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of <h1>Tribunal remands appeals, stresses witness cross-examination for fair adjudication</h1> The Tribunal remanded the appeals to the adjudicating authority, setting aside the penalties imposed on the appellant for alleged Urea diversion for ... Levy of penalty u/r 26 (1) of Central Excise Rules, 2002 - case of the department is that the Urea was diverted and used for industrial purpose - demand of differential duty in the chain from manufacture up to the consumer - cross-examination done properly or not - HELD THAT:- The crossexamination of the witnesses was not carried out properly. The Hon’ble High Court in two identical cases of GUJARAT NARMADA VALLEY FERTILIZERS AND CHEMICALS LTD [2020 (1) TMI 1204 - GUJARAT HIGH COURT] and VIJAY CHANDRAKANT MULCHANDANI VERSUS UNION OF INDIA & 2 [2017 (11) TMI 2011 - GUJARAT HIGH COURT], considering the fact that no cross-examination was allowed but the same is necessary for passing a reasoned order by the adjudicating authority, directed the adjudicating authority to conduct the cross examination. This Tribunal in also one set of cases on identical issue in the case of Dhanlaxmi Pigments Pvt. Ltd and others vide Final Order No. A/11258-11368/2019 dated 08.07.2019 [2019 (9) TMI 1163 - CESTAT AHMEDABAD] remanded the matter to the adjudicating authority. Thus, all these appeals should also be remanded to the adjudicating authority for passing a fresh order, after conducting the cross-examination of the witnesses - appeals are disposed of by way of remand to the adjudicating authority for passing a fresh order after complying the provision to Section 9D of Central Excise Act, 1944. Issues involved:- Alleged diversion of Urea for industrial purposes- Demand of differential duty- Penalty imposed under Rule 26 (1) of Central Excise Rules, 2002- Cross-examination of witnesses for a correct legal conclusion- High Court directions for allowing cross-examination in similar cases- Remand to adjudicating authority for fair adjudicationAnalysis:1. Alleged Diversion of Urea for Industrial Purposes:The appellant, engaged in Urea manufacturing for fertilizer, faced allegations of diversion for industrial use, leading to a demand for differential duty and penalties under Rule 26 (1) of Central Excise Rules, 2002.2. Cross-Examination of Witnesses and Legal Conclusion:Advocates for the appellant emphasized the importance of cross-examining witnesses to reach a correct legal conclusion. They cited cases where the High Court directed the adjudicating authority to allow cross-examination, ensuring fair adjudication based on witness statements.3. High Court Directions and Tribunal's Decision:Considering the necessity of cross-examination for a reasoned order, the Tribunal, in line with High Court judgments and its own precedents, decided to remand all appeals to the adjudicating authority. This remand aimed to uphold consistency and fairness in the adjudication process.4. Remand for Fair Adjudication:The Tribunal set aside the impugned orders and remanded the appeals to the adjudicating authority. The remand instructed conducting cross-examination of witnesses in compliance with Section 9D of the Central Excise Act, 1944. Even if cross-examination is not practically possible in some cases, the adjudicating authority was granted the flexibility to de novo adjudicate based on available records.In conclusion, the judgment focused on ensuring a fair and thorough adjudication process by allowing cross-examination of witnesses, as directed by the High Court and consistent with the Tribunal's previous decisions. The remand to the adjudicating authority aimed to uphold principles of natural justice and statutory provisions for a comprehensive legal conclusion.
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