TaxTMI 
TaxTMI 
2018 (10) TMI 266
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....peals arise from the common order passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (CESTAT) in three appeals, two of them filed by Assessee and one by the Revenue in the matter of challenge to order dated 31.03.2006 passed by the Commissioner (Adjudication) Raipur, in proceeding initiated against the Assessee under show cause notice dated 18.10.2002/21.11.2002. 4. The Revenue issued a show cause notice dated 18.10.2002/21.11.2002 to the Assessee (appellant in two of the appeals herein) as well as two other entities of the assessee as also to Shri Bal Kishan Gupta and Shri Naresh Kumar Gupta, both being Vice President in M/s. Prakash Industries Ltd. Champa, District Champa-Janjgir (CG) proposing recovery of Central Excise Duty as also recovery of interest and imposition of penalty. The notice also proposed confiscation of land, building, plant and machinery. In reply to the show cause notice, the assessee filed its reply and the Commissioner acting as Adjudicating authority, after enquiry, passed an order on 31.03.2006 confirming demand of duty amounting to Rs. 1,51,44,426/- along with interest. The Commissioner, however, dropped the demand of Rs. 9,94,65....
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....or counsel appearing for the appellant-assessee contended before us that the learned Tribunal was not justified in remanding the matter for reconsideration of the Adjudicating authority in the absence of there being any ground for remand made out. According to learned Senior counsel for the appellant, though there exists a power of remand with the Tribunal, remand could be justified only in circumstances warranting consideration of new evidence or fresh opportunity of hearing or for the like reason necessitating examination of material which was not before the Adjudicating authority. It has also been contended that present is not a case where the Tribunal formed an opinion that entire enquiry is required to be reopened either because it was completely misdirected or because any relevant clinching evidence which ought to be collected, was not collected or produced by the respective parties and the interest of justice required granting them opportunity to produce such oral or documentary evidence. Taking further his argument, learned counsel for the appellant argued that it is not even a case where any other party has alleged that they were not afforded proper opportunity of hearing.....
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....mission, which were otherwise not admissible and relevant, confirmed demand under various heads, amounting to a total of Rs. 1,51,44,426/-. It was contended that in order to receive such statements in evidence, a satisfaction is required to be recorded under the law. It has also been argued that in any case, even if it is treated to be relevant, the statement could not be used as an admission. As the findings with regard to confirmation of demand of Rs. 1,51,44,426/- are mainly based on so called admission, the entire demand of duty of Rs. 1,51,44,426/- is liable to be set aside. 12. In reply, learned counsel for the Revenue argued that present is not a case where the persons whose statements were recorded during investigation wherein clandestine removal was admitted, were not examined before the Adjudicating authority, even though, they had retracted their statement earlier made then examined before the Adjudicating authority and the Adjudicating authority assessed the evidence on record and while carrying out such an assessment, whether the statement recorded during investigation were to be relied upon and if so, to what extent, was also taken into consideration. It is next cont....
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....tation of the goods, receipt of the goods by the buyers, receipt of sale proceeds etc. In a nutshell, suppression of production is required to be established first to establish clandestine removal of goods as production is first step for removal. " 13.1. The Adjudicating authority, thereafter, examined in great details, the material on record before it, which not only runs into several paragraphs but several pages. It has taken into consideration the evidence relied upon by the investigators for alleged evasion of duty which include statements of the officers of the Assessee company, the invoices, registers recovered from the transporters including statement of some other persons. The Adjudicating authority then recorded that no other evidence in the form of clandestine receipt of raw material, consumption of electricity, manufacture of goods, transportation of goods, receipt of the goods by the consignees or receipt of sale proceeds etc. has been brought on record. It further recorded that there was no evidence of clandestine purchase or receipt of raw material and consumption of electricity or receipt of sale proceeds brought on record. It was observed that the investigation lac....
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....settled position of law that proof and evidence of purchase of raw materials and sell of final product clandestinely is necessary in to establish the allegation of suppression of production and clandestine removal of goods and that the allegations are to be proved with affirmative evidences." Further, it was held in the case of Brim Products Vs. CCE [2001(130) E.L.T. 719(T)] that "revenue is to prove charge of clandestine removal beyond doubt." The CEGAT also held that "no positive evidence to establish clandestine removal adduced by department-Quantity of alleged removal calculated on basis of transport company's records-Demand based on presumptions and assumptions not sustainable". Similarly, the statements are not acceptable as conclusive evidence as narrations made therein are not supported by corroboratory evidences in view of CESTAT's decision in the case of Pioneer Industries Vs. CCE [2006(193) ELT 506 (T)] holding that "clandestine removal based merely on alleged confessional statements without corroborations by any document is not sustainable." It was further observed : "The allegation of clandestine removal on the basis of 'bilty nakal registers' and....
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.... challenged by the Revenue before the Tribunal, the Tribunal, as we see, to some extent, went into the merits of the case but then without recording its own finding on facts, upon consideration of entire material on record, justified the order of remand. The Tribunal's finding to justify remand are as below : "14. Revenue is also in appeal against the same Orderin- Original No.38/2006 dated 31.03.2006. The Id. AR for the Revenue, based on appeal memorandum mainly contends that the impugned order has erred in dropping the demand of Rs. 9,94,65,997/- on 67,170,156 MTs of final goods cleared without payment of duty on the basis of bilties recovered from the premises of various transporters. The Id. Counsel for the Department submits that the respondent assessee, M/s. PIL evaded Central Excise duty and it has been admitted by AGM of PIL and the case is also based on Bilty Nakal Register. 14.1 Revenue also contends that the penalties imposed are not commensurate with the leval of duty evasion confirmed. 15. On behalf of the respondents, Ld. Advocate during the hearing, in addition to the submissions made for their appeals Nos. 2287 & 2292, submit that the department in their a....
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....of the parties were not afforded opportunity of proper hearing to lead oral or documentary evidence. The Tribunal also directed towards necessity of collection of new evidence by granting opportunity to the parties before the Adjudicating authority. We also do not find that an occasion for remand arose because before CESTAT, either the assessee or the Revenue came out with some new relevance in the form of oral and documentary evidence necessitating, in the interest of justice, a de novo inquiry. What, in fact, the Tribunal has done is to remand the case with the direction to the Adjudicating authority to review its own order and nothing else. In our considered opinion, this course of action, in the facts and circumstances of the present case, was not available under the law, even assuming that in view of provision contained in Section 35-C of the Act of 1944, the Tribunal has implicit power and jurisdiction to remand the case for afresh adjudication. The relevant statutory provision in this regard needs to be taken notice of which reads as under : "S.35-C(1) Orders of Appellate Tribunal - The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being ....
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....making the order of remand. The learned Attorney General has agreed that this is the appropriate course to follow. If the Tribunal required more evidence, it could have called for the same." 13.9. It has to be seen that even in a case where the Tribunal required more evidence, it could have called for the same. The Appellate Authority was the Tribunal constituted under Section 35-C of the Act of 1944. 13.10. The broad principles warranting remand to be taken recourse to, though with reference to the provision contained in Order XLI of CPC were considered by the Hon'ble Supreme Court in the case of Syeda Rahimunnisa (supra), as below: "35. It is a settled principle of law that in order to claim remand of the case to the trial Court, it is necessary for the Appellate to first raise such plea and then make out a case of remand on facts. The power of the appellate Court to remand the case to subordinate court is contained in order XLI Rule 23, 23-A and 25 of Code of Civil Procedure. It is, therefore, obligatory upon the Appellant to bring the case under any of these provisions before claiming a remand. The appellate Court is required to record reasons as to why it has taken rec....
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....ely examined the issue by taking into consideration the entire material on record. It was for the Tribunal to examine the legality and validity of such finding on the grounds raised by the Revenue and arrive at its own finding as to whether the Adjudicating authority was correct in law and on fact in reaching upon the conclusion that demand of duty of Rs. 9,94,65,997/- was liable to be dropped. We accordingly set aside the part of the order of the Tribunal to the extent it directs remand of the case in the matter of consideration of leviability of demand of Rs. 9,94,65,997/-. 14. Finding on Substantial Question of Law No.2 The issue with regard to admissibility of a statement recorded during investigation was examined by this Court in the case of TAXC No.54 of 2017 (M/s. Hi Tech Abrasives Limited Vs. the Commissioner, Central Excise and Customs, Raipur). In that case, an issue was raised as to whether statement recorded during investigation was admissible in evidence so as to constitute admission of clandestine removal when the person whose statement is said to be taken was not examined before the Adjudicating authority. Upon examination of the said issue in the light of provisio....
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....d as witness before the Adjudicating authority and secondly, that the Adjudicating authority forms an opinion that having regard to the circumstances of the case, the statement should be admitted in the evidence, in the interest of justice. No doubt, two persons had filed affidavit and they were also examined two Assistant General Managers but there is no satisfaction recorded by the adjudicating authority that in the circumstances of the case, it should be admitted in the interest of justice. We find that the Adjudicating authority and the Tribunal both have proceeded to take such statement as admission of clandestine removal. Therefore, we are of the view that the statement of two Assistant General Managers namely : Shri R.K. Bhadoria and Shri S.N. Jha could not be treated as admission of clandestine removal. 14.3. However, we find that the finding recorded by the Adjudicating authority and confirmed by the Tribunal is not solely based on the so called admission but based on other evidence on record which we were taken through during the course of argument, as contained in paras 5.4, 5.5, 5.6, 5.7 & 5.8. Though, it was strenuously urged before us that once statements recorded du....