2023 (4) TMI 825 - AT - Central Excise

Appeal allowed, order set aside as allegations not proven. Natural justice denied. Corroborative evidence crucial.

M/s Gopi Biri Factory Versus Commissioner of CGST & Excise, Siliguri

M/s Gopi Biri Factory Versus Commissioner of CGST & Excise, Siliguri - TMI Issues Involved:1. Allegations of clandestine manufacture and clearance of biris.2. Denial of natural justice and opportunity for cross-examination.3. Non-supply of crucial documents for defense.Summary:1. Allegations of Clandestine Manufacture and Clearance:The appellants were accused of manufacturing and storing 20,13,500 sticks of biris in excess without accounting for them in the Daily Stock Account (DSA) and clearing 1,41,000 sticks without issuing invoices. Investigations alleged that between January 2007 and September 2008, the appellants clandestinely manufactured and cleared 13,34,36,375 sticks of handmade branded biris without issuing Central Excise Invoices or accounting for them in official records. This led to a show-cause notice demanding Excise duty of Rs.19,38,504/- and proposing confiscation, penalties, and interest.2. Denial of Natural Justice and Opportunity for Cross-Examination:The appellants claimed they were denied an opportunity to defend themselves, violating the principles of natural justice. They were not provided with the DSA/ER-I in Form RG-12A Register seized by the Central Excise Officers and were denied the chance to cross-examine key witnesses. The Commissioner (Appeals) rejected their plea for cross-examination, stating that the buyers' statements were not given under duress and were not retracted.3. Non-Supply of Crucial Documents for Defense:The appellants argued that the DSA in RG-12A form was crucial for their defense and should have been returned by the Department. The Department's failure to provide these documents hampered the appellants' ability to mount an appropriate defense. The Tribunal noted that the Department is obliged to return both relied upon and un-relied upon documents recovered from the appellants' premises.Tribunal's Findings:The Tribunal found that mere entries in private records without corroborative evidence cannot substantiate charges of clandestine manufacture and clearance. The burden of proof lies on the revenue to establish the fact of clandestine clearance beyond all reasonable doubt, which was not met in this case. The Tribunal emphasized the importance of cross-examination for ascertaining the truth and delivering justice. The denial of cross-examination and non-supply of crucial documents were deemed violations of legal principles, rendering the impugned order unsustainable.Conclusion:The appeal was allowed, and the order of the Commissioner (Appeals) was set aside. The cross objections filed by the Revenue were also disposed of in the same terms. The judgment underscores the necessity for corroborative evidence and adherence to principles of natural justice in adjudication processes.