Customs, Excise and Gold Tribunal - Delhi
R.K. Cigarettes Pvt. Limited, Mr. R.K. ... vs Cce on 23 March, 2007
Equivalent citations: 2007(118)ECC347, 2007ECR347(TRI.-DELHI)
ORDER P.K. Das, Member (J)
1. All these appeals are arising out of common order in appeal and therefore, the same are taken up for hearing together for disposal.
2. The relevant facts of the case are that Appellate No. 1, M/s R.K. Cigarette Private Limited are engaged in the manufacture of cigarette at their factory situated at Varanasi. Appellant No. 2 Shri R.K. Gupta is the Managing Director of the appellant No. 1 company. Shri Niranjan Rai, Proprietor of M/s Prabhat Traders. Appellant No. 3 herein is the C&F agent of appellant No. 1 having its office at Patna. On 22.10.2002, the Central Excise officers searched the premises of appellant No. 3 at Patna and seized cigarette valued at Rs. 4,41,750/-. The representatives of the appellant No. 3 in their statement stated before the Central Excise officer that they used to receive and sell cigarette without bills. Thereafter, the Central Excise officer visited the factory of the appellant company and recorded the statements of various persons. The adjudicating authority confirmed the demand of duty of Rs. 2,95,972/- and imposed penalty equal amount on the appellant No. 1. He has also imposed penalty of Rs. 2 lacs each on appellant No. 2 and 3. In the impugned order, the Commissioner (Appeals) rejected the appeals of the appellants.
3. The learned Advocate on behalf of the appellants fairly concedes that the appellants did not file reply to show cause notice and not availed the opportunity of personal hearing as the matter was pending before the Hon'ble High Court of Allahabad. In this connection, he drew the attention of the bench Order dated 30thJuly 2003 of the Hon'ble High Court. It is revealed from the said order that the Hon'ble High Court directed the respondents to file reply within four weeks. Meanwhile, proceedings may go on, but no final order may be passed. The learned Advocate submits that the appellants were under the impression that the High Court has directed not to pass any final order and, therefore, there is no reason to appear before the adjudicating authority. Hence, he requested to set-aside the impugned order on the ground of violation of principle of natural justice.
4. On merits, the learned Advocate submits that the entire demand of duty is based on the statements of the dealer and the employee of the appellant No. 1 company. The appellant No. 1 company is a manufacture of cigarette, working under the physical control and therefore, he submits that the charge of clandestine removal, burden of proof heavily lies on the Department. He relied upon the decision of the Tribunal in the case of Chhota Lal Keshav Ram v. CCE . He also relied upon the decision of the Tribunal in the case of Hilton Tobacco Limited v. CCE, Hyderabad -I . He submits that the applicants categorically refuted the charge of clandestine removal of goods before the Commissioner (Appeals) and no finding was given by him.
5. The learned authorized representative (DR) submits that the Hon'ble High Court directed that the proceedings may go on and therefore the adjudicating authority rightly passed the order. He further submits that they have filed appeal before the Commissioner (Appeals) and made their submissions and therefore, there is no violation of principle of natural justice. The learned DR on merits submits that the representative of the appellants admitted the clandestine removal of the goods, which are not retracted till date. So the adjudicating authority rightly confirmed the demand of duty and imposed penalty.
6. After hearing both the sides and on perusal of the records, it is seen that the adjudicating authority passed the adjudication order and the appellants filed appeal before the Commissioner (Appeals) against the said adjudicating order and also appeared before the Commissioner (Appeals) in personal hearing. So, in my view, the submission of the learned Advocate that the impugned orders were passed in violation of High Court order, not sustainable. It appears that the impugned orders were passed on the basis of the statements recorded during the investigation. The learned Advocate on behalf of the appellants submits that the appellant No. 1 company is situated at Varanasi and the goods were seized at the premises of the dealer situated at Patna. It is contended by them that the dealer collected the goods from the godown of the appellant No. 1 and not from the factory of the appellant No. 1. It is the contention of the appellants that both the authorities below proceeded on the basis of uncorroborative statement. There is no evidence to establish charge of clandestine removal In the case of Chhota Lal Keshav Ram (supra), the Tribunal held as under:
50. As viewed by the CEGAT in the case - Leather Chemicals and Industries Ltd., Calcutta v. Collector of Central Excise, Calcutta , "if the department alleges clandestine production and removal of goods without due accountal in the statutory records and without payment of duty, the onus of establishing the allegation would lie heavily on the department, in comparison to the situation obtaining under what is known as the self Removal Procedure under which the assessee is, by and large, taken on trust and is expected to maintain statutory records, assess the goods to duty and clear them on gate passes subject to occasional physical checks by the Central Excise staff and scrutiny of assessment on the basis of monthly returns.
7. In this case, the appellant No. 1 company is working under physical control and the clandestine removal cannot alleged merely on the basis of uncorroborative statements. At any event, the appellants did not file reply to show cause notice and failed to avail the opportunity of personal hearing before the adjudicating authority. So, the impugned orders are set-aside and the matter is remanded back to the adjudicating authority to decide the case afresh for de-novo decision. Needless to say, that the adjudicating authority shall give proper opportunity of personal hearing to the appellants. The appeals are allowed of by way of remand.
(Order dictated and pronounced in the open Court)