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TMI Blog2024 (10) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... eports also indicated that the goods would be Crude Mint Oils, the genuineness of test report conducted after receipt of the goods from the appellant, cannot be doubted and so the request for cross examination of departmental officers and other persons should not be granted. The Commissioner also observed that the case against the appellant is not only on the basis of statements of employees of the appellant, but also on circumstantial test reports and, therefore, denying the right of cross examination would not be violative of principle of natural justice. These observations made by the Commissioner in the impugned order are clearly contrary to the principles enunciated by the Allahabad High Court in Parmarth Iron [ 2010 (11) TMI 109 - ALLAHABAD HIGH COURT] and the Punjab and Haryana High Court in Jindal Drugs [ 2016 (6) TMI 956 - PUNJAB HARYANA HIGH COURT] . In the first instance, under section 9D of the Central Excise Act it is clear that a statement made during investigation/enquiry before a central excise officer cannot be relied upon unless it is first admitted and for this the person who made the statement has to be summoned and examined as a witness in adjudication proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The main raw materials used in the manufacture of these products are curde Mentha Oil, Crude Mentha Oil Shivalik, Crude Tymol Oil, Crude Spearmint Oil, Crude Piperita Oil, Crude Lemon Grass Oil and Crude Peppermint Oil. They shall collectively be referred to as Crude Mentha Oils. The appellant procured the raw materials from the manufacturers/ producers in the State of Uttar Pradesh. The manufacturing unit of the appellant is situated in industrial area Kathua and the appellant availed the benefit of the Exemption Notification No. 56/2002 dated 14.11.2002 [the Exemption Notification]. 5. Under this Exemption Notification, Central Excise duty paid by the appellant on the said products in a particular month is subjected to refund in the subsequent month by the Jurisdictional Assistant Commissioner after verification. The appellant claims that during the period from April 2005 to June 2006, it made payment of central excise duty amounting to Rs. 10,14,57,998/- from its current account and subsequently claimed refund of the said amount of duty in terms of the Exemption Notification. 6. A show cause notice was issued to the appellant alleging that the appellant did not have the capacit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 open type compressor glycol tanks. 1 3. Flack Machine Compressor 2 4. Centrifugal 8 5. Cutter Machine Manual 1 6. Fractional and Distillation Column 1 7. Vacuum Pump with Motor 1 8. Sealing Tower 1 9. Melting tank with pump heater and diesel burner 1 10. Centrifugal base and pipe line for D.O. storage tank and pump 1 11. Pipe line for sealing system for freezing and column 1 12. Aluminum Containers 466 13. Tin Containers 300 11. The officers also found electric power of 50HP installed at the factory premises. 11 workers employed by the appellant were also present for the factory premises. During the course of the search of the officers resumed RG-1 Registers. Form-4 Register, attendance Register, Cash Books, VAT-65 Consumed File, Fuel and Electricity File, PLA Register, RG-23C, Part-II, Sale Bills/Purchase Bills Files, Central Excise Files, Files Containing Misc. papers, Sales tax Files, machinery bill File, Form-F register, Production Slips, Issue Slips, Analysis Reports, Capacity Assessment File and DIC Verification Certificate. 12. Shir Anurag Mishra, learned counsel for the appellant made the following submissions: (i) The appellant had correctly availed CENVAT credit of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied the facts that had been declared by the appellant in the statutory records submitted from time to time. As there was no reason to doubt the genuineness of test reports/analysis reports, the request of cross-examination is devoid of merits. (ii) The appellant is not justified in asserting that the show cause notice has been adjudicated only on the basis of assumptions and presumptions. The Commissioner had examined all the evidence on record to arrive at the findings; (iii) The records indicate that no manufacturing activity in relation to the goods supplied to the appellant was carried out in the factory premises of the appellant; (iv) The benefit of the Notification dated 14.11.2002 has been wrongly availed; (v) The availment of CENVAT credit has been correctly denied to the appellant; and (vi) The extended period of limitation was correctly invoked and the penalty was also correctly imposed. 14. The submissions advanced by the learned counsel for the appellant and the learned special counsel appearing for the department have been considered. 15. The appellant is situated in Jammu and operated under the Notification dated 14.11.2002. Under this Notification, the duty paid by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at place A . This issue was answered by the Bombay High Court in the following manner: 5. Mr. Ferreira, learned Assistant Solicitor General for the appellant, submitted that the scheme of law is that if, excise duty is collected, a person at subsequent place is entitled to claim Modvat credit. According to Mr. Ferreira, learned Assistant Solicitor General, this can be so if, duty is validly collected at an earlier stage. In this case duty was not payable at all at the place outside Goa, since no duty can be levied on job work but only on manufacture and, therefore, the respondents are not entitled to claim any Modvat credit. Though this submission appears to be reasonable and in accordance with law, we find it not possible to entertain this submission in the facts of the present case since at no point of time the Revenue questioned the applicability of the excise duty at the place outside Goa. Those assessments have been allowed to become final and the goods have been removed from the jurisdiction of the Excise Officer at that place and brought to Goa. Now, in Goa it will not be permissible to allow the Revenue to raise the contention that the assessee in Goa cannot claim Modvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, have no hesitation in holding, that there is no requirement in the Act or Rules, nor do the principles of natural justice and fair play require that the witnesses whose statements were recorded and relied upon to issue the show cause notice, are liable to be examined at that stage. If the Revenue choose not to examine any witnesses in adjudication, their statements cannot be considered as evidence. However, if the Revenue choose to rely on the statements, then in that event, the persons whose statements are relied upon have to be made available for cross-examination for the evidence or statement to be considered. 25. The Punjab and Haryana High Court in Jindal Drugs also observed as follows: 9. A plain reading of sub-section (1) of Section 9D of the Act makes it clear that clauses (a) and (b) of the said sub-section set out the circumstances in which a statement, made and signed by a person before the Central Excise Officer of a gazetted rank, during the course of inquiry or proceeding under the Act, shall be relevant, for the purpose of proving the truth of the facts contained therein. 10. Section 9D of the Act came in from detailed consideration and examination, by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pulation in the Act, it is not open to any adjudicating authority to straightaway rely on the statement recorded during investigation/ inquiry before the Gazetted Central Excise Officer, unless and until he can legitimately invoke clause (a) of Section 9D(1). In all other cases, if he wants to rely on the said statement as relevant, for proving the truth of the contents thereof, he has to first admit the statement in evidence in accordance with clause (b) of Section 9D(1). For this, he has to summon the person who had made the statement, examine him as witness before him in the adjudication proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice. xxxxxxxxxxx 22. Clearly, if this procedure, which is statutorily prescribed by plenary Parliamentary legislation, is not followed, it has to be regarded, that the Revenue has given up the said witnesses, so that the reliance by the CCE, on the said statements, has to be regarded as misguided, and the said statements have to be eschewed from consideration, as they would not be relevant for proving the truth of the contents thereof. (emphasis supp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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