2010 (4) TMI 406 - HC - Central Excise

Appellant's Challenges Dismissed, Composite Penalty Upheld, High Court Upholds Tribunal's Decision

The appellant's challenges regarding the violation of natural justice principles due to the absence of cross-examination of panchas and the rejection of ... Rectification of Mistake - on the ground that the application had been treated as an application for rectification of mistake. It is contended that in view of the order passed by the High Court, the Tribunal should have re-considered the appeal on merits. On merits of the first order, it is submitted that the annexures supplied to the appellant along with the panchnama were totally different from the annexures supplied with the show cause notice. Hence, the appellant had requested the adjudicating authority to permit the appellant to cross-examine the panchas. It is submitted that despite such specific request having been made, the appellant was not permitted to cross-examine the panchas which has resulted into violation of the principles of natural justice. Held that- contention on cross examination not raised before Tribunal. Impugned Tribunal order indicating that appellant neither appeared nor adjourned. Sought on the date of hearing. Concurrent findings on the fact based on appreciation of evidence. . question of law not arise. Issues:1. Violation of principles of natural justice in the absence of cross-examination of panchas.2. Rejection of appeal without considering appellant's submissions.3. Alleged clandestine removal of goods and imposition of composite penalty.4. Review of the Tribunal's order and imposition of penalty under different provisions.5. Rectification of mistake application and rejection by the Tribunal.6. Admissibility of composite penalty under different provisions.Analysis:Issue 1: Violation of principles of natural justiceThe appellant challenged the Tribunal's orders, alleging a violation of natural justice due to the lack of opportunity to cross-examine the panchas who signed the panchnama. The appellant contended that this omission infringed the principles of natural justice. However, the Tribunal upheld the lower authorities' decision based on the evidence provided, emphasizing the corroborative statements and evidence supporting the revenue's case.Issue 2: Rejection of appeal without considering submissionsThe appellant argued that the Tribunal dismissed the appeal solely based on the department's submissions and lower authorities' orders without considering the appellant's pleadings. The Tribunal's decision was based on the evidence presented, including the director's admission of removal of goods without accounting for them, supported by statements from traders involved in the transactions.Issue 3: Alleged clandestine removal of goods and composite penaltyThe Tribunal upheld the imposition of a composite penalty on the appellant for clandestine removal of goods. The appellant contested the legality of imposing a composite penalty under two different provisions. However, the Tribunal found the penalty justified based on the evidence of parallel invoices and statements from involved parties, concluding that the revenue's case was substantiated beyond doubt.Issue 4: Review of Tribunal's order and penalty under different provisionsThe appellant sought a review of the Tribunal's order and questioned the imposition of penalties under separate provisions. The Tribunal maintained its decision, emphasizing the evidence presented, including the director's initial admission of wrongdoing and the statements of traders involved in the transactions.Issue 5: Rectification of mistake applicationThe appellant filed an application for rectification of mistake, which was rejected by the Tribunal. The Tribunal deemed the application as relating to the merits of the case and not a valid ground for rectification. The High Court found no fault in the Tribunal's decision to reject the rectification application.Issue 6: Admissibility of composite penalty under different provisionsThe appellant argued against the imposition of a composite penalty under two different provisions. However, the Tribunal upheld the penalty, citing the evidence of parallel invoices and statements from involved parties as sufficient to support the penalty. The High Court dismissed the appeal, stating that no substantial legal question arose from the Tribunal's orders based on the evidence and concurrent findings.