS-000-APP-134-141-2019 30/05/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 31378 56 Bharat Manharbhai Sheth E/10614/2019 OIA : BHV-EXCUS-000-APP-241-18-19 23/08/2018 0 1572839 57 Vijaykumar Kakaram Bansal E/10970/2019 OIA : BHV-EXCUS-000-APP-048-053-2019 27.2.2019 0 1122578 58 Vinodbhai Amarshibhai patel E/10504/2019 OIO : BHV-EXCUS-000-COMM-007-2020-21 23/03/2018 0 2891968 59 Mahendra Ambalal Rana E/10278/2021 OIA : BVR-EXCUS-000-COMM-007-2020-21 26/11/2020 0 2000000 60 Shree Ram Steel & Rolling Industries E/10270/2021 OIA : BVR-EXCUS-000-COMM-007-2020-21 26/11/2020 20355586 20355586 61 Chetanbhai M Patel E/10269/2021 OIO : BHV-EXCUS-000-COMM-007-2020-21 26/11/2020 0 2000000 62 Kishorbhai Amarshibhai Patel E/10268/2021 OIO : BHV-EXCUS-000-COMM-007-2020-21 26/11/2020 0 2000000 63 Vinodbhai Amarshibhai patel E/11963/2019 OIA : BHV-EXCUS-000-APP-099-102-2019 9.4.2019 0 23435 64 Kishorbhai Amarshibhai Patel E/11260/2019 OIA : BHV-EXCUS-000-APP-028-031-2019 31/01/2019 0 2777814 65 Hatimi Steels E/11060/2019 OIA : BHV-EXCUS-000-APP-099-102-2019 04-09-19 5824199 5824199 66 Kishorbhai Amarshibhai Patel E/11968/2019 OIA : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transporters a worksheet was prepared showing the booking truck/ vehicles for loading of goods made by or on behalf of the appellants. The details of worksheet were compared with the invoices of appellants. During the comparison of said booking registers of transport agent it was found by the investigation that in respect of some of the entries made in such booking register, invoices were not issued and it was alleged that the goods of entries made in the registers for which no excise invoices were issued, have been removed clandestinely. Investigation also conducted at the end of Shri Bharat Seth, Shri Vinod Patel and Krishna Patel brokers. After completion of the investigation, show cause notices were issued to the appellants who are ship breaking manufacturer and also other persons such as transporters, transport agent, sales brokers. On consideration of the appellants' replies which they filed, the adjudicating authority vide impugned orders rejected their defence and confirmed the duty demand. Penalties were imposed on all the noticees. Being aggrieved with, in majority cases appellants preferred the appealsbefore Commissioner (Appeals). The appeals having been dismissed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y's records. He placed reliance on the following judgments: * SULEKHRAM STEELS P. LTD v CCE,- 2011 (273) ELT 140 * CHARMINAR BOTTLING CO.P. Ltd. V CCE- 2005 (192) ELT 1057 * RAMA SHYAM PAPERS LTD v CCE- 2004 (168) ELT 494 * STAR ALLOYS & CHEMICALS P.LTD v CCE- 2019 (21) GSTL 174 * ATUL BANSAL v CCE- 2019 (8) TMI 959 Thirdly the said transporters have not been examined in the adjudication proceedings as required by Section 9D of the Central Excise Act, 1944 and an opportunity to cross examine them has not been given to the appellants. Consequently their booking registers and their statements have no evidentiary value for establishing the alleged clandestine removal. He placed reliance on the following judgments: * J & K CIGARETTES LTD v CCE- 2009 (242) ELT 189 (Del) * BASUDEV GARG v CC- 2013 (294) ELT 353 * ANDAMAN TIMBER INDUSTRIES Vs. CCE, KOLKATA- 2015 (324) E.L.T. 641 (S.C.) * ATUL BANSAL v CCE- 2019 (8) TMI 959. The approach of the adjudicating authority and Commissioner appeals in denying the cross examination is totally contrary to the law laid down in the aforesaid judgments. 2.1 Without prejudice to the above submissions, he further submits that in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Central Excise Act, 1944. He submits that in section 4 or under any law there is no concept of deemed normal price. He submits that there is no evidence whatever to show that any amount over and above the invoice price/transaction value was recovered/ received by the appellants from the buyers. Therefore the basis of alleged undervaluation is without any support of law. 2.5 On behalf of other appellants, S/Shri. Uday Madhukar Joshi, Rahul Patel, S.J. Vyas, Rahul Gajera, Sarju Mehta (CA), P.D. Rachchh and Ms. Shamita Patel, Advocates and Shri R.C. Prasad-Consultant appeared and they adapted the argument made by Shri. J.C. Patel learned counsel. Some of the appellants thru their Advocates/Consultant/Chartered Accountant filed additional submissions which are taken on record. 2.6 As regard appellant M/s. Vijay Kumar & Co., there is confiscation of cash of Rs.17.50Lacs. In this regard the learned counsel Shri S.J. Vyas submits that the investigation could not establish that the said cash is generated as sale proceeds of alleged clandestine removal. He submits that confiscation of cash was ordered under Section 121 of Customs Act read with Section 12 of the Central Excise Act, 1944 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third parties' records of Transporters and brokers cannot be basis for clandestine removal. 4.1 It is settled law that documents recovered from a third party can be used against the manufacturer to prove clandestine removal only when these are supported with corroborative evidences. The Revenue has alleged that huge quantity of finished products have been manufactured and cleared clandestinely without payment of Central Excise duty. The data/ records recovered from the premises of third party, no doubt, may give rise to suspicion. However, clandestine manufacture and clearance alleged against the appellant is a very serious charge which needs to be proved by Revenue by producing tangible and reliable evidences. For clandestine clearance of such huge quantities of finished products, corresponding quantity of raw materials is also required. The investigation could not adduce a tip of evidence in this regard. The finished products allegedly have been cleared to various customers. In fact, in the transporters and brokers records, names of several buyers have been indicated. However, we are in utter surprise that investigation has not tried to approach any of the buyers to corroborate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o evidence recovered from the appellant manufacturers. The entire case was made out on the basis of third party records and statements. It is admitted fact that appellant have strongly objected the statements given by third parties which were used against the appellants (manufacturers). The appellants during the adjudication requested for cross-examination of the witnesses however, the same was not provided by the adjudicating authority. In any case, the statements recorded under Section 14 of Central Excise Act can be admitted as an evidence only when the same is examined during the adjudication as mandated under Section 9D of Central Excise Act. In the present case, the statements being given by third parties it became more important to examine those witnesses for using their statements against the appellant for fastening the demand. Since the demand is made on the basis of statements and the third parties records without providing the cross examination. The entire case of the department gets demolished only on this ground alone. In this regard the appellant gets support from the judgments which are reproduced below:- * Andaman timbers Industries V/s. CCE, Kolkata- 2015 (324) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 8. In view 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." * BASUDEV GARG V/s. CC.2013 (294) ELT 353. 10. Insofar as the general propositions are concerned, there can be no denying that when any statement is used against the assessee, an opportunity of cross-examining the persons who made those statements ought to be given to the assessee. This is clear from the observations contained in Swadeshi Polytex Ltd. (supra) and Laxman Exports Limited (supra). Apart from this, the decision of this court in J&K Cigarettes Ltd. (supra) clinches the issue in favour of the appellant. In that case, the validity of Section 9D of the Central Excise Act, 1944 was in question. The said Section 9D of the Central Excise Act, 1944 reads as under :- "9D. Relevancy of statement under certain circumstances. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to any proceeding under this Act, other than a proceeding before a court, as they apply in relation to a proceeding before a court." It is apparent that both the provisions are identical. 14. The Division Bench also observed that though it cannot be denied that the right of cross-examination in any quasi judicial proceeding is a valuable right given to the accused/Noticee, as these proceedings may have adverse consequences to the accused, at the same time, under certain circumstances, this right of cross-examination can be taken away. The court also observed that such circumstances have to be exceptional and that those circumstances have been stipulated in Section 9D of the Central Excise Act, 1944. The circumstances referred to in Section 9D, as also in Section 138B, included circumstances where the person who had given a 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 and expense which, under the circumstances of the case, the Court considers unreasonable. It is clear that unless such circumstances exist, the Noticee would have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued the scrap and evaded Central Excise Duty. After undergoing the changes in Section 4 in the year 2000, the value of excisable goods is the transaction value and there is no provision to adopt any other deemed value. Therefore only on the basis of rate published in a publication, the transaction value can not be doubted. Except the basis of publication, there is no charge of extra consideration flowing from buyers of goods to the appellant over and above the invoice value. Therefore charge of under valuation has no legs to stand. 4.6 In one case of Vijay Kumar & Co., the adjudicating authority has confiscated the cash of Rs.17.50Lacs. In this regard we find that the investigation could not establish that the said cash is towards the sale proceed of alleged clandestine removal of goods. On the contrary, the appellant clearly established the source of the said cash. They have given the names of the buyers from whom they have received the cash and the same was accounted for in the appellant's cash book. Therefore we do not find any reason for confiscation of cash. Hence in our considered view that the confiscation of cash must be vacated and we do so. 05. As per the above discussi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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