Custom, Excise & Service Tax Tribunal
M/S Metro (India) Wood Crafts Pvt. Ltd vs Collector Of Central Excise, Patna on 30 January, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
EAST REGIONAL BENCH : KOLKATA
Ex. Appeal Nos.425-427/06
Arising out of O/O No.07/Denovo/Commr./2006 dated 30.05.2006 passed by Commissioner of Central Excise, Patna.
For approval and signature:
DR. D. M. MISRA, HONBLE JUDICIAL MEMBER
DR. I. P. LAL, HONBLE TECHNICAL MEMBER
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not? :
3. Whether His Lordship wishes to see the fair copy
of the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s Metro (India) Wood Crafts Pvt. Ltd.
Shri R. K. Agarwal
Shri Bimal Kr. Chopra
APPELLANT(S)
VERSUS
Collector of Central Excise, Patna
RESPONDENT (S)
APPEARANCE Shri K. K. Anand, Advocate for the Appellant (s) Shri S. Misra, Addl. Commr. (A.R.) for the Department CORAM:
DR. D. M. MISRA, HONBLE JUDICIAL MEMBER DR. I. P. LAL, HONBLE TECHNICAL MEMBER DATE OF HEARING : 30. 01. 2014 PRONOUNCEMENT : 22. 07. 2014 ORDER NO.FO/A/75414-75416/2014 Per Dr. D. M. Misra :
These appeals are filed against the Order-in-OriginalNo.07/Denovo/Commr./2006 dated 30.05.2006 passed by Commissioner of Central Excise, Patna.
2. Briefly stated the facts of the case are that the Appellants are engaged in the manufacture of Commercial Plywood and Block Board falling under Chapter Heading 44.08 of the First Schedule to the Central Excise Tariff Act, 1985. Pursuant to the visit of the factory by the Officers of Directorate General of Central Excise Intelligence (DGCEI), Jamshedpur and subsequent investigation, a show-cause-cum demand notice was issued to the Appellants on 20.01.2003 alleging clandestine manufacture and clearance of plywood without payment of Central Excise duty to the tune of Rs.1,39,34,430/- for the period from January, 1998 to March 2001 on the garb of Job-work. The said show-cause notice was adjudicated by the Commissioner of Central Excise, Patna vide Order dated 06.12.2004 confirming the duty demanded and imposed penalty equivalent to the duty. The said order was challenged by the Appellants before CESTAT, New Delhi. Vide Order No.395-397/05-CS/175-177/05-C dated 2nd May, 2005, the Tribunal remanded the matter to the Ld.Commissioner for denovo adjudication. Pursuant to the said remand order, the ld.Commissioner, Patna, re-adjudicated the case; confirmed the duty and imposed equivalent penalty under Section 11AC of Central Excise Act, 1944 on the Appellant, M/s Metro (India) Wood Crafts Pvt. Ltd., penalty of Rs.10.00 lakhs on Shri R. K. Agarwal, Director and penalty of Rs.5.00 lakhs on Shri Bimal Kumar Chopra, Director of M/s Metro (India) Wood Crafts Pvt. Ltd., under Rule 209A of erstwhile Central Excise Rules, 1944.Hence, the present Appeals.
2.1 On conclusion of the hearing before this Tribuna, both sides have been directed to file their written submission within four weeks; the Appellant filed it on 13.03.2014 and the Revenue filed their submission on 01.07.2014.
3. At the outset, assailing the impugned order, the ld. Advocate, Shri K.K.Anand appearing for the Appellants, submits that the order has been passed in gross violation of principle of natural justice, inasmuch as, the ld.Adjudicating Authority has not considered the request for cross-examination of witnesses, whose statements were recorded behind their back and relied upon in the show-cause notice and also in passing the order.He hasfurther submitted that these statements, in the absence of cross-examination, cannot be accepted as reliable piece of evidences in view of the decision of the Honble Delhi High Court in the case of J.K. Cigarettes Vs. Commr. of Central Excise: 2009 (242) ELT 189 (Del.) and the decision of Honble Allahabad High Court in the case of Commr. of Central Excise, Meerut I VsParmarth Iron Pvt. Ltd.: 2010 (260) ELT 514 (Allh.).
3.1The ld. Advocate also submitted that the affidavits furnished by the Appellant from eight job-work material suppliers, were also erroneously not considered by the ld. Commissioner on the ground that these witnesses were from un-organized sector and not maintaining proper accounts. This has also resulted in miscarriage ofjustice. It is his contention thatthe evidentiary value of these affidavits cannot be brushed aside in view of the judgement of the Honble Supreme Court in the case of Parle Beverage Pvt. Ltd. Vs. Commr. of Central Excise, Bombay : 1998 (98) ELT 585 (SC).
3.2 Challenging the Order on merit, he has submittedthat the Department has failed to place any evidence to show that the Appellants had cleared finished goods viz. plywood of 24 mm thickness during the period 01stApril, 1997 to 31st March, 2001 clandestinely, on the garb of Job-work, which was for a continuous period of 48 months; thus the entire demand is based purely on assumptions and presumptions and conjectures.The ld. Advocate has made a sincere attempt in support of his argument that the demand is based on assumption and presumption by referring to para 32 of the impugned Order wherein the ld. Commissioner herself has conceded that the quantity and the price of plywood/block board could not be ascertained from any documents available and therefore, the Department had adopted the highest price of plywood in arriving at the assessable value of the goods cleared. Hehas submitted that even from the allegation in the show-cause notice, e.g., at Para 1.5 & Para 3, it is clear that the demand is based on assumptions. In Para 1.5, it was alleged that the Appellants might not be engaged in the activity of job work processing , but engaged in the removal of finished goods, i.e. plywood, block board manufactured in the guise of the said cash memos; in Para 3 , it has been alleged that from the statement of the Director, that they might have been indulged in clearances of excisable goods in the guise of cash memos for job work. Further, assailing the computation of demand, the ld. Advocate submitted that a perusal of the same would reveal that the year wise duty liability is calculated on the basis of job work cash memos/Bills; the quantities mentioned therein for the quantum of job work done either towards core veneer drying or face taping, are consdered as the quantity of finished goods cleared clandestinely.It is concluded by the Department without any evidence that against the said job work/cash memos, the Appellant had cleared plywood of 24 mm thickness to the parties, whose name appeared in the job work challans.
3.3 Further, he has submitted that there were abut 80 to 100 parties for whom the Appellants had carried out job work and the Department had recorded the statements of five such persons and one person and had sent a letter denying sending of any goods on job work to the Appellants. It is his submission that none of these persons were questioned to ascertain whether they had received the plywood of 24 mm thickness under the guise of the cash memos far carrying the job work for them. He further submits that the Department had not recorded the statements of respective owners/drivers of the vehicle so as to ascertain whether the details given in the job work challans are correct or otherwise; also to find out whether they had transported plywood of 24 mm thickness instead of core veneers as mentionedin the challans.
3.4 Further, he has submitted that because the Appellant did not follow the procedure of job work as laid down under Notification 214/86-CE dated 01.03.1986, the ld. Commissioner had blindly assumed that the Appellants had cleared plywood of 24 mm thickness clandestinely against the job-work challans. Further, he has submitted that the ld. Commissioner has without any basis, rejected the Chartered Engineers Certificate dated 14.04.2004 certifying the capacity of production of the plant & machinery observing that the said Certificate was furnished late. It is his submission that when the Officers visited the Unit that they did not carry out any investigation relating to the manufacturing capacity of the machines installed; also during the course of recording the statement of Shri R. K. Agarwal, no question was put to him about the capacity of the installed plant machinery. He has submitted that even there was no question/suggestion put to Shri R. K. Agarwal mentioning that the cash memos reflected clandestine clearance of 24 mmthickness plywood in the guise of job work of core veneer drying or face veneer tapping. Further, he has submitted that the Department has not carried out any investigation to find out whether the vehicle shown in the respective job work cash memos, are capable of transporting the quantity of assumed 24 mm plywood. He has submitted that the quantiy of veneer mentioned in job work cash memos, if converted into 24 mm thickness plywood allowed to have been removed clandestinely, the total weight of such goods would come Approx. 37.5 MT. and in the normal course, a truck could not carry the said load. He has submitted that even though they have adduced evidence in respect of capacity of the vehicles mentioned in the job-work challans collected from the respective transport offices, which are certified to be much less than the assumed weight of clandestinely removed goods, the same were not considered.
3.5 Further, he has submitted that the Appellants were undertaking job work, besides manufacture the plywood, during the relevant period, is corroborated from the respective balance sheet of the Appellant as in each of the balance sheets for the period 1997-1998 to 2000-2001, the Appellant had against the headother income, reflected the amount received from the activity of Job-work.
3.6 He has further submitted that demand has been confirmed for the period 1997-98 to 2000-2001, alleging that the Applicant had removed 995664 Sq.Mtr of 24 mm thickness plywood, whereas their per day capacity to manufacture 24 mm plywood was 238.14 Sq.Mtr. It is not clear as to how the Department has assumed the clearances of entire quantity of plywood during this period was of only 24 mm, when the Applicants were manufacturing plywood of thickness, such as, 3 mm, 4 mm, 6 mm, 8 mm, 12 mm, 15 mm, 18 mm & 24 mm. He has further submitted that the demand of 24 mm thickness of plywood, was very less against the total production, which was in the range of around 2% as would be evident from the closing stock of the finished goods reflected in the respective balance sheets. In support of his submissions, he has referred to the following judgements :
(i)Vinod Solanki Vs. Union of India : 2009 (233) ELT 157 (SC) ;
(ii) Tukaram S. Dighole Vs. ManikraoShivajiKokate : (2010) 4 SCC 329 ; (iii) Chandan Tobacco Co. Vs. Commr. of Central Excise, Vapi : 2011 (270) ELT 87 (Tri.-Ahd.) ;(iv) Paras Laminates P. Ltd. Vs. CCEx., Jaipur : 2005 (180) ELT 73 (Tri.Del.) (v) Commissioner Vs. Paras Laminates P Ltd. : 2006 (199) A 182 (SC) ;(vi) DurgaTrading Company Vs. CCEx., Lucknow : 2002 (148) ELT 967 (Tri.-Del.);(vii) Commissioner Vs. Durga Trading : 2003 (157) ELT A315 (SC); (viii) R. K. Patel & Company Vs. CCEx. & Customs, Nasik : 2008 (227) ELT 558 (Tri.-Mumbai) ;(ix) R.A.Castings Pvt. Ltd. Vs. Commr. of Central Excise, Merrut : 2009 (237) ELT 674 (Tri.-Del.).
4.Per contra, the ld. A.R. for the Revenue has submitted that the officers of DGCEI conducted search of the premises of the Appellants on 15.12.2000 and during the course of search operation, documents were seized, which included cash books/delivery challans for job work. Further investigation was carried out by the Department by recording statements of the Director of the Appellant and by issuing summons to persons who claimed to have supplied goods for job work. It revealed that the majority of job workers were non-existent as summons issued to them returned with remark of un-served, not found etc.. by the postal authorities. It is his submission that the persons who had received the summons appeared before the investigating authority and most of them had declined of having sent any goods to the Appellant for job-work. Therefore, the claim of the Appellants is that they have undertaken job work in their premises proved to be false. He submits that the ld.Commissioner accepting the statements of these persons, confirmed the demand observing that the evidences furnished in the form of statements by these persons, are admissible in evidence and there is no necessity of any cross-examination. Further, he submitted that soon after search of the premises, Shri Pawitra Chopra, Authorized Signatory of the Appellants, accepted about the evasion of Central Excise duty and tendered an amount of Rs.10.00 lakhs voluntarily. Therefore, subsequent, denial of clandestine removal by the Appellant, is un-sustainable and accordingly not accepted by the adjudicating authority. Further, he has submitted that the Appellants in the denovo proceedings before the ld.Commissioner, has produced affidavit of five persons, who claimed to have supplied the veneers for core drying were not accepted by the adjudicating authority on the basis of discrepancies noticed in the said Affidavit. He has submitted that since the Appellants did not produce the details of clandestine removal, therefore, the Department has no other option, but to adopt the price and the quantity as shown in the respective cash memo for the determination of value as well as duty.
4.1. The plea of job work by the Appellant is also falsified from the statements of the persons recorded by DGCEI, who has revealed that the transportation of green core veneer, for such a long distance for the purposes of drying, is practically not viable due to the reason that in such condition, veneer may become black and may stick together.
4.2. Answering to the argument of the Appellant that the Department has not recorded the statement of concerned transport companies which have transported the veneer from the premises of the said supplier and also no investigation has been caused as to the detailed procurement of raw material, consumption of electricity, labour employed, capacity of the machine, receipt of payment, receipt of goods which established the identity etc, he has submitted that since it is a case of clandestine removal where the evader camouflages the paper trail, therefore, the Department has investigated on the basis of available evidences which point towards to preponderance of probability of evasion and in support referred to the judgment in the case of CCE, LucknowVs M/s J M Agarwal Tobacco Co. Pvt. Ltd.(2010-TIOL-734-CESTAT-DEL).In the case of Collector of Customs, Madras & Others Vs. D. BHOORMULL (2002-TIOL-253-SC-CUS) the Hon'ble Supreme Court has observed as :"The prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree; for, in all human affairs absolute certainty is a myth." Thus, the department has provided evidences that sufficiently support the allegations against the Appellant made in the Show Cause Notice.
4.3.Further, answering to the submission of the Appellant that Shri Pawitra Chopra was coerced to write a dictated letter and signed the chequeforRs. 10 lakhs, is contrary to his letter dated 15.02.2014, which clearly stated that the payment was made and without any protest. Thus, in the face of these contradictions there is a clear admission of evasion of duty as discussed in para 36 by the Adjudicating Authority.
4.4. It is also the Department's contention is that the affidavits mentioned in the defense reply were procured after a lapse of three years on 29.07.2005, subsequent to the remand by the Hon'ble CESTAT for denovo adjudication and hence are not reliable considering the contrary statement of Shri R.K. Agarwal as discussed in para 31 by the Adjudicating Authority. Referring to judgment of this Tribunal M/s. Universal Radiates Ltd. vs. Commissioner of Central Excise, Coimbatore [2002(148) ELT 1193 (Tri.-Chennai)] he has submitted that in the said case it was held that admission made by the Purchase Assistant, Authorised Signatory that there was clandestine manufacture and removal of goods, and such admission never retracted at anytime, findings of manufacture and clandestine removal of goods as arrived were quite reasonable. Further, he has submitted that private records are reliable piece of evidence as held in the case of CCE,Indore Vs. M/s Pithampur Alloys Casting Ltd. 2013-TIOL-1932-CESTAT(DEL).Thus, in view of the facts discussed by the adjudicating authority that the preponderance of probability of clandestine removal of plywood is established against the job work cash memos. Further, Shri R.K.Agarwal was responsible for the day to day affairs and hence was liable to Penal action as held by the adjudicating authority.
5. Heard both sides and perused the records. The issue for determination is: whether the Appellant during the period April, 1997 to March, 2001, manufactured and cleared clandestinely excisable goods viz. 24mm thickness plywood against cash memos/challans in the guise of job work of Core Veneer drying and tapping of face Veneer.
5.1The Revenue pursuant to search of various premises including the Appellants factory, on 15.12.2000, retrieved documents and recorded statements of few persons. On completion of investigation, issued the demand Notice on 20.01.2003. It is not in dispute that during the course of said search, no discrepancy in the stock of finished goods/ raw materials, were noticed and the Appellant had deposited an amount of Rs Ten lakhs during investigation.
5.2 The allegations and confirmation of the demand mainly rests on the premises that the Appellant though claimed to have carried out the job work of core veneer drying&tapping of face Veneer, but neither informed the department about the said activity in their statutory RT-12 Returns or Classification declaration filed under relevant Rules, nor followed the laid down procedure for undertaking job-work in its factory premises; also, it was found during investigation that summons sent to around fifteen persons mentioned in the respective job-work cash memos/challans, were returned by the postal authorities as not-found; from the statements of five raw material suppliers, and a letter from the sixth one, whose names appeared in the respective job work cash Memos/challans, it revealed that these persons had never sent raw material for job work of Core Veneer drying and Face Veneer Tapping to the Appellant and pleaded ignorance about the said payments. Besides, it has been noticed that the Directors in their statements could not furnish the correct address of all such persons who had entrusted the job-work of core veneer drying & Face veneer Tapping to the Appellant on the pre-text that these persons belong to the unorganized sector. On the day of visit of the factory, Shri PawitraChopra has paid Rs.10 lakhs accepting the clandestineremoval of goods. Thus, from the above evidences it has been concluded that the plea of job-work of core veneer drying & Face Veneer Tapping in the factory, is false and the Appellant had in fact manufactured and cleared ply wood of 24mm thickness in the guise of job-work of core veneer drying & Face veneer Tapping.
5.3 The Appellant had assailed the findings of the ld.Commissioner pleading that the statements of these five persons and the letter of the sixth one, which were collected behind their back, cannot be relied upon as these persons were not produced/allowed to be cross examined by the Appellant. Besides, the Appellants, had filed affidavits of theirwitnesses, whose names, also figured in the cash memos/challans, to buttress their claim that during the relevant period, they had undertaken the job work of core veneer drying & Face Veneer Tapping besides manufacturing of plywood in their factory; non-consideration of these affidavits had resulted in to mis-carriage of justice.
5.4The other argument advanced by the ld.Advocate is that the machineries installed by the Applicant are incapable of manufacturing the quantity of 24 mm thickness plywood alleged to have been removed without payment of duty during the relevant period. In support, they have relied upon a Chartered Engineers Certificate who has certified that the capacity of machines to produce 24 mm of plywood per day is around 238.14 Sq.Mtrs. Accordingly, for the period in dispute, they could not have manufactured the alleged quantity of ten lakh square meter of 24mm thickness plywood. Also, referring to the respective job work challans/cash memos, an attempt was made to establish that if it is accepted that the quantity of veneers mentioned in the challansas 24 mm thickness plywood, instead of core veneers, then total weight of plywood assumed to have been cleared clandestinely works out to approximately, an average of 37.5 MT per challan. It is their contention that the vehicles mentioned in the said job work challan are neither capable nor permitted for transporting the said quantity of goods. In support, necessary certificates collected from the respective Regional Transport authority, in relation to few vehicles, are referred to by the Appellant. It is also the contention of the appellant that their factory was visited by the officers in December 2000, whereas, the demand had been issued up to the period March 31, 2001, which means that even after the raid, the appellant had carried out the activity of clandestine manufacture and clearance of finished goods in the guise of job work, a proposition, which is absurd.
5.5 The ld.Advocate, Shri K. K. Anand, vehemently argued that denial of cross-examination of the Departments witnesses, whose statements were recorded behind their back, has resulted into gross violation of principle of natural justice and the finding of the ld.Commissioner in rejecting the request for cross-examination on the ground that these statements were recorded under Section 14 of the Central Excise Act, 1944 and it has got evidentiary value, is contrary to the provisions of the Act and principles of law laid in this regard by the judiciary. The ld. Advocate submits that even though the ld.Adjudicating Authority has not referred to the relevant provision in rejecting their claim for cross examination, and accepted the statements as evidence;the provision applicable to such circumstances is laid down under Section 9D of the Central Excise Act, 1944, which is applicable to departmental proceedings also. He hassubmitted that while examining the Constitutional vires of the said provision, the Honble Delhi High Court in J. K. Cigarettes Ltd.s case (supra), laid down the guidelines under which the statements, previously recorded, could be consideredas relevant.
5.6 We find from the records that statements of five job workers had been recorded under Section 14 of the Central Excise Act, 1944 which were relied upon in arriving at the conclusion that the appellant had not carried out job work in their premises. Besidesrequesting cross-examination of these witnesses, the appellant had also filed affidavits of five persons, in making an attempt, to rebut the allegation of the Department that no job work had been carried out by them in their factory during the relevant period. Also, during the course of hearing before us, the Ld. Advocate for the appellant has referred to a letter dated 16.04.1997 addressed to the Asst. Commissioner of Central Excise informing about the intention of undertaking job work by the appellant.
5.7 The aforesaid arguments advanced on behalf of the appellants, in our opinion, cannot be brushed aside, in considering their plea for cross examination of the witnesses, who had stated before the Department that they were not sending the materials for job work. It cannot be denied that these statements have been recorded by the Department under section 14 of Central Excise act, 1944 behind the back of the appellant and its veracityis under challenge. The correctness or otherwise of these statements would definitely be decisive factor in arriving at the conclusion that the appellant in the guise of job work manufactured and cleared ply wood from their factory. By referring to circumstantial evidences like lack of capacity to manufacture, vehicles mentioned in the job work challans are incapable in carrying the quantity alleged, etc., the appellant, in our opinion, could able to make out a case for cross-examination of these witnesses. Now, the question needs to be answered is whether the adjudicating authority is right in considering the statements as it is without any cross-examination. We find the relevancy of such statements as evidence could be consideredas prescribed at section 9D of Central Excise Act, 1944, which is undoubtedly applicable to the proceeding before Court and also before departmental authority under the Act . The said provision reads as:
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, -
(1) (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 the interests of justice.
(2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court. 5.8 The Honble Delhi High Court in M/s J & K Cigarettes Ltd.s case, while examining the constitutional vires of the said provision observed at para 25 as:
25.?Section 9D of the Act stipulates following five circumstances, already taken note of, under which statements previously recorded can be made relevant. These are :-
(a) when the person who had given the statement is dead;
(b) when he cannot be found;
(c) when he is incapable of giving evidence;
(d) when he is kept out of the way by the adverse party; and
(e) when his presence cannot be obtained without an amount of delay or expense, which the Officer considers unreasonable. 5.9 Their Lordships while upholding the constitutional validity of the said provision summarized their observation as follows:
32.?Thus, we summarize our conclusions as under :-
(i) We are of the opinion that the provisions of Section 9D(2) of the Act are not unconstitutional or ultra vires;
(ii) while invoking Section 9D of the Act, the concerned authority is to form an opinion on the basis of material on record that a particular ground, as stipulated in the said Section, exists and is established;
(iii) such an opinion has to be supported with reasons;
(iv) before arriving at this opinion, the authority would give opportunity to the affected party to make submissions on the available material on the basis of which the authority intends to arrive at the said opinion; and
(v) it is always open to the affected party to challenge the invocation of provisions of Section 9D of the Act in a particular case by filing statutory appeal, which provides for judicial review. 5.10. On a plain reading of the aforesaid observation of the Honble Delhi High Court, it is clear that before considering the statements as relevant evidencesin view of Section 9D of CEA,1944, it is necessary to examine that the conditions laid down therein, are satisfied. Thus, In the light of the aforesaid guidelines, it is now necessary to be tested whetherthe Ld. adjudicating authority in the present case, had examined and arrived at a finding on the existence of any pf the circumstances mentioned at Sec.9D while accepting the said statements as evidence.
5.11 Undisputedly, the names of these persons are always available on the records seized, i.e. on the job-work cash memos/challans issued by the Appellant, for carrying out job work.There is no need to elucidate that these persons had been examined by the department to ascertain whether in fact job work had been undertaken by the Appellant, in their factory, on the raw materials supplied by these persons as job workers. All these departmental witnesses had declined of having sent the core veneer for job work and one of the witness assigning reason stated that if the veneer is transported for around 500 km for job work of drying, then, it would turn black and become waste. Needless to repeat, the case against the Appellant is clandestine manufacture and clearance of 24 mm thickness plywood in the guise of undertaking job work and not for violation of job-work provisions. The departments case is that summons sentto as many as 15 other job workers were returned by the postal authorities as not found leading to the conclusion that the plea of job work advanced by the appellants incorrect. There is no other substantive evidence adduced by the Department so as to establish the case of clandestine removal by the appellant. In these circumstances, were of the opinion that unless the circumstances referred to in paragraph 25 of the aforesaid judgementof the Honble Delhi High Courtexist, it would be incorrect to accept the statements as relevant evidence. From, the records, we do not find that any attempt has been made by the department to produce these witnesses for cross-examination.
5.12 Also, we have noticed that the ld. Adjudicating Authority has neither accepted the affidavits of the defence witnesses nor allowed the examination of the said witnesses sought to be produced by the Appellant to establish their case on the ground that the affidavits filed by the Appellant, were not in order and the same had been filed much later during the de novo proceeding. We do not find merit in the said observation of the Ld. Commissioner. The case was remanded for fresh adjudication on the ground of non-supply of documents and the Appellant had not filed their reply to the demand Notice.Thus, filing the affidavits along with the reply cannot thus be considered as belated action and liable for rejection. On the contrary, we are of the view that the Ld. Adjudicating authority ought to have considered the affidavits and allowed the production of these witnesses by the appellant for examination and in the event Department deems it necessary, could have cross-examined the witnesses.
5.13. In view of our above observations, at this stage, we do not deem it necessary, to delve into other arguments advanced by both sides. In ordinary course, we would have refrained from remanding the case for second time, and decided the case on the basis of evidences available on record, but for the circumstances as mentioned above, we remand the case to the adjudicating authority for deciding the issue afresh after allowing cross-examination of department witnesses and production of defence witnesses by the Appellant. Also, if he considers the statements are relevant without such examination then he should record reasons on the fulfilment of conditions mentioned in Section 9D of the CEA,1944 and as laid down by the Honble Delhi High Court in J.K. Paper Ltd.s case(supra). All issues are open. In the result, the impugned Order is set aside and the Appeals are allowed by remand.
(Pronounced in the open Court on 22.07.2014)
Sd/ Sd/
(DR. I.P.LAL) (DR. D.M.MISRA)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
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2
Ex. Appeal Nos.425-427/06