AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 434
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....otice was issued to the appellants on 11.1.2002 to deny credit availed by the appellants on PVC resin an input of Rs. 20,62,169/- on the allegation that inputs have not been received in the factory of the appellant. The demand at sl.No.(i) was confirmed on the basis that the transportation was done in the lorry receipts were fictitious and therefore it was alleged that the inputs were not received by the appellants. The demand at S.No.(ii) has been confirmed on the ground that the PVC resin imported by the appellant was not received in the factory. The demand at Sl.No.(iii) was confirmed by denying the credit on the ground that the inputs under cover of 2 invoices transported by the appellants in their own vehicles were not received in the factory. The demand a Sl.No.(iv) of Rs. 33,69,797/- has been confirmed on the ground that the appellant received PVC resin and knitted fabric and did not account for the same in the books of accounts relying on the documents maintained by a transporter. The matter was agitated by the appellant before the adjudicating authority but the adjudicating authority confirmed the above demands. (a) Denial of credit of Rs. 10,29,387 availed on PVC resin p....
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....jab and Haryana High Court in the case of Ambika International-2016-VIL-P&H-CE, Flever International-2016 (332) ELT 416 (Del.). (b) Denial of credit of Rs. 9,17,570 availed on PVC imported: 4. With regard to the denial of credit availed on PVC imputed, it is his submission that the credit availed on 12 invoices has been denied on the ground that the imported PVC was not received by the appellant. He submits that the appellant has paid customs duty on the imported material and the inputs have been received and accounted for in the RG 23D register and transported to the factory under the cover of proper invoices issued by the importer. To support this contention, he produced the documents like gate register, bill for payment of freight, RG 23A Part I register, etc. which clearly shows that the goods were physically received. He submits that the cross examination of Shri Rajender Singh owner of SR Freight Carriers was denied by the adjudicating authority. Therefore, the credit cannot be denied. (c) Denial of credit of Rs. 1,15,212 availed on PVC transported in own vehicle. 5. This credit has been denied on PVC resin transported in their own vehicle on the ground that the inputs ....
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....he reliance placed by the adjudicating authority on 106 invoices. He submits that the appellant has received the inputs and duly accounted for. He submits that no corroborative evidence has been produced by the Revenue to prove clandestine removal of the goods and receipt of money consideration, purchase of other raw materials etc. used in the manufacture of final products to allege clandestine removal. Therefore, the entire demand is on the basis of assumptions and presumptions. Ld. Counsel for the appellant also relied upon the decision of this Tribunal in the case of Alliance Alloys Pvt.Ltd. vs. CCE, Delhi-2016 (338) ELT 749 (Tri.-Chan.) and Kuber Tobacco India Ltd.-2016 (338) ELT 113 (Tri.-Del.). In that circumstance, the impugned order is to be set aside. 7. On the other hand, learned AR supported the impugned order. He further submits that vehicle numbers shown in the invoices were different in which inputs were transported from Cemplast Sanmar to the factory of the appellant and on investigation it was found that either transporter was not available at the given address or vehicle number was different. He submits that on enquiry from the RTO, it was found that the vehicle n....
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....lso usefully be placed on para 16 of the judgment of the Allahabad High Court in C.C.E. V Parmarth Iron Pvt Ltd, 2010 (250) ELT 514 (All), which, too, unequivocally expound the law thus: "If the Revenue choose (sic chose?) not to examine any witnesses in adjudication, their statements cannot be considered as evidence." 30. That adjudicating authorities are bound by the general principles of evidence, stands affirmed in the judgement of the Supreme 13 of 16 CWP No. 12615 of 2016, CWP No. 12616 of 2016, CWP No. 12617 of 2016 and CWP No. 12618 of 2016. Court in C.C. V Bussa Overseas Properties Ltd, 2007(216) ELT 659 (SC), which upheld the decision of the Tribunal in Bussa Overseas Properties Ltd v C.C., 2001 (137) ELT 637 (T). 31. It is clear, from a reading of the Orders-in-original dated 19.05.2016 and 01.06.2016 supra, that Respondents No.2 has, in the said Orders-in-Original, placed extensive reliance on the statements, recorded during investigation under Section 14 of the Act. He has not invoked clause (a) of sub-section (1) of Section 9D of the Act, by holding that attendance of the makers of the said statements could not be obtained for any of the reasons contemplated....
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....nsisted upon reading from such retracted statements in order to persuade the Court to hold that the impugned order of the CESTAT is perverse. According to her the retraction made more than 20 months after the making of the initial statements "would have no effect in the eye of law". She too submitted that the responsibility of ensuring the presence of such persons for cross-examination was of the noticees themselves. 41. What the above submission overlooks is the 'reliability' of such statements. Once it is shown that the maker of such statement has in fact resiled from it, even if it is after a period of time, then it is no longer safe to rely upon it as a substantive piece of evidence. The question is not so much as to admissibility of such statement as much as it is about its 'reliability'. It is the latter requirement that warrants a judicial authority to seek, as a rule of prudence, some corroboration of such retracted statement by some other reliable independent material. This is the approach adopted by the CESTAT and the Court finds it to be in consonance with the settled legal position in this regard. 42. The contention that it is the responsibility of the noticees to p....
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....eceipt of any goods. The said statement cannot be relied on without cross examination of the transporter who has stated that they have transported the goods to the appellants. We further take note of the fact that no evidence has been produced by the Revenue to allege clandestine manufacture/removal of the goods how the goods were manufactured or from where the other raw materials were procured and how clandestine manufacture goods were transported and how the payment on the said goods have been received. In the absence of any corroborative evidence, except the statement of the transporter whose cross examination has not been granted, therefore, denial of cross examination is in the gross violation of the principles of natural justice, the allegation of clandestine removal of the goods is not sustainable. Therefore, in the light of the decision of the Ambika International (supra) and Flevel International (supra) and Vishnu & Co. (supra), the demand on account of clandestine removal of the goods is not sustainable. Accordingly, the same is set aside. 16. We also take note of the fact that in the case of Kuber Tobacco India Ltd. (supra), this Tribunal has examined the issue in para ....
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....articular facts of that case where existing material was held to be insufficient to sustain the adjudication order. Besides, I find that the request in that case was for remanding the matter to the CESTAT and the Hon'ble Court had held in the facts of the case that there should be a practice to introduce persons for cross examination. 20. In the facts of the present case, I find that instead of going by presumption or assumption whether witnesses would be available or would present themselves, it would be appropriate to give chance to adjudicating authority to follow the provisions of Section 9D ibid and meet its requirements. The adjudicating authority would also follow the tenets of natural justice including dealing with requests for cross examination and give fair opportunity to appellant to defend their case. After the procedure of Section 9D ibid has been followed, the adjudicating authority would pass a reasoned and speaking order in the matter in accordance with law. Devender Singh Member (Technical) 21. As there are difference of opinion between the Members, therefore, the matter is referred to the the Hon'ble President to appoint third Member to resolve the following....
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....Section 9D of the Act. The Ld. Member (T) further held that the case of Flevel International (supra) is not applicable in the facts and circumstances of the case at hand, on account of presumption or assumption as to whether witnesses would be available or would present themselves, therefore, he concluded that a chance needed to be given for the compliance of provisions of Section 9D of the Act. 6. With this background, I find that the reference in confined to only one point whether in the present case the observations held by the Ld. Member (J) is correct or whether that of Ld. Member (T)? 7. Before deciding the issue, it would be appreciated to provisions of Section 9D of the Act, which are as under: "Section 9D in The Central Excises And Salt Act, 1944 9D. Relevancy of statements under certain circumstances. (1) A statement made arid signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains,- (a) when the person who made the statement is dead or cannot be fou....