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TMI Blog2023 (10) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... the exclusion of any material facts, in a show cause notice is, in effect, examination-in-chief and credibility of the contents therein for resort to conclusion of detriment rests upon quicksand except by assertion through challenge of cross-examination ; we are unable to appreciate the notion of lack of bias in such denial that, especially in the light of section 9D of Central Excise Act, 1944, should not have occurred save with detailed justification - A case made out on statements and peripheral records must find corroboration in each other; the validity of statements lies in sustaining through cross-examination and, hence, the significance of section 9D of Central Excise Act, 1944. The request of the appellants for determination of its validity as evidence was not only ignored but the adjudicating authority proceeded to dispose off the notice without placing on record the reason for such denial. That is certainly not in consonance with the principles of natural justice or even in conformity with adherence to testing of evidence. A determination, judicial or quasi-judicial, is application of known law to established facts. The facts are not established here and the adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lleged to have been illicitly cleared to M/s Shiv Shakti Rolling Mills Pvt Ltd. He pointed out that, in response of 27th April 2011 itself styled as interim , cross-examination had been sought for but denied in communication of 3rd November 2011 fixing the hearing for 23rd November 2011; relenting thereafter, the adjudicating authority did permit cross-examination of 14 persons on 27th February 2012. It was contended that with disowning of pen drive , alleged to have been seized from two of the noticees herein, their request for forensic analysis in their letter of 29th February 2012 was natural corollary that, however, was denied. It was further informed that letter of 1st March 2012, scheduling hearing on 6th March 2012, was responded to on the day before which was followed by letter of 6th March 2012 appointing 15th March 2012 for hearing and that all that had been achieved by their insistence on forensic testing was letter of 13th March 2012 for re-scheduling of hearing to 21st March 2012 and that, despite further reply of 28th March 2012 seeking fresh date for hearing, the impugned order came to be passed ex parte in the meanwhile. It was further contended that voluminous re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lexibility for discarding even the most fundamental canon of evidence. Reliance upon a statement, to the exclusion of any material facts, in a show cause notice is, in effect, examination-in-chief and credibility of the contents therein for resort to conclusion of detriment rests upon quicksand except by assertion through challenge of cross-examination ; we are unable to appreciate the notion of lack of bias in such denial that, especially in the light of section 9D of Central Excise Act, 1944, should not have occurred save with detailed justification. A statement that serves to connect the dots, as facts may be called, for the purpose of determining inculpatory responsibility and willful acts of omission and commission. A case made out on statements and peripheral records must find corroboration in each other; the validity of statements lies in sustaining through cross-examination and, hence, the significance of section 9D of Central Excise Act, 1944. 8. Remarkably, the impugned order has disposed off this aspect thus 5.1 The Assessees and the co-noticees failed to reply to SCNs. Personal hearing in the cases was fixed on 13.04.2011 / 21.04.2011 / 28.04.2011 / 05.05.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s then refixed on 24.01.2012 and this time also they sought extention vide their letters dated 23.01.2012. The cross examination was again fixed on 27.02.2012. The consultant of the assessees appeared and completed the cross examination of these remaining 6 witnesses on 27.02.2012. After the cross examination, personal hearing in the cases was fixed on 06.03.2012 but assesses vide their letters both dated 29.2.12 stated that cross examination has been completed on 27.02.2012 and looking to the voluminous record to enable them to file replies to SCNs they requested for extention for hearing. They also stated that Shri Sumit Sharma, during his cross examination, has since denied the fact of recovery of any pendrive from his possession, therefore, forensic testing of the pendrive may be done. Persona! hearing was then refixed on 15.03,2012. Assessees again sought for extention vide their letters dated 12.3.2012 wherein they stated that they have requested for forensic analysis of the pendrive. They also stated that their request for cross examinanation of all the witnesses has been denied. In the Judgment and Order dated 12-5-2010 in GCR No. 3/2006 of Punjab Haryana High Court as re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to asseessees and personal hearing was refixed on 21.3.2012, which they failed to attend. which, in our opinion, is not constructive compliance with requisite for acceptability of statements. Any statement that does not pass muster within the intent of 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 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 justic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... landestine manufacture and clearances, certain fundamental criteria have to be established by Revenue which mainly are the following : (i) There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions; (ii) Evidence in support thereof should be of : (a) raw materials, in excess of that contained as per the statutory records; (b) instances of actual removal of unaccounted finished goods (not inferential or assumed) from the factory without payment of duty; (c) discovery of such finished goods outside the factory; (d) instances of sale of such goods to identified parties; (e) receipt of sale proceeds, whether by cheque or by cash, of such goods by the manufacturers or persons authorized by him; (f) use of electricity far in excess of what is necessary for manufacture of goods otherwise manufactured and validly cleared on payment of duty; (g) statements of buyers with some details of illicit manufacture and clearance; (h) proof of actual transportation of goods, cleared without payment of duty; (i) links between the documents recovered during the search a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisions cited before us now, considered them, and come to the above conclusion. In yet another decision of a co-ordinate Bench of the Tribunal [Pan Parag India v. CCE, 2013 (291) E.L.T. 81], it has been held that the theory of preponderance of probability would be applicable only when there are strong evidences heading only to one and only one conclusion of clandestine activities. The said theory, cannot be adopted in cases of weak evidences of a doubtful nature. Where to manufacture huge quantities of final products the assessee require all the raw materials, there should be some evidence of huge quantities of raw materials being purchased. The demand was set aside in that case by this Tribunal. in re Arya Fibres Pvt Ltd which does not appear to have been adhered to in the impugned order. 11. It did emerge through the limited cross-examination that a pen drive was the fount of computation of the extent of clearances and the person from whom it was purportedly seized had denied any connection thereto. The request of the appellants for determination of its validity as evidence was not only ignored but the adjudicating authority proceeded to dispose off the notice without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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