Excise duty confirmed on clandestine gutka manufacture after cross-examination of witnesses under Section 9D

CESTAT New Delhi upheld the adjudicating authority's order against the appellant for clandestine manufacture and clearance of gutka. The tribunal found sufficient opportunity was provided for cross-examination under Section 9D of the Central Excise Act, 1944, with four witnesses cross-examined. Large quantities of raw materials, packing materials, and finished gutka worth Rs.1,17,04,930/- were seized from four godowns without documentation. The tribunal confirmed excise duty of Rs.21,48,030/- was recoverable under Section 11A(1) with interest and penalty under Section 11AC, and ordered confiscation of seized goods. The appeal was dismissed.

---

---

Issues Involved:
1. Violation of Section 9D of the Central Excise Act, 1944.
2. Compliance with principles of natural justice.
3. Opportunity for cross-examination of witnesses.
4. Evidence of clandestine manufacture and clearance.
5. Validity of seizure and confiscation of goods.

Summary:

1. Violation of Section 9D of the Central Excise Act, 1944:
The appellant argued that the provisions of Section 9D were violated, contending that statements used in adjudication proceedings must be established through cross-examination if requested. The Tribunal found that the appellant had been given sufficient opportunity for cross-examination, and the relevant witnesses were examined. The appellant failed to show any prejudice caused by the absence of cross-examination of certain witnesses.

2. Compliance with Principles of Natural Justice:
The appellant repeatedly raised the issue of non-compliance with natural justice, leading to multiple remands. In the third round, the Adjudicating Authority granted ample opportunities for personal hearings and cross-examinations. The Tribunal found that the principles of natural justice were duly complied with, as the appellant was given reasonable opportunities to present their case.

3. Opportunity for Cross-Examination of Witnesses:
The Tribunal noted that the appellant was allowed to cross-examine four out of six witnesses. The remaining witnesses did not avail the opportunity despite being granted. The Tribunal concluded that the Adjudicating Authority acted correctly and that the appellant's right to cross-examination was not violated.

4. Evidence of Clandestine Manufacture and Clearance:
The Tribunal upheld the findings that the appellant was involved in clandestine manufacture and clearance of goods. The appellant's contradictory statements and failure to produce evidence to correlate the seized goods with previously released goods were noted. The Tribunal found that the seized goods were unaccounted for and stored without proper documentation, indicating intent to evade excise duty.

5. Validity of Seizure and Confiscation of Goods:
The Tribunal affirmed the Adjudicating Authority's decision to confiscate the seized goods and recover excise duty along with interest and penalties. The Tribunal agreed that the appellant indulged in wilful suppression and fraud, justifying the penalties imposed under Section 11AC and interest under Section 11AA of the Central Excise Act.

Conclusion:
The appeal was dismissed, and the impugned order was affirmed, holding that the excise duty amounting to Rs. 21,48,030/- along with interest and penalties was recoverable, and the seized goods were liable for confiscation. The Tribunal found no fault with the Adjudicating Authority's compliance with natural justice and the opportunity for cross-examination. The appellant's involvement in clandestine activities was established, justifying the penalties and confiscation.

---