Custom, Excise & Service Tax Tribunal
M/S. The Empire Safe Co vs Commissioner Of Central Excise on 16 October, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. II
Excise Appeal No. 1318 of 2009
[Arising out of Order-in-Original No 29/2008 dated 29.12.2008 passed by the Commissioner of Central Excise, New Delhi]
For approval and signature:
Hon'ble Shri Ashok Jindal, Member (Judicial)
Hon'ble Shri B. Ravichandran, Member (Technical)
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 Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s. The Empire Safe Co. Appellants
Vs.
Commissioner of Central Excise Respondent
Delhi Appearance:
Shri K K Anand, Advocate for the Appellants Shri Govind Dixit, DR for the Respondent CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial) Hon'ble Mr. B Ravichandran, Member (Technical) Date of Hearing /decision: 16.10.2015 FINAL ORDER NO. 53475 /2015-EX(DB) Per Ashok Jindal:
The appellant is in appeal against the impugned order demanding duty along with interest and imposing penalty thereon.
2. This is a second round of litigation. In earlier round of litigation this Tribunal, remanded the matter back to the adjudicating authority vide order dated 23.6.92 with the following observations:
7. We have carefully considered the submissions made by both the parties and have perused the records and have carefully gone through the impugned order passed by the Principal Collector. The appellants have made out a serious grievance of the gross violation of principles of natural justice in as much as the statement of Smt. Jagbinder Kaur Bhatia having been fully relied by the learned Principal Collector, had not been furnished to them to make their effective reply. They have also complained that the Investigating officer having been produced for cross examination on the first day, was not again produced for cross examination on the first day, was not again produced and it had been so noted by the learned Principal Collector in his order. They further complain that the reasoning given by the Principal Collector on denial of Cross examining. Sh. Dayachand is not sustainable in law. These submissions made by the learned advocate are well founded and have to be upheld. We have extracted in detail the content of the show cause notice and also the reply made by the appellants. In this particular case, there is no allegation made in the show cause notice pertaining to the unit owned by Smt. Jagbinder Kaur Bhatia, and that of appellants unit being one and the same and there is commonality of interest. In a circumstances like this the learned Collector proceeding to adjudicate on this issue and deciding that they are one and the same is not sustainable. The main reliance in the impugned order is on the statement of Smt Jagbinder Kaur Bhatia and the same having not been furnished to the appellant, the impugned order would suffer from infirmity. The second difficulty in the order is the non-consideration of the defence raised by the appellants.
8. We have perused the judgement of the Supreme Court in the case of State of Kerala vs. K T Shaduli (AIR 1977 SC 1627), in paragraph three of which the Court held as under
3. This rule which requires an opportujnity to be heard to be given to a person likely to be affected by a decision is also, like the genus of which it is species, not an inflexible rule having a fixed connotation. It has variable content depending upon the nature of the enquiry, the framework of the law under which it is held, the constitution of the authority holding the inquiry, the nature and character of the rights affected and the consequences flowing from the decision partem requires that a particular specified procedure to be followed. It may be that in a given case the rule of audi alterm partem may import a requirement that witnesses whose statements are sought to be relied upon by the authority holding the inquiry should be permitted to be cross examined by the party affected while in some other case it may not. The procedure to be adopted for giving an opportunity to a person must necessarily depend on facts and circumstances of each case. The question of cross-examination will, therefore, have to be considered in the light of the law laid down by the Supreme Court in the case cited by the learned Counsel for the appellant. The fact that a statement is recorded under section 14 of the Central Excise and Salt Act, 1944 and, therefore, there is no need to permit cross-examination, is an assertion not supported by any legal authority. The adjudicating authority would have to consider the question of cross-examination in the light of the law laid down in Shadulis case (supra), If the adjudicating authority considers that it is not necessary to permit cross-examination, he is required to record reasons for not permitting cross-examination. In this particular case, the statement of Shri Dayachand recorded under Section 14 of the Central Excise and Salt Act, 1944 has been used against the appellant. Therefore, it follows that the statement of Shri Dayachand is incriminating in nature in so far as the appellants are concerned. They have a right to cross examine Shri Dayachand to disprove its veracity. Therefore, to completely rely on the statement of Shri Dayachand without its verification by cross-examination would be violative of principles of natural justice. The grievances of the appellants of denial of principles of natural justice has to be upheld. In these circumstances, we set aside the impugned order and refer the matter back to the adjudicating authority for fresh adjudication. The authorities shall furnish a copy of the statement of Smt. Jagbinder Kaur Bhatia and shall consider the request for cross examination of the others in the light of our observations above. The authorities will be at liberty also to issue such clarification to the show cause notice on the basis of the available material as they may consider necessary and, in that case, the appellants would be given an opportunity to make a representation, to produce evidence and be also heard. Thus the appeal is allowed by remand.
3. The facts in brief are that M/s The Empire Safe Co. is owned by Shri Bhupinder Singh Bhatia and the clearance of M/s. Empire Safe Co. owned by Smt. Jagbinder Kaur Bhatia wife of Shri Bhupinder Singh Bhatia should be clubbed for the purpose of demanding duty. In earlier round of litigation, appeals by them have been disposed of by the Tribunal vide orders dated 23.6.92 and 23.11.94 remanding the matter to the adjudicating authority for fresh decision with specific direction that cross examination of one Shri Dayachand, employee of The Empire Safe Co. should be allowed and that a copy of the statement of Smt. Jagbinder Kaur Bhatia should be made available. Both these directions could not be met by the Commissioner who has passed by the impugned order dated 29.12.2008, nearly after 14 years after the remand order dated 23.11.1994. The reason for not allowing cross-examination of Shri Dayachand is that the Empire Safe Co. is closed and the said Shri Dayachand has left the station and his whereabouts were not known to the Department as well as to the appellants. Copy of statement of Smt. Jagbinder Kaur Bhatia could not be made available as all the documents in original with the Department were reportedly lost due to natural fury and the circumstances beyond the control of the adjudicating authority or as human beings as such. When exactly the documents were lost by the Department is not forthcoming from the records. The relied upon documents which were handed over to the appellant at the time of issue of show cause notice were also reportedly lost due to change of the Advocate. Commissioner specifically records that no original relied upon documents were available while he was deciding the case.
4. Learned advocate appeared on behalf of the appellant and submits that specific direction of the Tribunal has not been complied with wherein the Revenue was directed to supply a copy of the statement recorded during the course of investigation of Smt. Jagbinder Kaur Bhatia and cross examination of Shri Dayachand which has not been complied with. Moreover, all the records relating the case in hand, have been lost by the adjudicating authority and the documents are not available. Therefore, impugned order has been passed only on assumption and presumption and same is not sustainable in the eyes of law. Therefore, impugned order is to be set aside.
5. On the other hand, learned AR strongly opposed the contention of the learned Counsel and submits that learned Counsel Shri K K Anand, advocate for the appellant in various communication indicated particularly in his letter dated 28.09.2005 intimated that all the papers of the case were lying with the earlier counsel Shri Harbans Singh and his client did not succeed to get the same. Therefore, direction of this Tribunal given to them vide order dated 23.6.92 and 23.11.94 has been complied with and impugned order has been passed on the basis of available records. To that effect, the learned Joint Commissioner of Central Excise, Delhi I has also filed an affidavit. He further submits that as appellant did not co-operated with the adjudicating authority for adjudication of the case in denovo proceedings, therefore, at this stage, appellant has no right to get statement of Smt. Jagbinder Kaur Bhatia which is already with the earlier counsel of the appellant Shri Harbans Singh, advocate.
6. On 16.10.2015, when the arguments were concluded, the learned AR sought time to file written submissions. The request of the learned Counsel was considered and a time of 7 days was granted to the learned AR to file his written submissions apart from oral submissions. During the course of arguments it is made clear that submissions be made within seven days otherwise the same shall not be taken up on record and order be passed on the basis of oral arguments advanced by learned AR. Despite this clear cut direction, till 18.11.2015, no written submission have been filed by the learned AR. Therefore matter is being proceeded for disposal.
7. Heard the parties. Considered the submissions.
8. In this case, we have gone through the impugned order wherein the adjudicating authority himself has framed the following issues:
8. I have carefully gone through the written and oral submissions made by the party and I have examined the case records. From the allegations contained in the show cause notice vis-`-vis reply submitted by the party, the following points need to be considered:
(i) Whether the case can be decided at this stage, when no relied upon documents are available and all the original documents are lost due to natural fury and circumstances beyond the control of adjudicating authority or human beings as such.
(ii) Whether M/s. Empire Safe Co. and M/s. The Empire Safe Co. are two legal and separate entity. If they are single entity as alleged in the Show Cause Notice, whether the excisable goods (steel furniture) have been manufactured by them.
(iii) Whether the statement of Smt. Jagbinder Kaur which was not relied upon in the Show Cause Notice but relied upon by the learned Principal Collector, while passing the order in original No. 35/89 dated 27.7.89, should be handed over to the party.
(iv) To produce Shri Daya Chand, Supervisor for cross-examination.
9. Thereafter the adjudicating authority has passed the impugned order. We further observe that the learned AR strongly contended during the course of argument that as per letter dated 28.9.05, a communication by the present counsel of the appellant with the department intimating that all the papers of case were lying with earlier counsel late Shri Harbans Singh and his client did not succeed to get the same. From this, the learned AR drew the conclusion from the said letter that statement of Smt. Jagbinder Kaur Bhatia in compliance with the order of this Tribunal dated 23.6.1992 has been communicated to the appellant. This stand of the learned AR is contrary to the records as Misc. application No. 52/07 filed by the Revenue before this Tribunal wherein it is stated that, since the document ordered to be supplied by the Honble Tribunal while remanding the case can not be supplied to the party in the circumstances narrated above, the directions contained in the subject order of the Honble Tribunal cannot be complied with and consequently de-novo proceedings also can not be completed. The said application was disposed of by this Tribunal vide order No. 757/2007 Ex dated 14.8.2007 wherein this Tribunal has passed the following order:-
Revenue filed this Misc. application with the request to waive the condition of supply of documents and permitted de novo proceedings without said documents. We find that the matter was remanded to the adjudicating authority to decide afresh in view of the observations made in the Final Order. We find that the matter was remanded in the year 1992 and matter is still pending with the adjudicating authority. The adjudicating authority bound to decide in accordance with law, therefore, no such direction as requested in application is required. In view of this, the application is dismissed. As observed above, the stand taken by the learned AR is not acceptable as Revenue itself is admitting in 2007 while moving the application before this Tribunal that the directions of this Tribunal vide order dated 23.6.92 has not been complied with. Therefore, unless and until those directions have been complied with, the adjudication order cannot be passed. We have also perused the impugned order in detail and in the impugned order, the adjudicating authority has not given any independent finding to arrive at the conclusion but merely copied the finding of the earlier adjudication order and hold that clearance of both units can be clubbed and duty can be demanded accordingly, which is not permissible in law as the adjudicating authority was not having any documents to rely or examine the other documents. We further find that in this case, the matter was remanded back to the adjudicating authority for de novo adjudication on 23.6.92 and till December, 2008, the adjudication order could not be passed. Such a delay of the adjudicating authority in passing / complying with the direction of / not following the direction of this Tribunal of 1992 lends the appellant to succeed in default itself.
In these circumstances, as revenue has failed to comply with the direction of this Tribunal dated 23.6.92, the impugned order is not sustainable in the eyes of law, therefore, same is set aside and appeal is allowed with consequential relief (if any).
( operative part of the order pronounced in the open court )
( Ashok Jindal ) Member(Judicial)
( B Ravichandran )
Member(Technical)
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