2018 (5) TMI 1119

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....rial Area, GTK Rd, Delhi iii) Godown premises located at Basement of E-46, Shastri Nagar, Delhi iv) Godown of M/s Balaji Trading Co. A-908, Shastri Nagar, Delhi v) Residential premises of Partners of M/s Prabhat Zarda Factory (Co.) located at A-194, Derawal Nagar, Delhi vi) M/s Pooja Agencies, 284-85, Katra Peran, Tilak Bazar, Khari Baoli, Delhi vii) Premises of packing material supplier of M/s Prabhat Zarda Factory Co. located at A-66/1, GTK Rd Industrial Area, Delhi 2. At the factory premises, stock verifications revealed that the finished goods tallied with the recorded balance but raw materials in excess of the recorded balance was noticed. In the two godowns situated at Shastri Nagar, Delhi, both belonging to Shri Dinesh Gupta (Mittal), finished goods bearing the brand name of "Ratna" was found and since there were no documents evidencing the licit nature of the goods, the same were seized. Shri Dinesh Gupta (Mittal), in his statements, recorded by the Departmental Offices, admitted that the goods bearing "Ratna" brand were purchasd from M/s PZF, but he could not produce any documents evidencing payment of duty. He also admitted,....

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....odowns in Shastri Nagar, Delhi but Revenue has not produced any evidence on record to substantiate the claims that such goods were manufactured and cleared from the factory of M/s PZF. In the absence of such evidence, the duty demand cannot be raised on the PZF. (iii) Revenue has sought to impose the demand on M/s PZF only on the strength of the statements given by some of the buyers. They have relied on the statement of Shri Deepak Mittal as well as Shri Dinesh Gupta but the duty demand cannot be fastened only on the basis of such statements in the absence of any evidence on record linking the goods to the appellant's factory. (iv) In addition to "Ratna" brand goods, the Revenue also found goods with brands belonging to others in the premises of buyers. (v) Inculpatory statement given by Purushottam Arya, Managing Partner of M/s PZF has been retracted and cannot be taken cognizance in the present proceeding. (vi) The Hon'ble Commissioner, while passing the impugned order, has not considered the procedure laid down in Section 9D of the Central Excise Act which is mandatory as has been held by a series of decisions of the Hon'ble High Court of P&H....

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....manufacture. The evidence, linking the seized goods to the factory of M/s PZF, is in the form of oral statements. Shri Purushottam Arya, Managing Partner admitted in his initial statements that seized goods were manufactured in the factory and cleared clandestinely without payment of duty but his statement was retracted subsequently. At the end of the buyers, both Shri Dinesh Mittal and Shri Dinesh Gupta in their statement have admitted that the seized goods were purchased from M/s PZF but without payment of duty. 14. The appellant, during the course of arguments, has raised the issue that the adjudicating authority, while passing the impugned order, has not considered the procedure laid-down in Section 9D of the CE Act, 1944, which is mandatory. They have also cited the decision of the Hon'ble P&H High Court in the case of M/s Jindal Drugs (P) Ltd, 2016 340 ELT 67 (P&H). We have perused the cited case law. The Hon'ble High Court has observed as follows after examining the statutory provisions of Section 9D: "17. There is no justification for jettisoning this procedure, statutorily prescribed by plenary Parliamentary legislation for admitting; into evidence, a statement....

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....he light of the above, respondent No.2 is directed to adjudicate the show cause notice issued to the writ petitioners by following the procedure contemplated by Section 9D of the Act and the law laid down by various judicial authorities in this regard, including the principles of natural justice, in the following manner: (i) In the event that the Revenue intends to rely on any of the statements, recorded under Section 14 of the Act and referred to in the Show Cause Notices issued to Ambika and Jay Ambey, it would be incumbent on the Revenue to apply to Respondent No.2 to summon makers of the said statements, so that the Revenue would examine them in chief, before the adjudicating authority, i.e., before Respondent No.2. (ii) A copy of the said record of examination-in-chief, by the Revenue, of the makers of any of the statements on which the Revenue chooses to rely, would have to be made available to the assessee, i.e., to Ambika and Jay Ambey in this case. (iii) Statements recorded during investigation, under Section 14 of the Act, whose makers are not examined-in-chief, before the adjudicating authority, i.e., before Respondent No.2, would have to be es....