Tribunal remits order for reconsideration, emphasizing adherence to law, statutory procedures, and natural justice.

The Tribunal set aside the impugned order and remitted the matter back to the adjudicating authority for reconsideration. The adjudicating authority was directed to re-evaluate the issue afresh, strictly adhering to the law as settled by the Hon'ble High Court of Punjab & Haryana, ensuring compliance with Section 9D of the Central Excise Act, 1944, and upholding the principles of natural justice. The Tribunal's decision underscores the importance of following statutory procedures and judicial precedents to ensure fair adjudication.

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Issues Involved:
1. Legality of the reliance on statements recorded during the investigation.
2. Compliance with Section 9D of the Central Excise Act, 1944.
3. Adherence to principles of natural justice.

Detailed Analysis:

1. Legality of the reliance on statements recorded during the investigation:
The primary contention raised by the appellant was that the entire Order-in-Original was based solely on statements and panchnama recorded by investigating officers during their visit. The appellant argued that the adjudicating authority failed to comply with Section 9D of the Central Excise Act, 1944. The appellant cited the case of Ambika International vs. Union of India, where it was established that if the adjudicating authority relies on statements recorded during the investigation, the rigour of Section 9D must be followed. The Tribunal agreed that the adjudicating authority must follow the law as settled by the Hon'ble High Court of Punjab & Haryana in the case of Jindal Drugs Pvt. Ltd, which mandates that statements recorded during the investigation cannot be relied upon unless the provisions of Section 9D are scrupulously followed.

2. Compliance with Section 9D of the Central Excise Act, 1944:
The Tribunal emphasized the necessity of adhering to Section 9D, which outlines the conditions under which statements made before a Central Excise Officer can be considered relevant. The Tribunal cited the detailed interpretation of Section 9D by the Hon'ble High Court of Punjab & Haryana in the Jindal Drugs Pvt. Ltd case. According to this interpretation, statements recorded during an investigation can only be admitted as evidence if the person who made the statement is either dead, cannot be found, is incapable of giving evidence, is kept out of the way by the adverse party, or if their presence cannot be obtained without unreasonable delay or expense. Additionally, if these conditions are not met, the person must be examined as a witness before the adjudicating authority, and the authority must then form an opinion that admitting the statement is in the interest of justice.

3. Adherence to principles of natural justice:
The Tribunal noted that the Hon'ble High Court of Andhra Pradesh had previously remanded the matter to the adjudicating authority with directions to follow the principles of natural justice, including allowing cross-examinations of specific persons. The adjudicating authority had granted these cross-examinations. However, the Tribunal found that the adjudicating authority did not fully comply with the procedural requirements of Section 9D, as interpreted by the Hon'ble High Court of Punjab & Haryana. Specifically, the adjudicating authority did not follow the mandatory procedure of examining the persons who made the statements as witnesses before relying on their statements as evidence.

Conclusion:
The Tribunal set aside the impugned order and remitted the matter back to the adjudicating authority for reconsideration. The adjudicating authority was directed to re-evaluate the issue afresh, strictly adhering to the law as settled by the Hon'ble High Court of Punjab & Haryana, ensuring compliance with Section 9D of the Central Excise Act, 1944, and upholding the principles of natural justice. The Tribunal's decision underscores the importance of following statutory procedures and judicial precedents to ensure fair adjudication.

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