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Issues: (i) Whether the evidence on record established clandestine removal of processed man-made fabrics without payment of central excise duty. (ii) Whether denial of cross-examination of panch witnesses and certain other persons vitiated the adjudication for breach of natural justice.
Issue (i): Whether the evidence on record established clandestine removal of processed man-made fabrics without payment of central excise duty.
Analysis: The record contained admissions by the directors regarding shortages and illicit clearances, seizure of incriminating documents such as job cards, kachcha delivery challans and computer print-outs from connected premises, corroborative statements of the brother-director, and statements of merchant-manufacturers showing receipt of fabrics without excise invoices against cash payment. The retraction of earlier admissions was found unavailing in view of the consistent later statement and the surrounding documentary corroboration. The evidence was held sufficient even though direct evidence of raw material procurement, electricity consumption, or bank transactions was not available, since the mode of clandestine removal itself explained the absence of regular records.
Conclusion: The allegation of clandestine removal was proved against the appellant and the duty demand was upheld.
Issue (ii): Whether denial of cross-examination of panch witnesses and certain other persons vitiated the adjudication for breach of natural justice.
Analysis: The request for cross-examination was rejected because the panchnama had not been disputed, the recovery of documents was not dependent on the disputed oral statements, and the material relied upon consisted principally of seized documents and admissions by the appellant's own directors and related persons. The refusal to permit cross-examination was therefore not found to have caused prejudice warranting interference.
Conclusion: No violation of natural justice was made out on this ground.
Final Conclusion: The Tribunal found no reason to interfere with the order confirming duty and penalty, and the appeals failed.
Ratio Decidendi: Clandestine removal may be proved by a cumulative body of admissions, seized incriminating records, and corroborative statements, and a cross-examination request may be refused where the impugned material is independently supported and no prejudice is shown.
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