Customs, Excise and Gold Tribunal - Mumbai
Star Industries Ltd. vs Commissioner Of Central Excise & ... on 18 April, 2001
Equivalent citations: 2001(78)ECC218
ORDER
Gowri Shankar, Member (Technical)
1. For reasons that will be apparent, the appeal is taken up for disposal, at the request of the counsel for the appellant and with the concurrence of the departmental representative, after waiving deposit.
2. Star Industries, the appellant before us, has two factories one at Thane and another at Daman. It manufactured at Thane plain unprinted poly vinyl chloride sheets. It cleared major quantity on payment of duty at Daman for printing, cutting, embossing and other process. It sends the remaining part of the production without payment of duty under rule 57F(3) again to Daman for the same purposes.
3. Investigations by the department in 1996 led to the recovery of some documents from the premises of the appellant and also from Om Prakash Saraogi, who, it is stated was connected with the chartered accountant who audited the accounts of the appellant. The department concluded these document that appellant had received from its buyers consideration over and above the price paid by them for the printed sheets. Notice was issued on 13.12.96 proposing to enhance the value of the sheets by taking into account the additional consideration and consequently demanding duty and proposing penalty. The Commissioner at Mumbai adjudicated the notice. By his order passed on 4.12.98 he held that the show cause notice was lacking jurisdiction since the printed sheets had been manufactured at Daman and not a Thane. He therefore vacated the proceedings and ordered transfer of the papers to the Commissioner, Surat having jurisdiction over the factory at Daman.
4. The Commissioner at Surat issued another notice dated 12.1.99 was issued, this time to Star Industries at Daman. This notice repeated the same allegation as in the earlier notice proposing recovery of duty of Rs. 5.2 crores and proposing penalties. The notice is limited to the goods cleared on payment of duty from Thane and subsequently processed at Daman. The appellant before us filed what it called as interim reply on 21.2.00. In this reply it submitted that it was until now under the erroneous impression that printing and embossing amounted to manufacture and that in terms of a judgement of the Supreme Court, printing was not manufacture. No duty was therefore payable by the factory at Daman. It asked for cross examination of persons whose statements were relied upon, the witnesses to the panchnamas recorded at the time of seizure of the documents and of the Central Excise officers, who conducted the raid and investigation. It referred to a reply filed by Thane factory on 7.9.98 before the Commissioner to adjudicate upon the earlier notice and contended that in the reply "the inherently unreliable and unbelievable nature of the statement relied upon in the notice had been demonstrated," to justify the request for cross examination. The reply concluded by saying that it claimed to make further submission after cross examination of the persons.
5. It is the contention of the counsel for the appellant that the Commissioner did not reply to the request of cross examination and has wrongly treated the interim reply as a final reply. He has not considered the submission that the process does not amount to manufacture . Therefore he says the order had been passed in contravention of the principles of natural justice and cannot be maintained. He therefore seeks remand of the matter. The departmental representative does not oppose the remand.
6. When a specific request has been made for cross examination and there was a clear indication in the reply that further submission would be made after the cross examination it was incumbent upon the adjudicating authority if he chose not to give any further option to advise the person concerned. He was also required to clearly intimate whether he proposed or not proposed to accede to the request for cross examination. We note that the request for cross examination has been made indiscriminately. Counsel for the appellant now says that he will be satisfied with cross examination of K. Mathew, Rohit Amin, Jimmy Bariya, Om Prakash Saraogi, the officers who are stated to have recovered the document from Saraogi and witness to such recovery. Further the Commissioner has also not dealt with the contention raised before him that printing does not amount to manufacture.
7. We therefore allow this appeal and set aside the Commissioner's order. mr. Nankani says he will within 30 days of the receipt of this order, address a letter to the Commissioner offering his justification for cross examination of various persons. On receipt of this letter the Commissioner shall decide which person if any, he choose to make available for cross examination in accordance with the law on this subject, and intimate the appellant or its counsel. Thereafter he shall give the appellant an opportunity of being heard and pass orders in accordance with law.