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TMI Blog2024 (10) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ove allegation relied upon the statements of Shri Sushil Kumar Agarwal proprietor of M/s. Shivani Metals and M/s. Somain Enterprises, Shri Pankaj Agarwal power of attorney Holder of M/s. Shivani Metals and Somian Enterprises, Shri Bupendra G. Patel factory manager of M/s Shivani Metal and various buyers and transporter. The entire proceedings have been initiated on the basis of statements of above persons. The appellants have pleaded that the only opportunity of cross-examination of 3 person i.e. Shri Dwarkanath Khajuria, Shri Lal Bahdur Yadav and Shri Krishna Kumar (Transporters) was provided but the said witness did not appear. It is the case of the appellant that demand of duty has been confirmed by the Ld. adjudicating authority on the basis of the statements of transporters and other persons whose cross-examination have not been allowed. No other corroborative evidence is available on record but the statements which too have not been allowed to be examined. The reasons assigned by the authorities below to reject cross-examination is clearly unsustainable in legal parlance for the obvious reason that no adverse inference can be drawn against assessee whose statements are to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire. Appellant was also getting such products manufactured on Job Work basis from other manufacturer. An intelligence was gathered that Appellant were involved in the clandestine clearances of their finished products viz. Copper wire/ bare Copper wire without payment of Central Excise Duty. Therefore, simultaneous searches were conducted on 10.11.2009 at the premises of appellants, transporters. Relevant documents/records were placed under seizure. During the search and on scrutiny of the records, statements of representatives of M/s Shivani and its associates are recorded. From the investigation, it appears that Appellant had cleared their finished goods illicitly without payment of duty of Rs. 1,46,85,771/- which were transported by several transporter. Further during the course of search at factory premises of Appellant, shortage of finished goods/ semi finished goods of Rs. 2305.430 Kgs. were found. Shri Bhupendra Govind Patel, Factory Manager admitted the clearances of said goods. The duty liability on the said shortage goods of Rs. 60,789/- workout by the revenue. 1.2 After the detail investigation a show cause notice dated 24.12.2012 was issued to Appellants proposing the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore statements of the above person cannot be relied upon by the department for confirming the demand. 2.2 By relying the judgments of Motabhai Iron Steel Industries Vs. CCE, Ahmedabad II -2014(302)ELT 69 (Tri. Ahmd.) which was affirmed by Hon ble Gujarat High Court Commissioner Vs. Motabhi Iron Steel Industries -2015(316)ELT 374 (Guj), he also argued that statements of the transporter not corroborated with any other evidences thus demand cannot be confirmed on the basis of the third party statements. 2.3 Without prejudice, he also submits that demand of central excise duty has been arrived by the department against M/s Shivani Metals by relying upon the documents pertaining to M/s. Somain Enterprises as the Ld. Commissioner, Vapi does not have the jurisdiction to make the demand against M/s. Somain Enterprises, therefore demand has been frivolously made against the Appellant which is liable to be set aside. 2.4 As regard the demand of central excise duty of Rs. 60,789/- he submits that revenue worked out the said duty liability on the goods 2305.430 Kg. found short during the search on the ground that Shri Bhupendra G Patel accepted the clearances of the said goods. However, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve not been allowed to be examined. 4.1 On perusal of finding of the Learned Commissioner, we find that the request for cross-examination of the persons whose statements have been relied upon has been turned down on the ground that after recording the statements nobody retracted the statements thereafter, there is therefore a reason to believe that the statements have been given voluntarily, without any pressure. In this regard, we find that the reasons assigned by the authorities below to reject cross-examination is clearly unsustainable in legal parlance for the obvious reason that no adverse inference can be drawn against assessee whose statements are to be relied by the Revenue without ascertaining the veracity in the absence of cross-examination. Therefore the said statements cannot be relied upon as admissible evidence in terms of the provisions of Section 9D of the Act. The provisions of Section 9D which are reproduced as under : - 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 pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... witness testified on his examination-in-chief. Direction for re-examination. - The re-examination shall be directed to the explanation of matters referred to in cross-examination; and if new matter is, by permission of the Court, introduced in re-examination, the adverse party may further cross-examine upon that matter. 9. It would, thus be seen that Section 138 (supra) envisages that a witness would first be examined-in-chief and then subjected to cross-examination and for seeking any clarification, the witness may be re-examined by prosecution. There is, in our opinion, no meaning in tendering a witness for cross-examination only. Tendering of a witness for cross-examination, as a matter of fact, amounts to giving up of the witness by prosecution as it does not choose to examine him in chief. However, the practice of tendering witness for cross-examination in session trials had been frequently resorted to since the enactment of the Code of Criminal Procedure, 1898. In view of above it is clear that in adjudication, the adjudicating authority is required to first examine the witness in chief and also to form an opinion that having regard to the facts and circumstances of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal has held that the Adjudicating Authority, in accordance with the provisions of Section 9D(2) of the Central Excise Act, 1944 (pari materia to Section 138B of the Customs Act, 1962) must examine the witnesses whose statements have been relied upon by the Department. A finding of clandestine removal of goods on the basis of uncorroborated statements was not sustainable in the absence of positive evidence of purchase of unaccounted raw materials, use of excess electricity, admission of raw material supplier with corroborative evidences etc. In this case, no documents indicating suppression of purchase of raw material or of production of finished goods was recovered, no data related to excess electricity was found by the department, no seizure or recovery of any duplicate or fake purchase invoices or delivery challans was made and no physical movement of goods without proper invoices or without payment of duty was noticed for the period of dispute. The adjudicating authority found clandestine removal of goods merely on the basis of uncorroborated statements and, therefore, the finding was not sustainable. 4.4 We also find that the allegation against the appellant in present ..... X X X X Extracts X X X X X X X X Extracts X X X X
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