TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether denial of cross-examination of witnesses whose statements were relied upon vitiated the adjudication under section 9D of the Central Excise Act, 1944; (ii) Whether the charge of clandestine manufacture and clearance could be sustained on the basis of third-party documents and statements without independent corroborative evidence.
Issue (i): Whether denial of cross-examination of witnesses whose statements were relied upon vitiated the adjudication under section 9D of the Central Excise Act, 1944.
Analysis: The demand rested substantially on statements of third parties and the entries in their records. Cross-examination had been specifically sought, but the witnesses were not produced and even the statutory procedure for proving such statements was not followed. In the absence of cross-examination and examination-in-chief as required by law, the statements could not be treated as reliable evidence against the assessee.
Conclusion: The denial of cross-examination and non-compliance with section 9D vitiated reliance on the statements.
Issue (ii): Whether the charge of clandestine manufacture and clearance could be sustained on the basis of third-party documents and statements without independent corroborative evidence.
Analysis: Clandestine removal requires clear, positive and clinching evidence of manufacture, procurement of raw material, transport, buyers, and flow of consideration. Here, apart from the disputed statements and third-party entries, there was no independent evidence of excess raw material procurement, actual manufacture, identifiable buyers, or receipt of sale proceeds. Mere shortages in one raw material and untested third-party records were insufficient to establish clandestine clearance.
Conclusion: The demand and penalties could not be sustained for want of reliable corroborative evidence.
Final Conclusion: The impugned order confirming duty and penalties was unsustainable and was set aside, resulting in relief to the assessee and dismissal of the Revenue's challenge as infructuous.
Ratio Decidendi: Where a demand of clandestine removal is founded on witness statements and third-party records, those statements must be proved in accordance with law and the allegation must be supported by independent, clinching evidence; otherwise the demand cannot be sustained.
TaxTMI 
TaxTMI 
