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TMI Blog2024 (12) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... DH-APP-64- 65/23-24 dated 27.07.2023 16,84,642/- 16,84,642/- 2. E/60633/2023 CHD-EXCUS-001- LDH-APP-64- 65/23-24 dated 27.07.2023 -- 5,00,000/- 2. Briefly the facts of the present case are that the appellant M/s Goyal Malleables Pvt. Ltd. are engaged in the manufacture of M.S. Ingots of Iron and Steel and were registered with Central Excise Department. The appellants are availing the input CENVAT credit on scrap (raw material) consumed in the manufacture of such steel ingots. On the basis of intelligence from DGCEI which indicated that Kryption Overseas, Ludhiana and Prakash Enterprises, Raipur are engaged in supply of dutiable iron and steel scrap, was fraudulently passing on CENVAT credit of duty to various furnace units of Punjab on the strength of their forged excise duty paid invoices. Information also indicated that both these firms have shown fake purchase of duty paid excisable goods i.e. MS Scrap source manufacturing units/ dealers based in Chattisgarh and Odisha, which in-actual, these firms had never purchased. On the basis of investigation, a Show Cause Notice was issued to the appellants. The appellants filed reply to the Show Cause Notice and cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o prove that any other alternative raw material was received and used in the final product if the inputs in question have not been received physically by the Noticee as alleged by the department. d) The monthly ER-I Returns have been filed and approved by the department) 5. Learned Counsel further submits that the appellant has cited number of decisions before the Commissioner (Appeals) wherein it has been held that without the cross-examination of the material witnesses, the statement of the said witnesses cannot be relied upon to confirm the demand. He further submits that this Tribunal in the case of M/s R.K Trading Company & Others vide Final Order No.60195-60197/2023 dated 19.07.2023 wherein in identical circumstances, the Tribunal has remanded the matter back to the original authority for affording the opportunity of cross-examination of the key witnesses on whose statement the Revenue has relied upon. He further submits that the jurisdictional High Court of Punjab & Haryana in the case of Jindal Drugs Pvt. Ltd. Vs UOI- 2016 (340) ELT 67 (P&H), has categorically held in Para 19 that it is mandatory to allow the cross-examination of the material witnesses whose statement is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not stress for crossexamination. We find that this argument is not acceptable as it was incumbent upon the Adjudicating Authority to follow the provisions of Section 9D of Central Excise Act, 1944. We find that the provisions of Section 9D of Central Excise Act, 1944 are as follows: "Section 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word "shall" in Section 9D(1), makes it clear that, the provisions contemplated in the sub-section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. 18.The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the Gazetted Central Excise Officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudicating authority, as, in such an atmosphere, there would be no occasion for any trepidation on the part of the witness concerned. 19. Clearly, therefore, the stage of relevance, in adjudication proceedings, of the statement, recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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