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TMI Blog2023 (10) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... rive coupled with some statements recorded during investigation as well as u/s. 14 ibid. Admittedly the cross-examination was not granted to the appellants as according to the adjudicating authority that was not relevant despite the fact that the charges in the show cause notice are based on the evidence emanating from the seized documents and statements recorded during the course of investigation. Not allowing cross-examination is violative of the principle of natural justice. In catena of decisions it has been held that such statements cannot be relied upon. Denial of cross-examination by the adjudicating authority is a clear violation of the mandate of Section 9D ibid. - In the matter of Hi- Tech Abrasives Ltd. [ 2018 (11) TMI 1514 - CHHATTISGARH HIGH COURT ] Hon ble Chhattisgarh High Court has held that statements recorded u/s. 14 of the Act cannot be relied upon as evidence without following the rigour of Section 9D of the Act since the provisions of Section 9D are mandatory in nature. Mere recovery of private records, that too from the third party, is not sufficient to prove clandestine removal and a concrete and clinching evidence is required to prove such allegations and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the appellant Shri P.K. Acharya, Superintendent (AR) for the respondent ORDER These appeals have been filed assailing the impugned Orders-in-Original dated 30.3.2010 25.2.2010 respectively passed by the Commissioner of Central Excise Service Tax, Aurangabad confirming the duty demand alongwith interest equal penalty on two companies and also confirming the penalty on the individuals. 2. The issue involved herein is whether department has made out a case of clandestine removal even by preponderance of probability on the basis of evidence collected and statements recorded? 3. The case made by the department against M/s Parvati Steel Rolling Mills Pvt. Ltd. its Manager Shri Ravi S. Gupta is stated in brief as follows. Based on intelligence of clandestine removal of steel bars, the officers of DGCEI conducted searches at various places including the premises of manufacturers of Steel Bars, its Traders, transporters of M.S. Bars, buyers of steel bars etc. and during the search on 24.2.2006 at the premises of a trader/broker viz. M/s. Dhanshree Laxmi Steels, Jalna (hereinafter referred to as DLS ) five (5) hand written diaries were recovered which contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice, as to why penalty should not be imposed upon them under Rule 26 of the Central Excise Rules, 2002 for their active involvement in the commissioning the offence in the evasion of Central Excise duty by Parvati. 4. So far as Appeals pertaining to M/s. Parvati Steel Re- Rolling Mills Pvt. Ltd. are concerned, a search was conducted by the officers of DGCEI at the premises of a broker namely Anil Dattabhau Lingade and during search a pen drive was recovered from the possession of his accountant Mr. Pradeep Bora and based on the documents recovered allegedly from the said pen drive and statements recorded during investigation, a show cause cum demand notice dated 6.3.2009 was issued to M/s. Parvati Steel Re-Rolling Mills Pvt. Ltd. and its Director Mr. Pawankumar Fakirchand Gupta, for clandestine manufacturing clearing of 1170.970 MTs of finished goods viz. M.S. TMT bars during the period 1.2.2008 to 9.3.2008, as to why:- i) Central Excise duty amounting to Rs.66,21,435/- (Rupees Sixty-six lakhs twenty-one thousand four hundred and thirty-five only) (Basic Rs.64,28,578/-, Education Cess Rs.1,28,572/- and Secondary and Higher Edu. Cess Rs.64,286/-), leviable and not paid b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that Mr. Suresh Agarwal in his cross-examination has specifically mentioned that he has not named any manufacturer other than Shree Om Rolling Mills and that his statements during investigation were recorded by the department in English language which he was unable to understand as he don t know English language. He also mentioned that the officer who recorded the statement told him that these statements contained exactly the same details which were recorded in his statements on 24.2.2006 and that in good faith he signed those documents. Learned Counsel further submits that so far as other witnesses are concerned, they requested for their cross-examination but the Adjudicating Authority rejected the same and since the cross-examination of other witnesses have not been allowed, their statements cannot be relied upon. He also submits that there is no compliance of Section 9D of Central Excise Act, 1944. APPEAL Nos. E/1169/2010 E/1171/2010 7. While making submissions in the matter of M/s. Parvati Steel Re-Rolling Mills Pvt. Ltd., learned counsel submits that the entire case of the department is based on the pen drive allegedly recovered from Mr. Pradeep Bora -accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue supported the findings recorded in the impugned orders and prayed for dismissal of the appeals. According to learned Authorised Representative the appellants had not been able to justify the requirement of cross-examination, therefore the same has been rightly rejected by the Adjudicating Authority. He further submits that a clear case of clandestine removal has been made out against the appellants and therefore the duty and penalties have been rightly imposed. He further submits that the case is based upon the private documents recovered during search operations and corroborated by the statements recorded. As per learned Authorised Representative there is plethora of decision in favour of the department stating that statements given before Central Excise authorities are valid even if retracted later on and that denial of cross-examination does not affect the principle of natural justice. For some persons whose cross-examinations were permitted and were retracted, learned Authorised Representative submits that the depositions made in the cross-examination are nothing but an afterthought which cannot affect the evidentiary value of original statements. He also filed compilation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to convince us from where they get to know the names of those alleged buyers. The appellants have asked for the cross-examination of those alleged six actual buyers but were not permitted. 10. Case against Parvati Steel Re-Rolling Mills Pvt. Ltd. has been built up on the basis of the alleged pen drive recovered from the possession of a person Mr. Pradeep Bora, accountant of Mr. Anil Dattabhau Lingade (a broker) during the search conducted at his office on 11.3.2008. The data contained in the said pen drive was retrieved and printout were taken by the department under panchnama dated 11.3.2008. The demand was confirmed by the Adjudicating Authority on the basis of the documents allegedly retrieved from the said pen drive coupled with some statements recorded during investigation as well as u/s. 14 ibid. Admittedly the cross-examination was not granted to the appellants as according to the adjudicating authority that was not relevant despite the fact that the charges in the show cause notice are based on the evidence emanating from the seized documents and statements recorded during the course of investigation. 11. In our view, not allowing cross-examination is violativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the law laid down by the Hon ble Supreme Court in cases of Arya Abhushan Bhandar v. U.O.I; 2002 (143) E.L.T. 25 (S.C.) and Swadeshi Polytex Ltd. v. Collector, Central Excise; 2000 (122) E.L.T. 641 (S.C.) and of the Hon ble High Court of Judicature at Bombay in case of Gyan Chand Sant Lal Jain v. U.O.I; 2001 (136) E.L.T. 9 (Bom.), has held that at the stage of adjudication, it is the right of an assessee to seek cross-examination of the witnesses whose statements are sought to be relied upon by the Revenue and that cross-examination is necessary so that it could be established whether the statements recorded had been voluntarily given and/or are relevant for the issue or based on personal knowledge or hearsay and the like. In J.P. Iscon Pvt. Ltd. vs. CCE, Ahmedabad-I; 2022 (63) G.S.T.L. 64 (Tri.- Ahmd.) it has been held by a co-ordinate Bench of the Tribunal that statements recorded during investigation, whose makers are not examination-in-chief before the adjudicating authority, would have to be eschewed from evidence, and it will not be permissible for Ld. Adjudicating Authority to rely on the said evidences. Therefore, we hold that none of the said statements were admissible ..... X X X X Extracts X X X X X X X X Extracts X X X X
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