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TMI Blog2024 (10) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... essity for cross-examining the customer of the respective petitioner is not required as in a quasi judicial proceedings before the respondents, the respondents are merely governed only by the principles of preponderance of probability and are not governed by strict rules of evidence. Unless, the statements of the persons who have given statements against the petitioners are solely relied for confirming the demand, question of cross-examination of any of the persons who have given statements against the petitioners does not arises only where demand is solely based on such statement, the Department has to allow cross-examination or in the alternative eschew such statements. The impugned orders prima facie indicate that the respondents have merely relied on the statement of buyers of the respective petitioners. They have merely corroborated the records maintained by the respective petitioners that the buyers have purchased PP bags from the respective petitioners. Therefore, there is no merits in the challenge to the impugned orders on the ground that no cross-examination was allowed in terms of the decision of the Hon'ble Supreme Court in Andaman Timber Industries case. Petition d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Excise Rules, 2002, kept ready for clearance without payment of duty which were seized from M/s. Annai Poly Packs and subsequently released provisionally. (iv) I confirm confiscation of 5968.70 kgs of Poly Bags and HM Bags. valued at Rs. 6,24,346/-, under rule 25 of the Central Excise Rules, 2002, kept ready for clearance without payment of duty which were seized from M/s. Banu Poly Packs intent to clear along with bags manufactured at App without bills. (v) I impose a redemption fine of Rs. 1,28,083/- (Rupees One lakh twenty eight thousand and eighty three only) in lieu of confiscation under Rule 30 of the Central Excise Rules, 2002 on Shri.M.Ahamed Ibrahim, proprietor of M/s.Annai Poly packs as the seized goods have already been provisionally released. (vi) I impose a redemption fine of Rs. 62,435/- (Rupees Sixty two thousand four hundred and thirty five only) in lieu of confiscation under Rule 30 of he Central Excise Rule, 2002 on Smt.A.Fathima Banu. proprietor of M/s.Banu Poly packs as the seized goods have already been handed over under Form of undertaking. (vii) I confirm an amount of Rs. 2,61,31,886/- (Rupees Two Crore Sixty One Lakh Thirty One Thousand Eight ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest at applicable rate on the duty evaded should not be demanded under section 11AA/11AB of Central Excise Act under sub section(15) to Sec. 11A of Central Excise Act, 1944; (xiv) I impose a penalty of Rs. 5,00,000/- (Rupees Five lakh only) on Smt.Fatima Banu under Rule 26 of Central Excise Rules 2002, for having tendered her name and other activities for starting a firm in the name of M/s Banu Poly Packs by Shri. M.Ahamed Ibrahim, the proprietor of M/s. Annai Poly Packs and abet him in his illicit activities such as manufacture of PP/HM Sheets and Bags in the name of her proprietary firm M/s Banu Poly Packs and transferring them to M/s. Annai Poly Packs and vice versa without valid documents and cleared them without payment of excise duty payable thereon and without valid invoice prescribed under excise law and has thus helped him. 4. The specific case of the respective petitioners is that despite repeated requests for cross-examination of the following 7 persons, the petitioners were not allowed to cross-examine these persons:- (1) Mr.P.V.Prabu, Director of M/s.Seven Seas Polymers (P) Ltd., (2) Mr.Shasi Kumar Fomra, Director of M/s.Sigma Mat (P) Ltd., (3) Mr.J.T.Shreelal, Propri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Supreme Court under Section 141 of the Constitution of India. In this connection, a reference was made to the decision of the Hon'ble Supreme Court in Union of India Vs. Kamalakshi Finance Corporation , 1991(55) ELT 433 SC. 8. The learned Senior Standing Counsels for the respective respondents, on the other hand, would submit that the statements were recorded from Mr.M.Ahmed Ibrahim, the proprietor of Annai Poly Packs and his wife Mrs.Fathima Banu, the proprietrix of Banu Poly Packs and one Mr.A.Gnanasekar, the common Manager of both the petitioners. It is submitted that in the respective impugned orders, there is no direct reliance on the statements of any of the persons whom the respective petitioners wanted to cross-examine, except in paragraph 30.6.3. 9. It is submitted that the statement of one Mr.P.V.Prabhu, one of the Directors of the Madurai Branch of M/s.Seven Seas Polymers Pvt. Ltd., merely corroborative in nature is primarily based on the inculpatory statement of Mr.M.Ahmed Ibrahim, the proprietor of Annai Poly Packs, the petitioner in W.P.(MD)No.5447 of 2018, the statement of proprietrix Mrs.Fathima Banu, W/o.M.Ahmed Ibrahim, the petitioner in W.P.(MD)No.5501 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after by her husband Shri M.Ahamed Ibrahim. 14. Similarly, Mr.M.Ahmed Ibrahim, the proprietor of M/s.Annai Poly Packs, the petitioner in W.P.(MD) No.5447 of 2018, in his statement which has been recorded in paragraph 17.2 of the impugned order, has stated as follows:- 17.2. A statement was recorded from Shri M.Ahamed Ibrahim, Proprietor of M/s.Annai Poly Packs, under Section 14 of Central Excise Act 1944 on 04.07.2015 i.e. on the day of the above said search operation. Shri M.Ahamed Ibrahim, in the above statement, has inter-alia stated that he has been running his firm M/s Annai Poly Packs for the last 7 years; his aforesaid firm is engaged in the manufacture and clearance of PP Bags manufactured out of PP granules; his firm has been using three PP machines (Extruders) in the manufacture of PP bags and out of the three machines, two machines are 35 mm (12 inches) machines and one is 40 mm (15 inches) machine; his firm has also been using one cutting machine, 20 table top sealing machines and one side sealing machine; he has been selling the PP bags manufactured in his firm to customers located at Trichy, Tirunelveli, Madurai, Virudhunagar, Nagercoil, Thiruvananthapuram, Kollam and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; the Poly Rolls manufactured at BPP were brought to APP where the same were sealed in required length and cut and despatched to customers from APP; the PP bags contained in the despatch details written in the aforesaid Despatch Registers included PP bags manufactured at both APP and BPP; APP destroyed similar despatch registers related to the period prior to 2014-15 since the said registers contained details of PP bags despatched without bills; the raw materials required for the manufacture of PP bags by APP were procured by his owner Shri M. Ahamed Ibrahim; the aforesaid raw materials were mostly procured without bills by his owner; he agreed that the bill books bearing sl. Nos. 5-1/5 to 5-5/5 contain bills raised for the despatch of PP bags manufactured at APP; the details contained in the aforesaid bills were also written in the above mentioned Despatch Registers; since the PP bags manufactured by APP were mostly sold without bills, APP did not preserve the documents containing production details. 16. Thus, the point that arises for consideration in this Writ Petition is whether the decision of the Hon'ble Supreme Court in Andaman Timber Industries Vs. Commissioner of Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts which appears to have been given by the appellant before the 2nd respondent during investigation. 37. In view of the above conclusion, we are inclined to dismiss the writ appeal. Appellant is given liberty to file an appeal before the Appellate Commissioner within two months from the date of this order. Accordingly, this writ appeal is dismissed. No costs. 18. Similarly, this Court in Jet Unipex Vs. Commissioner of Customs, Chennai , 2020 (373) E.L.T.649 (Mad.), summarized the position as follows:- 59. At the same time, if such statements are merely intended for corroboration of independent evidence, the cross-examination need not be allowed. 60. Therefore, it is for the 1st respondent to decide whether the statements recorded are to be solely relied for confirming the proposed demand or are relied for mere corroboration of independent evidence gathered during investigation. 61. In the case of former, mandatorily such statements would require cross-examination and without cross-examination, confirmation of demand would be contrary to the law settled by the Hon'ble Supreme Court in Andaman Timber Industries Vs CCE referred to supra. 62. If reliance is to be placed on any sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty and are not governed by strict rules of evidence. Unless, the statements of the persons who have given statements against the petitioners are solely relied for confirming the demand, question of cross-examination of any of the persons who have given statements against the petitioners does not arises only where demand is solely based on such statement, the Department has to allow cross-examination or in the alternative eschew such statements. 21. The impugned orders prima facie indicate that the respondents have merely relied on the statement of buyers of the respective petitioners. They have merely corroborated the records maintained by the respective petitioners that the buyers have purchased PP bags from the respective petitioners. Therefore, there is no merits in the challenge to the impugned orders on the ground that no cross-examination was allowed in terms of the decision of the Hon'ble Supreme Court in Andaman Timber Industries case (referred to supra). 22. However, I do not wish to deny the petitioners an opportunity to file a Statutory Appeal against the respective impugned orders before the Commissioner of Central Excise (Appeals) under Section 35 of the Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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