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TMI Blog2025 (3) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... , for the purposes of clubbing of clearances it is an imperative prerequisite that one unit is identified or determined as the principal entity to which the clearances from the other units or factories then get clubbed and the proposal for demand is then required to be raised on the said principal entity. Evidently, the attempt of the Department here is to deny the benefit of exemption notification individually to the three units, as the Department is of the view that the three brothers have indulged in subterfuge of maintaining separate units while exercising financial and managerial control over all the three. This Tribunal in Amit Talwar v CCE, Delhi-I [2018 (5) TMI 667 - CESTAT NEW DELHI] has held that it is well-settled that demand cannot be made jointly and severally. The lack of clarity in determining the 'manufacturer' from whom the demand of duty in the event of clubbing of clearances ought to be made and non-identification of any such principal entity and instead embarking on proposing a demand on a department mooted 'group of persons comprising of the three brothers' / 'group of firms' comprising of the three firms, neither of which proposal has any legal basis in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries only for the period from April 2007 to September 2009. Admittedly for the period from October 2009 to March 2010 there was no evidence available pertaining to unaccounted clearances and the show cause notice had proceeded to quantify the same adopting the average value of the preceding year's clearances, that is clearance from October 2007 to March 2008 and October 2008 to March 2009 to arrive at an average value of clearances per day and then to presumptively quantify the unaccounted clearance for the period October 2009 to March 2010, as is evident from the remarks in the column in the worksheet at Annexure C(i) and para 15.3 of the SCN at page 84-85. Similarly, for the period 2010-11 and 2011-12 the show cause notice has not even an iota of evidence to rely on for determining the quantification of the alleged clandestine removals. In the instant case the evidence adduced is woefully inadequate, much less 'clear and convincing evidence'. Apart from the reliance placed on the statements, which is determined as inadmissible, the information found in the long and small note books and other records at best would prima facie create a strong doubt about the unaccounted manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Notification No.8/2003-CE dated 01.03.2003 as amended to determine the aggregate value of clearances for demanding duty from the said three firms, is wholly untenable and cannot sustain.
Appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ials, production of fireworks, sale of fireworks of all varieties in all the three firms without restricting to the actual place/factory of manufacture, collection of sale proceeds in cash and remittance of illicit sale proceeds in their personal accounts as well as in that of their close relatives. d) They have also admitted that M/s Meena Fireworks Industries has 30 working sheds manufacturing all varieties of fireworks including fancy items. M/s Meena Fire Works has 6 working sheds manufacturing chorsa/walas/lar variety fireworks only and Mis Meena Sparklers has only 3 working sheds manufacturing exclusively sparklers, they effected sale of fireworks of all varieties under the invoices of all the three factories irrespective of place of manufacture. e) Further they have also admitted that they have distributed the value of clearances of fireworks, effected from their three factories, among themselves maintaining an equilibrium with one another. This could be seen from the turnover submitted to the Commercial tax authorities and for the year 2009-10 the sale turnover of M/s Sparklers was even more than that of other two factories. f) They have procured raw materials ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent consignments to different customers following the same modus operandi. Such torn invoices are available in the file bearing Sl.No.26-1/2 & 262/2(marked as Sl.no 14 of Annexure-B to the SCN) recovered from the office premises which vouches raising of same number to different invoices to another consignments. m) The details contained in the Registers bearing Sl.No. 25-1/4, 25-2/4, 25-3/4 and 25-4/4 (marked as Sl. no 1 of Annexure-B to the SCN) recovered from the office premises of M/s Meena Fireworks Industries revealed the clandestine removal of fireworks during the period 1-4-2007 to 27-09-2009. These facts were admitted by Shri S. Meenrajan and Shri S Kannan. n) They have also sent two consignments in a single invoice, the details of which are available in the Order forms & Estimate-Memo in the file bearing Sl. No. 30-2/2 (marked as Sl. no 11 of Annexure-B to the SCN) recovered from the office premises. These documents showed not only double consignments but also their realization. o) The small note books bearing: Sl. No 15 2/10, 15 3/10, 15 4/10, 15 5/10 and 15 8/10 & 7 (marked as Sl. no.3&2 of Annexure-B to the SCN) recovered from the office premises reflect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding period of the year 200910, i.e. 1-10-2009 to 31-3-2010, as the accumulation of credit in the bank accounts of theirs and their close relatives as discussed above was huge during the corresponding period. From the value thus arrived at for the period 2007-08 to 2009-10, 30% discount was uniformly given as reflected in Annexure-C(i) to the SCN and the net value was clubbed with the turn over (accounted) furnished by the Commercial tax officer, Sattur as reflected in Annexure-C(ii) to the SCN and the aggregate value of clearance of fireworks effected during the period 2007-08 to 2009-10 was arrived at as reflected in Annexure-D to the SCN. s) Similarly based on the coolie charges and the bonus amount paid upto 25-10-2010, for the year 2010-11, available among the miscellaneous document with page Nos 44,70,71 & 72 in a file bearing Sl. No.4 recovered from the factory premises of M/s Meena Sparklers, the transaction value for the year 2010-11 was determined as detailed in the notice, considering coolie charges including the bonus attributed to 20% of the actual turn over as being determined as shown in para 5.6 of the notice. t) Thus, Shri S Meenrajan, Shri S Baskaran an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to pay the duty payable on fireworks manufactured and cleared licitly and illicitly from all the three firms, for the period 2007-08 to 2011-12, treating them as the manufacturer manufacturing and clearing excisable goods from one or more factories in terms of Para 2(v) of Notification no 8/03-CE dated 1.3.2003, as amended. Hence, it appeared that the central excise duty payable on the fireworks manufactured and cleared in the said three units is demandable from them under the provisions of Section 11A(4) of Central Excise Act, 1944 (CEA) and they are liable for penal action under Section 11AC of CEA and Rule 25 of Central Excise Rules, 2002 (CER). Further it appeared to the officers that Shri. S. Meenrajan, Shri.S. Baskaran and Shri. S. Kannan, are also individually liable for penal action under Rule 26 of CER and also liable to pay interest on the duty not paid under Section 11AA of CEA. 5. Therefore the three units represented by the three brothers were issued SCN No.81/2012/CE dated 13.08.2012 requiring them to show cause why the three firms should not be treated as one single manufacturer manufacturing and clearing fireworks from their factories in terms of section 2( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the period from April 2007 to 31-03-2012 is confirmed from them under Section 11A(10) of CEA. iv) The amount of Rs.15,00,000/- paid by M/s. Meena Fireworks Industries towards the amount payable is appropriated towards the duty demand. v) Penalty of Rs.1,97,59,664/- is imposed on them under Section 11AC of the CEA for the contravention of Section 11A(4) of the CEA. vi) Interest is demanded under Section 11Aa of CEA for the relevant period. vii) Penalty of Rs.19,00,000/- in terms of Rule 26 of CER is imposed on Shri. S. Meenrajan, one of the three brothers and partner of M/s. Meena Fire Works for having masterminded the entire activities of three factories jointly in association with his brother S/ Shri. S/. Kannan and S. Baskaran. viii) Penalty of Rs.19,00,000/- in terms of Rule 26 of CER is imposed on Shri. S. Baskaran, one of the three brothers and partner of M/s. Meena Fire Works for having masterminded the entire activities of three factories jointly in association with his brother S/ Shri. S. Meenrajan and S. Kannan. ix) Penalty of Rs.19,00,000/- in terms of Rule 26 of CER is imposed on Shri. S. Kannan, one of the three brothers and partner of M/s. Meena Fire Work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... located at Sanankulam, admittedly holding separate sheds for the production of fire crackers and was functioning independently and was assessed to VAT. During February 2010, it was converted into a partnership firm with six partners namely S/Shri S. Kannan, S. Meenarajan, S. Baskaran, Smt. M. Jeyanthi, Smt. Sermaselvi and Smt. K. Nitya [spouses of the male partners] and continued its business under the name and style of MFWI. 7.3 Meena Fireworks [MFW] was started in the year 1981 with S/Shri S. Meenarajan, S. Baskaran and Shri T. Selvaraj at Gangarakkottai owning six sheds for the manufacture fire crackers duly assessed to VAT. 7.4 Meena Sparklers, [MS] the third manufacturing unit which was started during 2003 with S/Shri S. Meenarajan, S. Kannan & S. Baskaran as its partners was producing fireworks. Only in this unit all the three brothers were partners and not in the other two units mentioned supra. The composition of the various units is furnished below: Sl. No Name of the Unit Constitution Management composition S/Shri/Ms. Remarks 1 Meena Fireworks Industries Sole Proprietor S. Kannan Started ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of the SSI exemption. 8. As regards the investigation conducted, the learned counsel submits that pursuant to certain intelligence said to have been gathered by the officers of the erstwhile Directorate General of Central Excise Intelligence, Madurai Regional Unit that MFWI had been procuring raw materials without bills and clearing their finished goods clandestinely by keeping their turnover within the SSI exemption and that there are two other partnership firms with their relatives as partners and are splitting up their turn over, the officers conducted simultaneous search operation at 11 premises on 20/10/2010 which included the factory premises of MFWI, MF, MS, their office and the residential premises of the partners, [para 3 of the notice at page no 2] to recover certain private documents under a panchanama claiming the said documents to be of incriminating nature. 8.1 The above documents seized were diaries and a hand written long size note books marked as Sl.no: 25 - 1/4 to 25 - 4/4 and a small size account note book Sl. No: 15 - 2/10, 15 - 3/10, 15 - 4/10, 15 - 5/10 and 15 - 8/10 detailing the stock of raw material held marked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions in support of the proposals in the notice are at para 28 wherein it is averred that Shri S. Kannan being one of the three brothers and partner of MF was the master mind of the entire activities whereas in fact he was not the partner of MF. 9.1 The learned counsel submits that the appellants cross examined the dealers and raw materials suppliers whose statements were relied in support and brought on record that the said statements obtained from the said persons were not based on the true facts. The respondent however on refusing them to cross examine the investigating officer, they filed their reply dated 30/03/2015 stoutly contesting each of the allegations made against them both on facts and law supported by evidences. However, the respondent passed the impugned order verbatim confirming the proposals made in the notice and the quantum of duty confirmed and the penalties imposed are detailed as below: Sl. No Name Amount of Duty Rs Amount of penalty Rs Period of demand Issue 1 Group of three brothers has been regarded as a single financial entity under Section 2 [f] 1, 97,59,664/- 1,97,59,664/- 2007-08 to 201120 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the benefit of the SSI exemption. 10.3 That the scope of Section 2 [f] and para 2 [v] of Notification No 08/2003 CE are distinct and different. Section 2 [f] deals with the person to be deemed as a manufacturer whereas notification no 08/2003 CE dealt with the determination of the aggregate value of clearance effected by a manufacturer from one or more factories. A person who is deemed as a manufacturer is liable to discharge duty under rule 8 of CE Rules and such person is also eligible to avail SSI exemption. In this case each of the above three units were the manufacturers of the excisable goods at their respective factories in their own right and are eligible to avail the SSI benefit as such manufacturer which they had availed for each of the financial years 2007-08 to 2010-11 in as much as their value of clearances for each of the above financial years was much below the thresh hold limit. Neither the Partnership Act of 2015 nor the Central Excise Act of 1944 empowered the central excise officers to create a separate financial entity consisting of three individuals to hold them liable for the payment of duty for the clearances effected from the three ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduced all the varieties of fireworks. There was nothing inherently wrong or sinister in the said observation and in fact it supports the case of the appellants. 11.1 The ld. Counsel submits that once the above facts are undisputed, the law requires that each of the said firm should be given a separate notice as to why they cannot be regarded as truly independent or to treat them as either dummy or a legal façade with no separate existence or legal status. The issue of the notice with such a proposal would be legal mandated in as much as each of the unit was admittedly in possession of legal documents such as PAN card, VAT registration, SSI certificate and Explosive licence etc., clearly affirming their independent and individual existence holding proper legal status more particularly when the notice had admitted to their undertaking the production of the fireworks at their respective factory/ies. The position of law in this regard is also fairly well settled in the following cases. * Commr. v. Unitech Containers Pvt. Ltd. - 2017 (358) E.L.T. 99 (Del.) * Premier Heavy Engineering Corpn. v. CCE - 2016 (337) E.L.T. 332 (Guj.) * CCE v. Urbane Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd (vi) Board's circular no. 6/1992 dated 29.05.1992. 13. The Ld. Counsel submits that the notice issued to the appellants being full of assumptions and presumptions without any corroborative evidences being brought on record, defying even the application of the principles of pre-ponderance of probability, the notice itself is not maintainable in law. Reliance in this regard is placed on the following judicial pronouncements. (a) Tinkoot Iron and Steel Casting Limited Vs. CCE [2015 (315) ELT 65 [Tri. -Del] (b) Golden Steel Corporation Vs. CCE [2017 (347) ELT 570] (c) Capital Ispat Ltd., versus CCE, Jaipur [2016 (340) E L T 697 [Tri. - Del] (d) Sourav Ganguly Vs. CCE [2016 (43) STR 482] 14. The Ld. Counsel submits that, without prejudice to the objections to the clubbing of the value of clearances as proposed in the notice and as confirmed verbatim by the respondent, the very unreasonableness and presumption and assumption of the investigation is clearly revealed from how the quantification of the demand has been done. 14.1. The quantification of the duty liability is indicted in Annexure D [pg. 105] which clearly records that it is the work sheet showing the duty liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrive at average value clearances per day to presumptively work out the value of clearances for October 2009 to March 2010. Reference is invited to the remarks col in work sheet Ann C [i]. and para 15.3 of the notice pg. 84-85. This proposition is not only erroneous but also illegal as it is not based on any credible evidence but on hypothesis which has no place while charging alleged evasion on the part of the appellants. Without prejudice, if the accounted turnover of Rs. 1,13,06,797 is excluded from the total turnover of Rs.1,74,81,626/- which according to the appellant is inclusive of accounted turn over, even then they are eligible to avail SSI exemption for 2009-2010 also. Reference is invited to Ann C [i] at page 100 and Ann C [ii] for work sheet. 14.3. The Ld. Counsel further states that similarly the quantification for the period 2010-11 and 2011-12 is also equally wrong. For the said period also, the notice has not adduced any evidence. Hence the notice has gone on to quantify the value based on the coolie or wages and bonus paid to works as found in the private register recovered during search operations. The said note book also contained coolie charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gross turnover of each of the unit will fall below the limit of exemption in each of the financial year. With a view to deny the exemption the department has attempted to club the clearances of all the three units and projected the case as involving large-scale evasion of duty for which they treated the three brothers as a single manufacturer inspite of the existence of three independent partnership firms, which is highly improper and totally erroneous. 15. It is further submitted by the Ld. Counsel that the various case laws referred to and relied upon in para 37 of the impugned order to sustain the proposals are distinguishable since those decisions were rendered in a totally different context and on a totally different set of facts and circumstances which are not so in the present case. Very recently the Hon'ble CESTAT, Chennai Bench in a case involving similar facts investigated by the DGCEI, pertaining to one Vadivel Pyrotech private Limited distinguished the law laid down in the above cases to hold that the demand for duty based on the proposal to club the clearances effected by the various firms as not sustainable and the ratio laid down in the said case squarely applied to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings available in para 14 of the show cause notice relying upon the following facts and documents namely i. All the units were managed by the group of three persons and other partners did not have any role to play. ii. Accounts of all the units were maintained in common. iii. Documents in the form of long sized and short sized note books. iv. Statement of S/Shri S. Meenarajan, S. Kannan and S. Bhaskaran; v. Statements recorded from the raw material suppliers; vi. Statements recorded from the traders and buyers of fireworks from the appellants; vii. Bank statements evidencing receipt of consideration, viii. Register/evidence for payment of coolie and bonus to workmen. 18.2. The learned counsel submits that assuming without admitting that the three units were managed by the three brothers and the other partners did not have any role to play, yet it would not be anything wrong or impermissible in law more particularly in terms of the Partnership Act or the Central Excise Act 1944 for the family members to form a partnership for business in their own right. So long as the composition of the family members constituting the partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t denied, it was the contention of the appellants that the said long note books was nothing but an order recording book containing entries of the orders placed on the units for the supply of fireworks. The reconciliation of the details contained in the said books in terms of the accounted sales with reference to the invoices were not considered by the respondent at all. It is submitted that the mere placement of orders for the supply of fireworks from the various buyers and its recording does not translate into actual removal of goods without bills. Equally the mere making of entries in the order book cannot form the basis for raising a demand of duty assuming that the order book represented the actual sale of unaccounted removal of fireworks. It is common in commercial practice that many a times the order so placed may not translate into an actual supply. Price negotiations take place after receipt of order and the price differs based on the brand sought for and its quality. Actual supply of goods depends on various factors and the one agreed at the time of delivery takes place on the basis of availability of the stock on hand; the transport and money to buy with the buyers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on bills only. The so-called supply of small quantity of chemical valued @ Rs.60,000/- is too small and insignificant when compared to the purchases made during the past three years to even comment. In any event, the officers did not seize or rely upon any of the records including the private records maintained by the said suppliers to substantiate their allegation or to corroborate his statement. Hence the deposition has no face value. With regard to M/S Lakshmi Metal Products, the ld. Counsel submits that even though they had initially stated that most of their sales are through bills only and only a very less quantity will be supplied without bills, but later they adopted the version of the department and confirmed that they had supplied chemicals without bills as per the entries found in the records shown to them by the officers. The version of the deponent is not convincing for the reason that he has not referred or relied upon any of the records/ledger or any other records maintained by him for the sale of chemicals to the appellant or realisation of such sale proceeds. Since he being a trader, has towed the line of the department's version to avoid any trou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and occasionally without bills. Ld. Counsel submits that with reference to question no 10 regarding the small chittas, he had clarified during cross examination that he did not see all the entries in the computer printout [ pp289-290] and admitted that most of the entries available in the computer printout does not relate to his company and he has singed the statement without proper verification. His statement coupled with the deposition during cross examination does not corroborate the alleged extensive evasion of duty and unaccounted sales of Meena Group of companies. It is the submission of the Ld. Counsel that the statement given by shri. M. S. L. Sheik Mydeen, Partner of M/s M.S.L Packaging Industries dated 24.05.2021 is too brief. It does not contain any serious incriminating stuff. He seems to have towed the line of the officers by merely accepting their suggestion in reply to question no 4. 19. As regards the statements/records from buyers, the Ld. Counsel submits that during the material time the appellant had more than 100 customers both up-country and within Tamil Nadu. Though they undertook local supplies in their own van, out stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other such alleged buyers. One cannot assume that that the same tie up would be maintained with all the other buyers also. Even with respect to the said five customers, excepting their statement no other records either private or official maintained by them for their purchase was procured, relied or even referred. A bald statement without corroboration with their purchase records is next to nullity and lacks credibility. It is only the local customers who had deposed that fireworks were supplied in their own van and this may not hold good for supply to the out-station buyers. Out of five only three local buyers have deposed that they received their supplies in the van owned by the appellant. None of the out-station buyers have said so. The finding of the respondent that the appellants had been supplying fireworks in their own van hence they could not get any transport documents is totally devoid of truth. Without placing reliance on the transport documents such as L.R. or consignment note which would contain the quantity, weight and value of goods transported, the charge of unaccounted removal stands un proved. 19.3. It is further submitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain any of their private or statutory records/ledgers etc to substantiate the charge of supplies by the appellants without issue of bills or for the receipt of payment of the consideration either in cash or through accounts. The dealers being traders merely towed the line of the officers to escape the wrath and punishment. During the cross examination all of them have deposed and clarified that they did not verify or check the various entries said to have been found in the computer print outs containing 19 pages which was in the possession of the officers which is said to contain information about the supplies alleged to have been made without bill and the corresponding payment in cash but admitted that they have merely signed the statement as suggested by the officers which clearly show that the information contained in their statements were neither true nor voluntary. Curiously enough the respondent also did not refer in his order about the said deposition/clarification given by the various deponents before him during cross examination but proceeded to rely and pass order on the basis of the original statement which is legally impermissible in law. [ pp289 to 301] 21. With ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tements and documents relied upon are in bits and pieces and no cohesive and justifiable evidence has been let in to justify the huge evasion of duty alleged against them. 21.2. The Ld. Counsel submits that in any event since the statements stand uncorroborated in the manner known to law, its credibility is doubtful but, in this case, the entire case of the department rests on the statement and on the long and short note books seized from their premises. 22. The Ld. Counsel submits that as regards the Bank Statements, the notice has referred to the maintenance of 29 accounts both current and savings bank accounts by the three units, their 7 partners and few others. In annexure C [iii] pp 102 - 103 the total amount found in the credit side of the said account were listed alluding to the fact that they may pertain to cash receipts on account of sales without bills. While there are cash deposits pertaining to the large no of sales with bills since in the trade of fireworks most payments are received in cash only that too during the material period. This apart the credit side receipt also represent transfer from current Account to the partner's account and dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he submission of the Ld. Counsel that the impugned order has imposed equal penalty of Rs. 1, 97, 59, 664/- on the above three persons under Section 11 AC apart from imposing a separate penalty of Rs 19,00,000/- on each one of them invoking Rule 26 of CER 2002. It is the submission of the Ld. Counsel that the said group of three persons cannot be at one stroke regarded as the manufacturer and a single financial entity and at the same time, on the other hand, treated as separate individuals concerned with the alleged illegal removal of the goods so as to invite a penalty under Rule 26. Rule 26 is applicable to persons other than manufacturers only and imposition of penalty under Section 11 AC and Rule 26 ibid therefore is bad in law and not maintainable. 24. The Ld. Counsel also submits that when the very demand confirmed by the adjudicating authority is erroneous and un-sustainable in law for the for the aforesaid reasons, the penalty imposed on the perceived infractions also has to necessarily fail. The Ld. Counsel also contends that the Adjudication has been inordinately delayed as the notice issued in 2012 was adjudicated only in 2015 and thus there is a violat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tine removals of fireworks are rough note books and were maintained for all the three units to have track of the orders and supplies; the diaries and note books recovered, from the residential premises of Shri S. Kannan containing the details of debtors/creditors, stock of finished products and raw materials after each Dewali, were also claimed to be in the nature of including the income & expenditure concerning their textiles business, agricultural income earned and the business of fireworks; the file bearing Sl. No. 26-1/2 and 26-2/2 (Sl. No. 14 & 30 of Annexure B to the SCN) containing the torn invoices were raised just 3 to 4 days prior to search operation and such of those invoices made out were torn on account of the fact that those invoices were prepared in anticipation that goods would be made ready by the units before the close of the day whereas on account of shortage of as productions, such quantity could not be made due to reasons such as prevalence of inclement weather during that part of winter season or shortage of raw materials or packing materials or visit of officials of various departments necessitating to stop the clearing activities, the same could not be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive statements, for the reason that in as much as two consignments were cleared under one invoice, which was accounted, the other consignment found place in the said four registers must have been unaccounted one. The Ld. AR submits that the statements were retracted only in reply after more than two years and that in so far as the quantification is concerned it can be remanded for reverification of the quantification. 28. The ld. AR submits that clubbing of the clearances was in order as the three brothers handled the administration, finance and production separately for all three units but proper books of accounts unit wise was not maintained. He draws attention to para 34 of the impugned order where the adjudicator has held that the investigation also brought out the unaccounted purchase of raw materials such as Aluminium and Magnesium alloy powder, Barium and Strontium Nitrate and Packing materials which were found recorded in the 2 long sized note books recovered from the M/s. Meena Trading Company Above all, the 3 brothers who have masterminded the illicit activities of procuring raw materials without bills, manufacturing of fireworks without maintaining any books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the cover of invoice and the other consignment with the same contents supplied without invoices, this practice was followed by them in respect of all parties; the consignment of fireworks mentioned in 4 registers (25-1/4 to 25-4/4) were unaccounted dispatches of fireworks from the factories; the payments received in cash towards illicit sale of fireworks were handed over to Shri S. Meenrajan who deposited it in anyone of the personal accounts; such cash receipts were also used for payments to the suppliers of raw materials; fireworks such as Lars/Wallas were brought from M/s Meena Fireworks to M/s Meena Fireworks Industries; the amount deposited in the account of Shri S. Kaliswaran, partner of M/s Sri Balaji Traders were payments received towards the illicit removal of fireworks from their factories; small note book bearing Sl. Nos 15-2/10 and 7 were written by him and the contents therein represented the unaccounted income and expenditure, the expenditure was nothing but the disbursement of cash towards illicit purchase of raw materials; on seeing the contents in the diary bearing Sl No. 4 recovered from his residence showing the date relating to the year 2009, he admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmal discount of 30% on such clandestine removals arrived at by the investigation appeared to be in order. It is seen from the show cause notice and the reply submitted by one of the partners Shri S Kannan, the allegation levelled by the investigation were all based on the documentary evidences and the statements from the partners, the suppliers and the customers were also confessing those evidences and as such statements are only corroborative in nature which cannot be considered to be recorded under the threat of arrest as claimed by the partner; and the course of recording the statements also seemed to be very cordial as the deponents are replied on their own way to the questions posed to them therefore reject the request of the partner to cross examine the officers which would delay the process of adjudication which has been so far delayed by more than 2 years. Further, the right to cross-examination is not an absolute right. The question whether the petitioner was entitled to cross-examination, is question which may largely depend on the facts and it is for the adjudicating authority to decide. Ld. AR reiterates the reliance placed by the adjudicator on the decisions in Modi A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Meena Fire Works Industries, M/s. Meena Fire Works and M/s. Meena Sparklers during the period 2007-08 to 2011-12 should be clubbed together in terms of para 2(v) of the Notification No.8/2003-CE dated 01.03.2003 as amended to determine the aggregate value of clearances for demanding duty from the said three firms, is tenable. 35. The other findings of the adjudicating authority of confirmation of the demand along with order of appropriation, imposing of penalties are all consequential and their tenability would hinge on the determination of the above two issues. 36. At this juncture, it becomes necessary to juxtapose certain paragraphs of the SCN and the findings of the Adjudicating authority consequent to the SCN proposals, which are tabulated as under: SCN Paragraphs Paragraphs of the Findings in OIO 21. From the above it appears that the three brothers viz, Shri S. Meenrajan, Shri. S Bhaskaran and Shri. S. Kannan, who have jointly associated one another with common understanding to evade duty and to fulfil their goal, have illicitly procured raw materials, manufactured fireworks in the units, M/s. Meena Fire Works Industries, M/s. Meena Fire Works and M/s.Meena Sparklers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd thereby they are individually liable for penal action under rule 26 of CER 2002. 24*. Further it appears that they are liable to pay interest on the duty not paid under Section 11AA of Central Excise Act, 1944. * As numbered in SCN 25. Now, therefore M/s. Meena Fire Works Industries, M/s. Meena Fire Works and M/s. Meena Sparklers represented by the three brothers viz., Shri. S. Meenrajan, Shri. S. Baskaran and Shri. S. Kannan, Elayirampannai sons of Shri. T. Selvaraj are required to show cause to the Commissioner of Central Excise, Office of the Commissioner of Central Excise, C.R. Building, Bibikulam, Madurai within 30 days of this notice as to why: (emphasis supplied) (i) M/s. Meena Fireworks Industries, M/s. Meena Fire Works and M/s. Meena Sparklers represented by the three brothers viz., Shri. S. Meenrajan, Shri. S. Baskaran and Shri. S Kannan, who have associated one another with the common understanding to evade excise duty by indulging in illicit business activities of the three firms, should not be treated as one single manufacturer manufacturing and clearing fireworks from their factories in terms of section 2(f) of Central Excise Act read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.1,97,59,664/-[(Rupees one crore ninety seven lakhs fifty nine thousand six hundred and sixty four only)( Central Excise duty Rs.1,91,84,139/- + Educational Cess Rs.3,83,682/- + Secondary & Higher Education Cess Rs.1,91,843/- )] payable on the total value of the fireworks cleared unaccounted and accounted during the period from April 2007 to 31-03-2012 from them under 11A(10) of Central Excise Act, 1944 (vi)* a penalty should not be imposed on them under Section 11AC of the Central Excise Act, 1944 * As numbered in SCN v) I impose a penalty of Rs.1,97,59,664/-(Rupees one crore ninety seven lakhs fifty nine thousand six hundred and sixty four only) on them under Section 11AC of the Central Excise Act, 1944 for the contravention of Section 11A(4) of Central Excise Act, 1944 37. We discern an inherent ambivalence in the SCN proposals in that, while para 21 of the SCN after detailing the investigation and evidences conclude that the three brothers viz, Shri S. Meenrajan, Shri. S Bhaskaran and Shri. S. Kannan, who have jointly associated one another with common understanding to evade duty and to fulfil their goal, have illicitly procured raw materials, manufactured fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and they are liable for penal action under Section 11AC of Central Excise Act, 1944 and Rule 25 of CER, 2002 and further they are individually liable for penal action under rule 26 of CER 2002 and also they are liable to pay interest on the duty not paid under Section 11AA of Central Excise Act, 1944 and then while passing the order at 40(i) holds that M/s. Meena Fireworks Industries, M/s. Meena Fire Works and M/s. Meena Sparklers, are to be treated as one single manufacturer manufacturing and clearing fireworks from their factories in terms of section 2(f) of Central Excise Act read with para 2(v) of the Notification 8/2003-CE dated 1-3-2003 as amended and that the value of clearances of fireworks including sparklers manufactured and cleared from M/s. Meena fire Works Industries, M/s. Meena Fire Works and M/s.Meena Sparklers during the period 2007-08 to 2011-12 should be clubbed together in terms of para 2(v) of Notification 8/2003-CE dated 1-3-2003 as amended, to determine the aggregate value of clearances for demanding duty from the said three firms. The demand of duty and imposition of penalty under Section 11AC is also on them. 39. It is also pertinent that both the SCN an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a single manufacturer and why the aggregate value of clearances ought not to be taken for demanding duties from the said three firms and at the same time in the quantification shown in annexure D to the SCN titled it "Worksheet showing duty liability of three brothers viz. S/Shri. S. Meenrajan, S. Baskaran and S. Kannan payable on the fireworks manufactured and cleared from M/s. Meena Fireworks Industries, M/s. Meena Fire Works and M/s. Meena Sparklers, Elayirampannai." However, when the confirmation of demand was to be made, the uncertainty continued to plague, and the demand is confirmed "from them" and penalty under section 11AC of the Central Excise Act, 1944 is also imposed "on them", leaving it to anybody's guess whether "them" is to be taken as the three brothers or the three units. In any event, no provision of the Central Excise law or the rules made thereunder have been brought to our notice whereby the Department on its own accord can nominate or anoint a group of persons as the 'manufacturer' or a group of firms as the 'manufacturer.' We thus find considerable force in the preliminary contention of the Ld. Counsel for the appellant that neither the Partnership Act of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d circular reads as under : "The question whether different partnerships having common partners, are treatable as separate manufacturers of the same manufacturer, would be a question of fact in each case to be determined on the basis of such factors among other, like composition of the partnership, existence of the factory, licence, nature of goods manufactured etc. Different firms will be treated as different manufacturers for the purpose of exemption limit. But if a firm consisting of certain partners say A.B. & C. has got more than one factory, all these factories should, of course, be combined. Limited companies whether public or private, are separate entities distinct from the shareholders composing it. Hence each limited company is a manufacturer by itself and will be entitled to a separate exemption limit. If there are two firms with only some of the partners in common, each firm is entitled to separate exemption limit and hence the question of distributing the exemption may not arise. If one firm or one individual owns several factories, he or it gets exemption only in respect of one lot and the manufacturer being only one entity, there will be no question of distributin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with us. As per the provisions contained in the Partnership Act 1932, persons can come together to form a partnership firm. Such a partnership can be terminated or dissolved only as per law. An external agency like the department cannot constitute or disturb the constitution of the partnership by removing certain persons for the purpose of casting duty liability. The department has, in fact, made all eleven units to be dummy units and created a new entity 'BPKG run and operated by GTP' to be responsible for the clandestine activities. The provisions of law do not permit the same. 31. From the foregoing we are of the considered opinion that the impugned order dt. 13.07.2016 cannot sustain and requires to be set aside which we hereby do. For the same reasons, the order passed by Commissioner (Appeals) dt. 31.01.2019 requires no interference. The same is sustained. 32. In the result, the appeal filed by assessee is allowed. The appeal filed by department is dismissed." 43. As noted supra, in the instant case before us, since the said lacunae of lack of clarity in demand exists in the demand proposal in the SCN as well as its confirmation in the impugned OIO, it is a fundament ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the Gazetted officer before whom the statement was given, deposing the factum of such statement having been recorded from the deponent- which is the method or manner of proving the recording of the statement, which statement under section 14 is already considered relevant for the purpose of proving the truth of the fact it contains- that is to say, the said deposition of the Gazetted Officer stating that the deponent had indeed given the statement before him, would be the manner of admitting or mode of proof of the admissible substantive evidence. 58. Again, 9D(1)(b) provides for the deponent's statement given before the Gazetted Officer to be admitted as substantive evidence, when the person who made the statement is examined as a witness in the case before the adjudicating authority and the adjudicating authority is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. This sub section (b) of Section 9D(1) takes care of a situation where the witness who is deposing before the adjudicating authority turns hostile and on an evaluation of the circumstances of the case the adjudicating author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement given under Section 14 before the Gazetted Officer contains, but also to determine whether or not the witness is hostile, and to decide whether or not to place reliance on the statement as per the mandate of Section 9(1)(b) in the circumstances of the case, as has been elaborated supra. This interpretation is also in consonance with the decision of the Honourable Apex Court in K I Pavunny's case as stated supra, wherein the Apex Court emphasised that in the case of a retracted confession the court should examine whether the confessional statement is voluntary; in other words, whether it was not obtained by threat, duress or promise and if the Court is satisfied from the evidence that it was voluntary, then it is required to examine whether the statement is true. Such an interpretation is also in line with the decision of the jurisdictional Madras High Court cited supra and given the pari materia provisions of the Customs Act, 1962, we are of the view that the said interpretation would hold good under the pari materia provisions of Customs Act as well." This tribunal had also thereafter summed up the position in law as under: "66. In sum, the following emanate from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the witness appearing before it as a hostile witness and then to decide in the facts and circumstances whether to rely on the earlier statement or not, as more elaborately elucidated supra. Needless to say, such examination in chief has to be conducted by the adjudicating authority in the presence of the assessee/representative of the assessee. This is in accordance with the decision of the Honourable High Court of Punjab and Haryana in Jindal Drugs Pvt Ltd v. UOI, 2016 (340) ELT 67 (P & H) F. When the adjudicating authority is examining the witness, it should be noted that minor contradictions, inconsistencies or embellishments of venial or trivial nature which do not affect the kernel of the Department's case should not be taken to be a ground to reject the statement deposed before the Gazetted officer in its entirety. It is only when such contradictions/inconsistencies cast a serious doubt about the truthfulness or creditworthiness of the witness so as to render the evidence unacceptable, that the adjudicating authority may not be in a position to place reliance on such evidence. Serious contradictions and inconsistencies which materially affect the case of the Department hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Balakrishnan of M/s. Sri Krishna Chemical Industries,(supplier of raw materials); evidenced that these deponents have more or less resiled from their statements deposed under Section 14 before the Departmental Officers. 48. In such circumstances, the request of the appellant for cross examination of the Investigating Officer, after having given up his request for cross examination of the other Departmental Officer sought, cannot be said to be unreasonable. We therefore hold that the denial of cross-examination of the investigating officer by the adjudicator is a violation of the appellant's right in this regard as held by the Honourable High Court of Allahabad in CCE, Allahabad v. Govind Mills Ltd., 2013 (294) ELT 361 (All) and CCE Meerut I v R.A. Castings Pvt Ltd, 2011 (269) ELT 337 (All) . 49. We also note that a coordinate bench of this Tribunal has in the case of M/s. Vadivel Pyrotech Private limited v The Commissioner of CGST & Central Excise, vide Final Order No. 40295-40298/2022 dated 18.08.2022, held that as per Section 9D of the CEA, 1944, the statement can be relied only if the person is examined. The relevant portion is as under: "37. Apart from the computer prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as indicated in Annexure C (iv) the Notice premises calculations on a ratio of coolie charges paid to factory labours vis a vis contract labours as deposed by Shri. Meenarajan in his statement dated 22.05.2012. After noting the actual coolie charges paid to factory labour during 2010-11 (upto 25.09.10) based on the aforesaid ratio, the officers proceed to arrive at the coolie charges paid to contract labour. The figures of the coolie charges paid to factory labour and the figures of coolie charges paid to contract labour so worked out are totalled and to such a total the actual bonus paid to factory labour is added to then arrive at the total amount paid as coolie and bonus during 2010-11. Then yet again on an assumption that such coolie and bonus total would be 20% of the total sale value, based on such worked out total the officers arrive at a presumptive 20% of sale value and then multiplies the same by five to arrive at 100% of the sale turnover for 2010-11. We do not condone such arbitrary determination of unaccounted clearance value and consequential determination of tax liability and hold such quantification arrived at as illegal. It is also pertinent that the adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the person's intent to commit fraud or wilful suppression or misstatement of facts etc., with intent to evade payment of duty. In Uniworth Textiles v CCE, Nagpur, 2013 (288) ELT 161 (SC), while considering the ingredients required to invoke the extended period of limitation, the Supreme Court observed that it is a cardinal postulate of law that the burden of proving any form of mala fide lies on the shoulders of the one alleging it. The Apex Court referred to its decision in Union of India v. Ashok Kumar & Ors. - (2005) 8 SCC 760 wherein it was held that "it cannot be overlooked that burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility." Thus, while the general standards of proof for civil cases are the preponderance of probability and the standards for criminal cases are beyond reasonable doubt, these standards have also been eschewed in favour of "clear and convincing evidence" when the allegations are of more serious nature and also attract heavy financial consequences. At the cost of repetitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Patna has held as under: 9. In our opinion, since the charge was for clandestine manufacture and surreptitious removal of finished final product, the same is required to be proved beyond doubt by the Revenue. One has to keep in mind that, though being the main ingredient, betel-nut is not the only raw material which is used in manufacture of Pan Masala. That apart, since the investigation has been carried only at the transporters end, no presumption could be drawn with regard to manufacture and removal of the final product. Presumptions and assumptions cannot take place of positive legal evidence, which are required for proving the charge. Even if, it is assumed that some raw materials were received at the factory of the respondent during the said period, the same cannot become conclusive proof of production and clandestine sale to different parties. Due to lack of positive evidence, benefit of doubt will always go in favour of the assessee. 10. Accordingly, we answer the reference against the Revenue and in favour of the assessee and it is held that the receipt of one of the raw materials, does not conclusively prove clandestine manufacture and surreptitious removal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , however, say with some certainty is that inferences cannot be drawn about such clearances merely on the basis of note books or diaries privately maintained or on mere statements of some persons, may even be responsible officials of the manufacturer or even of its Directors/partners who are not even permitted to be cross-examined, as in the present case, without one or more of the evidences referred to above being present." 53. We find that in the instant case the evidence adduced is woefully inadequate, much less 'clear and convincing evidence'. Apart from the reliance placed on the statements, which we have determined as inadmissible for the reasons elaborated supra, the information found in the long and small note books and other records at best would prima facie create a strong doubt about the unaccounted manufacture and clearance of fireworks and sparklers. However, there is no evidence let in by way of excess purchase of raw material(even the statements of the raw materials suppliers taken do not indicate the quantum of raw material that is alleged to have been supplied), excess production, excess purchase and consumption of packing material (again the statements of the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the firms; further the dispatch of raw materials, delivery of finished goods from one unit to other and sale of fireworks of all varieties manufactured in all the three units under invoice of each firm irrespective of place of manufacture and the turnover of each firm, despite different production capacity, was more or less equal, drives home the point that the three units were interdependent on each other. We find that the adjudicating authority has not rebutted the appellant's contentions that all the three firms were partnership firms created at different points in time, consisting of different partners and functioning at different premises manufacturing different products with different brand names. They have different manufacturing sheds and workers. There is no allegation that the other units are only on paper since the manufacturer of the products have taken place in each of the said three firms separately and there is no allegation that all the units manufacture all the products. It is also not the case of the Revenue that all the units dispatch products of other firms at all instances. In fact, no efforts seem to have been undertaken to quantify the alleged clandestine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name of dummy units so as to facilitate clandestine clearance in the name of the main unit. After discussing various bank details, in para 10.11 of the SCN, it is stated that Vadivel Group of firms have maintained various accounts not only in the name of their firms but also in the name of other units and received money and used in their business activities. These bank statements do not show that there is flow back of funds in the nature of transactions for purchase of raw material or collection of amounts from the customers. 39. For clubbing the clearances, the department has to establish mutuality of interest, flow back of funds between the main unit and the alleged dummy units. For this, the department has to produce evidence that the main unit was purchasing raw material through the dummy units and also removing the finished products manufactured by them through the dummy units. It also has to be established that the dummy units do not have any existence or facilities for manufacture of goods on their own. Such evidences are absolutely absent in the present case. Merely because Shri V.Arumugasamy, his son and family members were partners in the different units cannot be a gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f wife, it would not make the unit owned by wife as dummy unit. The prime requirement, for clubbing the clearance of two units is that both the units do not have any independent existence or independent machinery and infrastructure to manufacture the goods. If both the units are complete by itself, capable of manufacturing the goods without any help from the other unit, it has to be held that both the units are independent units. The evidence of common office premises, common staff and common maintenance of records cannot be a sufficient ground to club clearances of the units. After reproducing the relevant paragraphs of the decision in CCE Kanpur v Sharad Industries, this Tribunal went on to hold as under : "From the discussions made above, we do not find the department has been able to establish sufficient grounds for clubbing the clearances of each unit or for confirming duty against all the 6 units." 55. Ld. AR has relied on the decisions in Modi Alkalies & Chemicals Ltd, 2004 (171) ELT 155 (SC), Parle Bisleri Pvt Ltd, 2011 (263) ELT 15 (SC), Supreme Engineering Works, 1996(82) ELT 102 (Tri) and L.R. Industries, 1999 (114)ELT 550 (Tri). As is evident from the facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igid. It cannot be invoked by the appellant to assail the continuance of the show cause notice proceeding dated 27-1-2005 as it is based on the decision of the Learned Single Judge in W.P. No. 18918 of 2000 vide order dated 24-6-2005. The hands of the adjudicating authority cannot be tied and shackled. If any error is committed by an adjudicating authority while passing it is always open for an assessee to assail the same in an appellate proceeding under the Act.". (emphasis supplied) A similar view had been expressed even earlier by the Madras High Court in its Judgement dated 05-01-2022 in Unic Associates v. Commr. Of GST & C.Ex (Appeals-I), Chennai North, 2022 (61) GSTL 27 (Mad), wherein it was held as under: " 11. Considering the same, I do not find any merits in this writ petition. Before parting with this order, I would like to stress that the authorities under the Acts overburdened with litigation and it may not be fair to hold that the orders passed long after issuance of show cause notice would be in violation of principles of natural justice. Nothing precluded the petitioner from knocking the doors of the Court under Article 226 of the Constitution of India for a Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings shall be deemed to have concluded as if no notice had been issued]. 5.1 The above amendment in the 2nd Column came into force only on 29.03.2018. Explanation 4 to Section 28 was also amended. In the year, 2018, Explanation 4 read different from Explanation 4, as it reads now. They read as under :- Explanation 4: For removal of doubts, it is hereby declared that, in cases, where notice has been issued for non-levy not paid, short-levy or short-paid or erroneous refund after 14th day of May, 2015, but before the date on which, the Finance Bill 2018 receives the assent of the President, they shall continue to be governed by the provisions of Section 28 as it stood immediately before the date on which, such assent is received. Explanation 4: For the removal of doubts, it is hereby declared that, notwithstanding anything to the contrary contained in any judgment, decree or order of the Appellate Tribunal or any Court or any other provisions of this Act or the rules or regulations made thereunder, or in any other law for the time being in force, in case where, notice has been issued for non-levy, short-levy, non-payment, short payment or erroneous refund prior to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e etc. The incorporation of such words gives certain degree of flexibility to the Department such as if some circumstances or insurmountable exigencies arise, which makes the recourse unpracticable or not possible, the authorities can deviate from what was required to be done in terms of the statute. When the challenge is laid to the act of the authorities deviating from the rule, the onus shifts on the authority to prove that it was not practicable or possible to follow the rule. The same is to be adjudicated on the facts and circumstances of each case." (emphasis supplied) iii Thirdly, in the Kopertek case cited supra, the Tribunal has noted the facts of the case as under: "27. The show cause notice, in the present case, was issued on 28.04.2015. It called upon the noticees to show cause within thirty days from the date of receipt of notice, failing which it was specifically provided that the matter would be adjudicated ex parte without any further communication. It is seen that the period one year from 28.04.2015 expired on 27.04.2016. Even if cause was not shown by the noticees to the said notice, the Adjudicating Authority should have proceeded to decide the matter ex pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of one month stipulated in the show cause notice and, in fact, no reply was filed till 07.09.2016, which was the date fixed for hearing by the Adjudicating Authority. In this connection, learned authorized representative appearing for the department not only placed reliance upon section 33A of the Central Excise Act, but also contended that since the Adjudicating Authority is required to strictly adhere to the principles of natural justice that require adequate opportunities to be given to the noticees before the adjudicating the show cause notice the Adjudicating Authority was justified in granting time to the noticees to cross-examine and also provide adequate personal hearing. 30. It is not possible to accept this contention of the learned authorized representative appearing for the department. 31. The principles of natural justice do not admit of such delayed adjudication where time limit is fixed under a Statute to adjudicate the matter. The Adjudicating Authority cannot endlessly wait and has to utilize its discretion in a fair and reasonable manner so as to balance between the principles of natural justice and the time set out in the Statute for adjudication of the sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40 thereof. 58. We are therefore of the view that the aforesaid decision of this Tribunal in Kopertek Metals Pvt Ltd, which turns on the peculiar facts and circumstances of that case, cannot be construed as laying down a blanket proposition that any delay in adjudication beyond the time limit prescribed under sub-section 11 of Section 11A of the Central Excise Act would automatically result in the impugned order being vitiated for non-adherence to the time limit stipulated, dehors an examination of the facts and circumstances or insurmountable exigences which made it impracticable for the adjudication to take place, as has been held by the Delhi High Court in Swatch Group. 59. It is also pertinent to note the observation of the Delhi High Court in Swatch Group case cited supra, viz., that "When the challenge is laid to the act of the authorities deviating from the rule, the onus shifts on the authority to prove that it was not practicable or possible to follow the rule." Implicit in the said observation of the Honourable High Court, is the essential prerequisite of laying such a challenge before the authority, viz., that the adjudication is being delayed due to the inaction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of inertia which prevailed thus leads us to the inevitable conclusion that the respondents clearly failed to discharge their obligation within a reasonable time. The issuance of innumerable notices would also not absolve the respondents of their statutory obligation to proceed with promptitude bearing in mind the overarching obligation of ensuring that disputes are resolved in a timely manner and not permitted to fester. Insofar as the assertion of the assessees' seeking repeated adjournments or failing to cooperate in the proceedings, it may only be noted that nothing prevented the respondents from proceeding ex parte or refusing to reject such requests if considered lacking in bona fides. 87. We are further constrained to observe that the respondents also failed to act in accord with the legislative interventions which were intended to empower them to pursue further proceedings and take the adjudicatory process to its logical conclusion. We have in the preceding paragraphs of this decision taken note of the various statutory amendments which were introduced in Section 28 and were clearly intended to ratify and reinforce the jurisdiction which the Legislature recognised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it impracticable for the adjudication to take place and if prima facie it meets our satisfaction, then the requirement to seek such explanation from the adjudicating authority would be obviated. 63. Such an examination, in our view, would be in consonance with the observations not only of the Honourable Delhi High Court in the case of Swatch Group cited supra, but will also be in line with the observation of the coordinate bench of this tribunal in para 40 of the case of M/s. Kopertek Metals Pvt Ltd. While we have addressed the issue of delay in adjudication raised by the Ld. Advocate in law, we are not entering into an examination of the same on facts in this case, given that on merits we have formed a view that the matter is to be decided in favour of the appellant, and thus nothing much would turn on such an examination if embarked upon and rather that in turn might delay the adjudication at our end. 64. In the light of our discussions above after appreciating the facts and evidence and following the decisions cited supra, as regards the principal two issues that arise in the instant case, we hold that: i. The finding of the Adjudicating Authority that M/s. Meena Fire Wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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