TaxTMI 
TaxTMI 
2010 (3) TMI 700
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....ts. After due process of law, the Commissioner passed the impugned order. The operative portion of the impugned order appears as follows :- ORDER (i) I confirm an amount of Rs. 2,37,956/- under proviso to sub-section (1) of Section 11A of Central Excise Act, 1944 and the amount is to be paid fort by M/s. SSPL. (ii) I confirm, an amount of Rs. 13,20,056/- under proviso to sub-section (1) of Section 11A of Central Excise Act, 1944 and the amount is to be paid forthwith by M/s. SSPL. The above amounts are to be appropriated from the amount of Rs. 25,00,000/- already paid by them towards the duty confirmed. (iii) I impose a penalty of Rs. 15,58,012/- under Section 11AC of Central Excise Act, 1644 on M/s. SSPL. (iv) I direct M/s. SSPL to pay interest on the amount of Rs. 15,58,012/- under Section 11AB of Central Excise Act at the rate applicable and for the period as prescribed under Section 11AB. (v) I impose penalty of Rs. 7,00,000/- (Rupees seven lakhs only) or Shri Suresh Kumar Singhal, under Rule 26 of Ce....
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....ecords recovered from the residence of Shri Rameswarlal Rathi showing the clearance of CTD Bars cleared from the factory without payment of duty during the months of April, May, July and August 2003. 4. The Commissioner found that the proposals in respect of amounts at Sl. No. 2 & 3 were not established. As regards amounts at Sl. No. 1, the Commissioner found that details figuring in documents recovered from Shri Om Prakash Sharma, Supervisor in SSPL on 26-9-2003 during search of the factory premises showed details of receipt of MS ingots in the factory and clearances of CTD bars from the factory. The documents showed details of quantity, vehicle number, name of the supplier as regards raw material. Similar particulars were noted as regards the CTD bars cleared, such as customers name, vehicle number, quantity and contractors' name. Shri Om Prakash Sharma had stated that he had himself recorded the particulars on the document recovered and that the loading contractors' names and Shri Mansingh and Shri Haris names were noted as "M" and "H" respectively as per the directions of Shri Suresh Kumar Singhal, Managing Director and Shri Vijay Kumar Agarwal, Director of SSPL. Durin....
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....ion of Shri Nityananda Mukherjee on the ground that he had implicated the appellant at the instance of Shri Sarkar falsely. But without giving any reasons, the collector did not grant the cross-examination. It is no doubt true that in all cases, cross-examination need not be granted, but it all depends on the circumstances of each case. If the appellant had asked for cross-examination only for the purpose of dragging the proceedings or if the Collector comes to the conclusion that the cross-examination is not material, then by assigning sufficient reasons, he can reject the prayer. But, in this case, no such effort is made by the Collector to reject that prayer by assigning sufficient reasons. Therefore, this amounts to violation of natural justice. [para 12]". 5. The Commissioner noted that the instant investigation was initiated pursuant to a case of pilferage of electricity by SSPL booked by the Electricity Department involving an amount of Rs. 4.91 crores. The amount relating to the alleged theft stood reduced to Rs. 66 lakhs which could have been used for production of 96.73 MTs of CTD bars found to have been cleared on 26-9-2003 based on the document recovered from S....
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.... to state anything. I could not appear for hearing on 7-7-2005 and on my return from native place, the advice of one of the broker, I am filing the following reply. I have not committed any offence. I did not concern myself with any offensive transactions. I am merely a broker giving information to dealers and manufacturers of CTD bars who interested to know market information regarding stocks available with the manufacturers. After giving the information, the parties to speak themselves with each other about the quantities, rate etc., and I do not know whether any quantities would be cleared by manufacturers and purchased by the dealers. That is to say except passing on the information I do not involve myself with any actual clearances. However only on the basis of the transactions conducted as evidenced from the manufacturers excise record I am given commission." 96. Vide his latter-dated 22-7-2005 Shri Rameswarlal Rathi stated that he had appeared for personal hearing nearly 3 to 4 times. But he was not called inside. This proves that the contention of the Counsel to the noticees is incorrect. The Counsel cannot say that Shri Rathi was not produced for cross-examination....
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....dence of illicit clearances. The Commissioner had ignored the appraisal of the Andhra Pradesh Productivity Council that the recorded production was constant with the capacity of the appellant's plant. Thought the Commissioner was satisfied with the quantity of CTD bars allegedly manufactured clandestinely by SSPL could not have been manufactured with the quantity of electricity allegedly pilfered by SSPL, failed to appreciate the impossibility of the production found to have been cleared on 25/26-9-2003. The Commissioner found clearances by SSPL without payment of duty amounting to Rs. 2,37,856/- and Rs. 13,20,056/- without any challenging evidence. It was submitted that the impugned order deserved to be set aside. 8.  During hearing, the ld. Counsel for the appellants relied upon various case laws to rely on their respective ratios as follows :- (1) T.G.L. Poshak Corporation v. CCE, Hyderabad [2002 (140) E.L.T. 187 (Tri.-Chennai)]. The Tribunal laid down that unless it produced evidence, which should be clinching, in the nature of purchase of inputs and sale of final products, demands cannot be confirmed based on some notebooks. (2) &nbs....
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....bsp; Takshila Spinners v. CCE, Chandigarh [2001(131) E.L.T. 568 (Tri.- Del.)] - The Tribunal held that occular and uncorroborative statements of the witnesses recorded during investigation at the back of the appellants, without allowing them to test the correctness of the same by cross-examining those witnesses, could not be made basis for holding that the allegations against them as set out in the show cause notice, stood proved, by the Commissioner. That was, in fact, no evidence in the eyes of law which could be used against them. Therefore, the impugned order of the Commissioner being solely based on inadmissible evidence cannot be legally sustained. In Sharma Chemicals v. CCE, Calcutta-II [2001 (130) E.L.T. 271 (Tri. - Kolkata)] (supra) referred by the Counsel it had been ruled that denial of cross-examination of the person to whom the appellants denied their employee, amounted to violation of principles of natural justice and as such clandestine removal of the goods based on the entries in the note book recovered from that person did not stand proved. To the same effect is the proposition of law laid down by the Tribunal in Shalimar Agencies v. CCE, Kandla [....
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.... No. 201 of File No. 29 recovered from the factory. Similarly, the accounted for inputs i.e. ingots are reflected in the information shown in our raw material accounts." 11. On a perusal of the above statement of Shri Suresh Kumar Singhal, it is apparent that the document covered from Shri Om Prakash Sharma reflected true account of transactions in MS ingots and CTD bars cleared clandestinely by SSPL. Though the documents were recovered from Shri Om Prakash Sharma and employees of SSPL, its contents were accepted by the Managing Director of SSPL as correct. Therefore the evidentiary value of the above documents is not lost for the reason that the same could not be proved on cross-examination of Shri Om Prakash Sharma by SSPL. We also find that it may not be appropriate to call Shri Om praksh Sharma a 3rd party witness totally removed from the transactions of the assessee. The assessee is a person; its executives and respective employees cannot appropriately be labeled as 3rd party witnesses. In the facts of the case, it appears that the Commissioner rightly relied on the documents recovered from Shri Om Prakash Sharma to find illicit removals of CTD bars on 25/26-9-2003. A....