Demand confirmation for clandestine removal set aside due to natural justice violation under Section 9D

CESTAT Mumbai set aside demand confirmation for clandestine removal of MS bars. The tribunal found the adjudicating authority violated natural justice principles by denying cross-examination requests without reasons, contrary to Section 9D of Central Excise Act, 1944. Evidence consisted solely of records from other parties and untested statements from customers/transporters, lacking corroborative proof of physical clearance or sale proceeds recovery. With nearly a decade elapsed, document relevancy under Section 9D could not be established, rendering conclusions inadmissible. Appeal allowed.

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Issues Involved:
- Challenge to order of Commissioner of Central Excise and Service Tax charging duty, interest, and penalties under Central Excise Act, 1944 for alleged clandestine removal of 'mild steel (MS) bars' between specific dates.

Summary:
The three appellants challenged the order of the Commissioner of Central Excise and Service Tax, Aurangabad, which imposed duty, interest, and penalties under the Central Excise Act, 1944, for alleged clandestine removal of 'mild steel (MS) bars' between 1st April 2008 and 23rd March 2011. The main dispute centered around the denial of cross-examination of witnesses and the credibility of inferences drawn from a 'computer printout' of a ledger recovered from another party. The appellants argued that documents retrieved from a computer without authentication are inadmissible as settled by previous court decisions. The Authorized Representative contended that statements of customers and transporters, along with computer records, established the clandestine clearance by the assessee. The confirmation of demand was based on records recovered from other parties and statements of customers and transporters, without evidence of physical clearance or recovery of sale proceeds. The appellants also highlighted the refusal of cross-examination without reasons, violating principles of natural justice and rendering the findings questionable.

The adjudicating authority's reliance on untested statements and lack of corroborative evidence, coupled with the inability to establish the relevancy of documents after a significant time lapse, led to the conclusion that the impugned order lacked merit. The appeals were allowed, and the impugned order was set aside.

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