Customs, Excise and Gold Tribunal - Mumbai
Banco Aluminium Ltd. vs Commissioner Of Central Excise on 13 August, 2004
Equivalent citations: 2005(181)ELT110(TRI-MUMBAI)
ORDER S.S. Sekhon, Member (T)
1. This is the second round of these appeals in the Tribunal. The matter was earlier remanded to the Commissioner of Central Excise vide order No. 2650-59/97/WRB, dated 17-6-1997 [1998 (99) E.L.T. 186 (T)] with the following directions -
"On consideration of the submissions made by both the sides, we are inclined to hold that in the facts and circumstances of the case, it would be more appropriate to remand the matter to the adjudicating authority for denovo adjudication. This is because we find substance in the plea that in respect of the appellants M/s. Banco Aluminium Ltd. an effective hearing and the facility of cross-examination of witnesses which though was extended to them had not in fact taken place. Such cross-examination, we find, is essential for establishing cases against this appellants and their employees beyond doubt. It is true that more than one opportunity of hearing had been offered to the appellants but as it happened it would appear from the record that the ultimate date of hearing prior to the adjudication was in Nov., 1996. On that date, the ld, counsel appearing for M/s Banco Aluminium in his own personal court case was away from Vadodara. Therefore, it may be in the interest of justice to allow the facility of cross examining the witnesses to this appellants and for this purpose the case is remanded to the Commissioner of Central Excise, Vadodara considering the fact that the cross examination was, in fact, promised to them during the personal hearing. The Ld. D.R. pointed out that there may be difficulty for the Commissioner to ensure presence of witness to be cross-examined after such a lapse of time since the events in the case has been in the year 1992. Having regard to this submission, we direct that the appellants should co-operate in the culmination of the de novo adjudication within the reasonable time. The witnesses will have to be summoned by the department and if their presence cannot be ensured because of the practical difficulties, the appellants may be intimated of it and in such circumstances, the appellants should come forward and make their submissions before the Commissioner personally for cross-examining the witnesses whose presence is made available to them. If the appellants did not respond within the reasonable time the Commissioner is at liberty to proceed in the de novo consideration."
(underlining supplied)
2. The Ld Commissioner, vide the order impugned, now, before us, has found and concluded -
...........recorded under force or duress or that the facts stated by him in his statement are not true. Hence his statement is an admissible piece of evidence. So far as the two officers Shri Brahmbhatt and K.N. Jadav are concerned, their statement was not recorded any time. Hence, the necessity of their cross-examination did not arise. Unless it is alleged that there was any sort of misconduct by the officers in recording the statement, the cross-examination of the officers would not hold any meaning. The learned advocate could not advance any argument before me why was cross-examination of these two officers required or what purpose would it serve to advance the ends of justice. The request for their cross-examination seems to be wholly without any justification.
9. Shri Ravindra Kumar Jain did not present himself for the cross-examination. The noticees have not indicate in their reply which part of his statement they wished to challenge. Therefore, a bald claim, that the statement of these persons should not be considered, is arbitrary and does not have any substance and will not provide any reprieve to M/s. Banco Aluminium Ltd. If they have any grievance against the statement of Shri Ravindra Kumar Jain they should at least clearly state it. In the absence of any such challenge the statement recorded under Section 14 of the C.E. Act is an admissible evidence and cannot be arbitrarily discarded merely because he did not present himself for cross-examination. It is also essential to keep in mind that these proceedings are not judicial; they are only quasi judicial in nature and are free from the procedural and technical requirements of the evidence Act. So long as principles of natural Justice are complied with and legal requirements substantively complied with, the proceedings will not be vitiated merely on account of some technical or procedural aspect. The substantive requirements have been complied with in this case when statements were recorded under Section 14 of the C.E. Act. The said statements have not been retracted. There is no allegation of any coercion or threat. There is no allegation that the facts stated in the statement are not voluntary or true. There is no challenge to the statement on merits or substance. Merely alleging that the statement must be discarded because the person did not turn up for cross-examination in spite of summons without making out a case on merits for discarding the statement is going beyond the scope of the quasi judicial proceedings. The statement of Shri Ravindra Kumar Jain is thus a valid piece of evidence and cannot be discarded.
The noticee himself has accepted that a statement recorded under Section 14 can be admitted as evidence. Immediately after having stated this in their reply dated 31-03-1998, they have gone ahead to state that the same has to be proved by the department. When there is no challenge to the statement on merits the stand of the notice is self contradictory.
10. The cross-examination of (i) Shri Ravindra Kumar Jain, Proprietor of M/s. Siddharth Metals Products; (ii) Shri Dinesh Chandra Gupta, Accountant, Sales Officer, M/s. Indian Aluminium Co. Ltd., New Delhi; (iii) Shri Narendra Kumar Jain, Partner of M/s. Jain Metals and (iv) Shri Vijay Kumar Gupta, Manager, M/s. Ram Swaroop Vijay Kumar was requested for and agreed to at the time of the next personal hearing. All the above witnesses were summoned. All of them except Shri Ravindra Kumar Jain, appeared and were cross-examined by learned advocate.
11. I have gone through the record of cross-examination carried out by the learned advocate and find nothing in the same which can merit any change in the previous order passed by my learned predecessor.
The supplier had produced invoice which showed different quantities than these shown in the gatepasses. This is sufficient to prove that M/s. Banco Aluminium were aware of the difference in quantity shown in the gatepasses and that actually despatched by the supplier and received by them. There has been no explanation before me of this significant aspect.
12. The difficulties regarding cross-examination had been placed before the Hon'ble Tribunal who had taken them into consideration and made suitable observations in their order dated 17-06-97. It has been recorded on the last page of the order that the Departmental Representative had pointed out the difficulties in ensuring presence of witnesses for cross-examination after such a lapse of time, as the case pertains to the year 1992. Having regard to this submission, the Hon'ble Tribunal had directed the appellants to co-operate in the culmination of the denovo adjudication within the reasonable time. The witnesses will have to be summoned by the department and if their presence cannot be ensured because of practical difficulties, the appellants may be intimated of it and in such circumstances, the appellants should come forward and make their submissions before the Commissioner personally for cross-examining the witnesses whose presence is made available to them. If the appellants do not respond within the reasonable time, the Commissioner is at liberty to proceed in the denovo consideration. These facts are to the knowledge of M/s. Banco Aluminium Ltd. They are also aware of the difficulties faced in bringing the witnesses for cross-examination after such a lapse of time. They are also aware that the department has taken all steps possible by way of issue of summons etc. to ensure presence of the witnesses. In spite of all the efforts made, it has not been possible to ensure the presence of Shri Ravindra Nath Jain, proprietor of M/s. Siddharth Metal Works. All these facts were intimated to the learned Advocate who remained present for the hearings from time to time.
13. The fact that Shri Ravindra Nath Jain did not remain present does not mean that his testimony has to be discarded as being not admissible as evidence. As indicated earlier, it has to be remembered that these proceedings are not judicial proceedings having procedural trapping of the Evidence Act. What is essential is with compliance of principles of natural justice. In such proceedings, it is also not mandatory that the case in to be proved to the hilt beyond any doubt as is the case in criminal proceedings. In quasi judicial proceedings of this kind, it will be sufficient if the evidence indicates that preponderance of possibility was for the irregularity committed by the noticee. From this angle it is relevant to note Shri R.N. Jain had admitted in his statement that to make good their loss because of the lower sale rate as compared to the rate given in the central excise gatepasses, they used to supply lesser quantity of aluminium sheets/coils to M/s. Banco Aluminium Ltd. than the quantity mentioned in the accompanying C. Ex. gatepasses. This statement is supported by documentary evidence, viz. that the invoices relating to majority of the consignments indicate that the material supplied by M/s. Siddharth Metal Works to M/s. Banco Aluminium Ltd. was at much lower rate than the rate given in the corresponding C. Ex, gatepasses. This fact was not a matter of dispute before me. It is, therefore, an admitted and established fact that M/s. Siddharth Metal Works as also others supplied the material to M/s. Banco Aluminium Ltd. at much lower prices than the prices at which they had purchased, as reflected in the gate-passes of the supplier. No trader would like to supply material incurring heavy losses. Therefore, the statement given by Shri R.N. Jain, Proprietor of M/s. Siddharth Metal Works sounds convincing that to overcome his loss, he was despatching lesser quantity to M/s. Banco Aluminium Ltd. It is also essential to keep in mind that this is a statement recorded under Section 14 of the Central Excise Act. The statement has not been retracted. The learned Advocate never even once indicated that the statement has been recorded under duress or coercion or that the facts stated therein are contrary to truth. In these circumstances, I see no ground to discard the statement, particularly when it is supported by documentary evidence. In the face of the documentary evidence and the statement, it will be futile to argue that this is not a piece of evidence and should be discarded only because Shri R.N. Jain did not appear for cross-examination. The statement of Shri R.N. Jain is corroborated in material aspect by the documentary and substantial evidence.
14. The sale invoices for aluminium sheets/coils issued by M/s. Ramswaroop Vijaykumar, Delhi, showed that they had sold 10 consignments to M/s. Siddharth Metal Works at almost the same rate at which they had purchased them from M/s. Bharat Aluminium Co. Ltd. However, the invoices issued by M/s. Siddharth Metal Works, Delhi, showed that later on they sold all those 10 consignments to M/s. Banco Aluminium Ltd. at much lower rates than the rates at which they had purchased the same from M/s. Ramswaroop Vijaykumar. The same is the pattern regarding the sale of material by M/s. Jain Metals, Delhi to M/s. Siddharth Metal Works, who in turn, supplied the material to M/s. Banco Aluminium Ltd. M/s. Banco Aluminium Ltd. showed receipt of aluninium sheets/coils on the basis of Central Excise gatepasses/invoices received by them and not the actual quantity of aluminium sheets/coils received by them. This fact had been clearly admitted by Shri Arvindbhai Jhadvji Shimpi, Excise Clerk of M/s. Banco Aluminium Ltd., who maintains the Central Excise records. He had admitted that M/s. Banco Aluminium Ltd. showed higher receipt of aluminium sheet/coils in their RG-23-A Part-I account and accordingly utilised excess Modvat credit, and that M/s. Banco Aluminium Ltd. had not been showing receipt of the correct quantity. He had further stated that even in their private records, they had not shown the correct quantity received. The statement has not been retracted nor alleged to recorded on the basis of any coercion or threat etc. Even at the time of personal hearing before me, it was never the allegation that these statements are not correct. Therefore, I see no reason to discard this allegation and believe simply the word of M/s. Banco Aluminium Ltd. at this belated stage that the quantities received by them were correctly reflected. It cannot be the case that their own Excise Clerk Shri Shimpi was in collusion with the supplier of the material Shri R.N. Jain and that both of them were telling lies. There is no insinuation allegation or even a hint from M/s. Banco Aluminium Ltd. to this effect.
15. The evidence before me including the arguments made by the learned Advocate do not in any manner justify my deviation from the order passed by my learned predecessor. After careful consideration of the evidence, sequence of events and the submissions made before me, I consider that the evidence is strong enough to justify taking a view that the quantities of aluminium sheets/coils received by M/s. Banco Aluminium Ltd. were in fact less than what was reflected in the gatepasses invoices. Thus, M/s. Banco Aluminium Ltd. in collusion with the suppliers like M/s. Siddharth Metal Works, M/s. Ganpathi Metal Works and M/s. Jain Metals, were availing higher Modvat credit, thereby cheating the Central Excise Department and depriving it of its legitimate revenue. These facts have rendered the goods liable for confiscation, the excess Modvat credit availed to be recovered and the noticees liable for penal action.
3. Since the Tribunal has found that -
".....This is because we find sub.....in the plea that in respect of the appellants M/s Banco Aluminium Ltd. an effective hearing and the facility of cross-examination of.......which thereafter was extended to them had not in fact take place. Such..................we find, is essential for establishing cases against this appellant and their employees beyond doubt...."
Therefore, the findings of the Commissioner to the effect -
"....Since it was considered that Cross-examination of Shri A.J. Shimpi, Excise Officer of M/s. Banco Aluminium Ltd., and two officers who investigated the case viz. Shri N.M. Brahmbhatt and Shri K.N. Jadav, will not jeopardise in any manner the defence of the notice, they were not called for cross-examination..."
is a finding, which smacks of non-compliance with the order of Remand. An order not conforming to an order in Remand, as in this case, when the Bench of this Tribunal is concluding the need of cross-examination by use of the term. ".....Such cross-examination we find is essential for establishing case against the appellant and their employees beyond doubt...." then the non-compliance thereof by not offering the officers for cross-examination before the adjudicator cannot lead to any other conclusion than a "failure to establish the case against the appellants". We conclude the same.
4. There were others who were summoned but they did not appear. No material exist of action taken against such persons so summoned, but who did not comply the same. Action by filling suitable complaints in the Magistrates count for non-compliance of a summon was required to be taken. The absence of such material and action, only indicates, the nature of a desire on part of the department i.e. not to comply with the direction of the Tribunal to establish the case beyond doubt'.
5. Perusal of the order, extracted herein in extensio also indicates that the adjudicator has not applied his own mind but appears to be led by the decision arrived at by the earlier adjudicators. There is an underlying current to somehow confirm the liabilities. Such approach cannot be upheld.
6. Since Tribunal orders in Remand are not been complied with and there appears to be no desire to do so, no purpose will be served, now, once again in remanding the matter back to the adjudicator. We would, reluctantly have to conclude that the cases have not been established against the appellants. The orders against them has to be set aside and the appeal allowed.
7. Ordered accordingly.