TaxTMI 
TaxTMI 
2017 (6) TMI 1021
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....ha. On completion of further follow-up of investigation, proceedings were initiated against various persons including the main appellant. The case of the Revenue is that the main appellant indulged in un-accounted manufacture and clearance of gutkha. Case was adjudicated resulting in the impugned order. The original authority ordered the recovery of central excise duty amount of Rs. 1,06,83,533/- and imposed equivalent amount of penalty on the main appellant in terms of Section 11AC of the Central Excise Act, 1944. Various penalties were imposed on the other co- notices under Rule 26 of Central Excise Rules, 2002. 2. The ld Counsel for the main appellant submitted that there is no incriminating evidence against main appellant which will indicate un-accounted manufacture and clearance of gutkha. None of the dealers, stock traders who gave statements have indicated anything against the main appellant to allege un- accounted clearance of excisable goods. The gutkha, with reference to which statements were recorded from S/Shri Rajesh Bhatia, Shyam Bhatia and Girish Thampi, have no connection to the main appellant. There is no link that the goods seized were actually cleared by the mai....
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....t their residence was seized by the Officers detailed at C1 and co-related at C4 and C5 purportedly Showing transportation of Gutkha by rail from Delhi to Ernakulam at Kerala. None of these documents at C1, C4 and C5 suggest that the gutkha mentioned therein were manufactured and cleared from the appellants factory at Jodhpur. Appellants authorized signatory Mr Lalit Joshi was not even questioned/confronted with any of these documents for his explanation. A8 to A12 Mahazar dt 22.8.2007, 23.8.2007, 3.9.2007 and 6.9.2007 drawn at Ernakulam Jn. And Paghat Railway Stn. These Mahazars at the most show transportation of goods from Delhi to Ernakulam Jn. None of these evidences are showing any relationship between the Appellants factory and or clandestine manufacture and or clearance of goods from Appellant's factory. B1 to B6 statement of tra ders recorded u/s 14 of the Act. These traders have admitted cash transact ions with Mr Benson and Mr Thampi for purchase of Bombay 1000 Gutkha without documents. None of these traders stated that the unaccounted gutkha purchased by them in cash were sent from the factory of the Appellants. Admittedly Bombay 1000 Gutkha is manufactured by sev....
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.... road to two railway stations at New Delhi/Wazirpur and then subsequently booked to various destinations in Kerala. Apart from lack evidence regarding transportation of goods from Jodhpur to Delhi, the RRs did not link-up to the impugning goods. 9. We have also noted that the original authority rejected the request of the appellants for cross-examination of various persons whose statements were relied upon. He recorded that there is no fundamental right of cross-examination in the adjudication proceedings. He considered that there is preponderance of probability of calendestine clearance and that is sufficient. We find that the original authority has fell in error in giving such a summary finding. It is now a well-settled legal position that when any statement is relied upon by the adjudicating authority, it is necessary for him to strictly follow the procedure under Section 9D of the Central Excise Act, 1944. Reference can be made to the decision of Hon'ble Punjab and Haryana High Court in the case of G.Tech Industries 2016(339) ELT 209(P&H). The High Court observed as below: "13. If none of the circumstances contemplated by clause (a) of Section 9D(1) exists, clause (b) of Sec....
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....d apply in view of this express stipulation in the Act, it is not open to any adjudicating authority to straightaway rely on the statement recorded during investigation inquiry before the Gazetted Central Excise officer, unless and until he can legitimately invoke cause (a) of Section 9D(1). In all other cases, if he wants to rely on the said statement as relevant, for proving the truth of the contents thereof, he has to first admit the statement in evidence in accordance with clause (b) of Section 9D(1). For this, he has to summon the person who had made the statement, examine him as witness before him in the adjudication proceedings, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice." 10. We note that the original authority found that the seizure of gutkha at various premises and railway stations without documents are clear-cut evidence of appellant indulging in calendestine removal. We find that while gutkha was seized in various places, the un-accounted clearance of such gutkha by the appellant has to be shown by supporting evidence. The seizure of gutkha in other places by itself will no....