Statutory records and cross-examination rights must be considered before adverse findings on suppression and invoice misuse.

Statutory records such as challans and registers must be examined as primary evidence where an assessee offers a documentary defence to allegations of suppression and misuse of invoices. The adjudicating authority cannot reject such material as an afterthought or proceed mainly on statements and assumptions without reconciling them with the documents, considering delay in issuing notice, or granting an effective opportunity, including cross-examination. Because the documentary defence and procedural fairness were not properly addressed, the order was unsustainable and the matter had to be remitted for fresh consideration in accordance with natural justice.

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Issues: Whether the adjudication order was vitiated for failure to consider the statutory records and challenged evidence, and whether the matter required remand for de novo consideration.

Analysis: The dispute turned on alleged suppression of production and misuse of invoices of another unit, but the record showed that the appellants relied on statutory documents, including challans and registers, to support their explanation. The adjudicating authority rejected those documents as an afterthought and proceeded largely on statements and assumptions, without a critical analysis of the evidence or the plea of delay in issuance of the notice. Where statutory records are available, they must be examined as primary evidence, and witness statements can be relied upon only after reconciling them with the documentary material. The failure to consider the documentary defence, the delay in initiating proceedings, and the denial of an effective opportunity, including cross-examination, rendered the order unsustainable.

Conclusion: The order could not be sustained and the matter had to be sent back for reconsideration after examining the statutory records, witness statements, and the appellants' defence in accordance with natural justice.

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