Appeal dismissed for non-compliance with Central Excise Act. Lack of evidence led to ruling in favor of respondent.

The appeal was deemed non-maintainable due to lack of compliance with Section 35B of the Central Excise Act 1944. The jurisdiction of the Additional Director General of DGCEI to issue the show cause notice was found lacking. The authority of the adjudicating officer was contested and deemed unsustainable. The retracted statement of Shri Purushottam Kumar Gupta was considered inadmissible. The reliability of loose slips as evidence was questioned. As the charge of clandestine removal was not proven, no penalty was imposed. The judgment ruled in favor of the respondent on all issues, dismissing the appeal filed by the Revenue.

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Issues Involved:
1. Maintainability of the appeal under section 35(b)(2) of the Central Excise Act 1944.
2. Jurisdiction of the Additional Director General of DGCEI to issue the show cause notice.
3. Authority of the adjudicating officer to adjudicate the matter.
4. Admissibility of the retracted statement of Shri Purushottam Kumar Gupta as evidence.
5. Reliability of the loose slips recovered from Dharamkanta to allege clandestine removal of goods.
6. Imposition of penalty on Shri Purushottam Kumar Gupta.

Detailed Analysis:

Issue No. 1: Maintainability of the Appeal
The respondent's counsel objected to the appeal's maintainability, arguing that the authorization for the appeal did not comply with Section 35B of the Central Excise Act 1944. The review order lacked details of any meeting between members of the Committee of Commissioners and was undated. The Delhi High Court's decision in Kundalia Industries was cited, emphasizing the need for a meaningful consideration by the Committee of Commissioners, which was absent in this case. Therefore, the appeal was deemed non-maintainable.

Issue No. 2: Jurisdiction of the Additional Director General of DGCEI
The respondent argued that the Additional Director General of DGCEI lacked jurisdiction to issue the show cause notice dated 08.05.2001, as the relevant notification (No. 38/2001-CE(NT)) became effective only on 01.07.2001. The Commissioner (A) correctly held that the Additional Director General did not have jurisdiction at the time of issuing the notice, thus ruling in favor of the respondent.

Issue No. 3: Authority of the Adjudicating Officer
The respondent contested the authority of Shri Rajiv Aggarwal, who adjudicated the matter as Joint Commissioner without a Gazette notification confirming his appointment. The requirement for a Gazette notification for Gazetted appointments was not met, rendering the adjudication order unsustainable. The Commissioner (A) upheld this objection, ruling in favor of the respondent.

Issue No. 4: Admissibility of the Retracted Statement
Shri Purushottam Kumar Gupta retracted his statements made during the investigation, claiming they were obtained under duress. The Commissioner (A) acknowledged the retraction letters and found them admissible, concluding that the original statements were not credible evidence. This issue was resolved in favor of the respondent.

Issue No. 5: Reliability of Loose Slips
The loose slips recovered from Dharamkanta, which formed the basis for the demand, were not corroborated by the panch witnesses. The panch witnesses could not confirm the seizure of these slips from the factory, and the slips were not identified by the alleged scribe, Shri Nepal Singh. The absence of concrete evidence led to the conclusion that the slips could not substantiate the charge of clandestine removal. The Commissioner (A) ruled in favor of the respondent on this issue as well.

Issue No. 6: Imposition of Penalty
Given that the charge of clandestine removal was not substantiated, no penalty could be imposed on the respondents. The Commissioner (A) upheld this view, ruling in favor of the respondent.

Conclusion:
The judgment upheld the impugned order, dismissing the appeal filed by the Revenue and ruling in favor of the respondent on all issues. The cross objections were disposed of accordingly.

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