Custom, Excise & Service Tax Tribunal
Heena Textiles vs Surat-Ii on 21 February, 2019
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
West Zonal Bench AHMEDABAD
COURT NO. I
Appeal No. E/601,788,1064,1065,1240/2009-DB
[Arising out of Order-in-Original No. OIO-02/MP/2009 dated 21.01.2009 passed
by Commissioner of Central Excise & ST, Surat]
Dr Bandana Chandrashekhar Naidu : Appellant
M/s. Heena Textiles
M/s. Premier Polyspin Pvt. Limited
Shri Rohit Kumar Gupta
M/s. Krishna Filaments
vs.
Commissioner of Central Excise & ST, Surat : Respondent
Appearance:
Shri Willingdon Christian and Shri Amal Dave, Advocates for the Appellant
Shri Sameer Chitkara, Additional Commissioner, (AR) for the Respondent
CORAM:
Hon'ble Mr. Ramesh Nair, Member (Judicial)
Hon'ble Mr. Raju, Member (Technical)
Date of Hearing : 23.10.2018
Date of Decision : 21/02/2019
Final Order No. A/10348-10352 / 2019
Per : Ramesh Nair
The issue involved in the present case relates to demand of Central
Excise duty on duty free procured indigenous raw materials (Polyester Yarn
- POY) on the premise that appellant had shown exaggerated production
capacity with intent to procure excess duty free raw materials and had
diverted the same in the open market, without payment of duty.
2
Appeal No. E/601,708,1064,1065,1240/2009-DB
2. Shri Willingdon Christian, Ld. Counsel appeared on behalf of M/s. Premier
Polyspin Pvt. Limited, Shri Rohit Kumar Gupta, M/s. Krishna Filaments and Shri
Amal Dave, Ld. Counsel appeared on behalf of Dr Bandana Chandrashekhar
Naidu. None appeared on behalf of M/s. Heena Textiles
.
3. Shri Willingdon Christian, Ld. Counsel at the outset submits that the order was passed ex-parte. The demand was raised not on the physical movement of the goods but on the basis of theoretical calculations whereby it was concluded that appellant have procured excess raw materials and therefore, consequently might have diverted in the open market. The formula was certified by Chartered Engineer. During the adjudication, the appellant had requested for cross-examination of the Chartered Engineer, M/s. Jai Hanuman Textiles (job worker), M/s. Heena Textiles (job worker) and the Senior Intelligence Officer DGCEI. He submits that without response to the appellant's letter dated 17.06.2008 for cross-examination, the appellant was directed to appear for personal hearing on 23.06.2008 vide letter dated 23.05.2008. The appellant once again requested for adjournment as well as for allowing the cross-examination vide letter dated 21.06.2008 and further reminded for cross-examination vide letter dated 21.08.2008. However, ex-parte order came to be passed on the premise that the appellants were served with subsequent notices for personal hearings on 25.07.2008 and 18.12.2008. He submits that these letters were not received by the appellant. In this position, the entire order passed ex- 3
Appeal No. E/601,708,1064,1065,1240/2009-DB parte is in violation of principles of natural justice. He further submits that the demand is for the period beyond five years which is not permissible in the law. He placed reliance on the following judgments:-
(a) UP State Cement Corporation Limited vs. UOI - 1996 (86) ELT 6 (All) [1999 (112) ELT A44 (SC)]
(b) CC vs. TVS Whirlpool Limited - 1996 (86) ELT 144 (Tri.) [2000 (119) ELT A177 (SC)
(c) CCE vs. Doaba Co-operative Sugar Mills - 1988 (37) ELT 478 (SC)
(d) Yashwant SSK Limited vs. CCE - 1990 (49) ELT 534 (Tri.) He further submits that time limit for issue of show cause notice will be admissible for the reason that appellant had already obtained permission for de-bonding from EOU and in this regard, he placed reliance on the following decisions:-
(a) CCE vs. Emcure Pharmaceuticals Limited - 2014 (307) ELT 180 (Tri.)
(b) Sterlite Optical Technologies Limited vs. CCE - 2011 (270) ELT 266 (Tri.)
(c) Dharampal Lalchand Chug vs. CCE - 2015 (323) ELT 753 (Bom.)
(d) Meghmani Dyes & Intermediates Limited - 2013 (288) ELT 514 (Guj).
He also pointed out that there is error in the calculation of duty demand. He submits that except for the theoretical calculation on the basis 4 Appeal No. E/601,708,1064,1065,1240/2009-DB of formula, there is no evidence to allege the diversion of the raw materials. He placed reliance on the following judgments:-
(a) Fairfield Atlas Limited vs. CCE - 2009 (241) ELT 49 (Tri.)
(b) CCE vs. J.S. Gupta & Sons - 2015 (318) ELT 63 (All.)
4. Shri Amal Dave, Ld. Counsel appearing on behalf of Dr. Bandana Chandrashekhar Naidu, Chartered Engineer has given detailed written submission. He relied on the following judgments:-
(a) RM Kothari & Company vs. CC - 2002 (150) ELT 378 (Tri. Mumbai)
(b) S.N. Garg vs. CCE, Allahabad - 2013 (292) ELT 93 (Tri. Del.)
5. On the other hand, Shri Sameer Chitkara, Ld. Additional Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order.
6. We have considered the submissions made by both the sides and perused the record. We find that the order was passed ex-parte and no hearing was conducted. The repeated request of the appellant for cross-
examination of witnesses whose statements were recorded, was not geven any heed. The entire case was passed on theoretical calculation made on the basis of a formula certified by the Chartered Engineer and some statements of job workers. In these facts, it was necessary on the part of the Adjudicating Authority to provide cross-examination of the witnesses 5 Appeal No. E/601,708,1064,1065,1240/2009-DB and it is mandatory under Section 9D of the Central Excise Act, 1944. Therefore, the impugned order passed without allowing the cross- examination and without conducting effective personal hearing is in gross violation of principles of natural justice. Therefore, the impugned order cannot be sustained.
7. We therefore, set-aside the impugned order and remand the matter to the Adjudicating Authority for passing a fresh order after conducting examination/ cross-examination of the witnesses, allowing the appellant to file their defense reply and granting sufficient personal hearing. Since this matter is of 2009, the Adjudicating Authority shall pass the de-novo order within a period of four months from the date of this order.
Appeals are allowed by way of remand to the Adjudicating Authority.
(Order pronounced in the open court on 21/02/2019) Raju Ramesh Nair Member (Technical) Member (Judicial) KL