TaxTMI 
TaxTMI 
2017 (2) TMI 1424
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....ose penalty without being subjected to cross-examination. (2) Whether provisions of Section 9D of Act, 1944 which is specifically meant for prosecution, is in any way contradictory to Section 14 of Act, 1944." 5. Facts, in brief, giving rise to present appeal may be stated as under. 6. M/s. Premier Alloys Ltd., B-54 and 55, UPSIDC, Industrial Area, Malwan, District Fatehpur (hereinafter referred to as the "assessee") is manufacturer of MS Bars chargeable to Central Excise Duty under sub-heading 7213.90. On receipt of information that assessee is clearing MS Bars, manufactured by them, clandestinely, by removing the same under the invoices issued by various traders, and, goods so removed clandestinely are being transported to consignee by certain transporters; officers and Directorate General of Central Excise Intelligence, on 15-7-2002, searched following premises : (i) Factory premises of assessee at Fatehpur (U.P.); (ii) Office premises of assessee at Plot No. 17, Fazalganj, Kanpur; (iii) Residential premises of the Directors, Sri Ajay Kumar Jain and Sri Naveen Jain; (iv)....
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.... issue Central Excise invoice in favour of trader whose bill was accompanying the said consignment and such Central Excise invoice was subsequently produced before concerned officer of Central Excise Department for release of the goods. 9. From the premises of dealer, Sri Subhash Agarwal, father of Vimal Agarwal, Proprietor, M/s. V.K. Traders, Kanpur, few sale invoices of assessee, trading bills of traders and also blank letterheads of M/s. V.K. Steel Traders, Kanpur and M/s. Prabhu Jyot Steel, Kanpur were found. 10. In the course of search of residential premises of M/s. Kulbhushan Jain, blank bill books of M/s. Manoj Kumar Manish Kumar, Kanpur; M/s. Prabhujot Steel, Kanpur; M/s. Expert Agriculture Udyog, Kanpur; and M/s. Sunder Iron Manufacturers, Kanpur (all trading firms), were recovered. 11. Statement of Sri Kulbhushan Jain was also recorded on 15-7-2002 and 18-7-2003, under Section 14 of Act, 1944. He stated that he was one of the faithful employee of Ajay Kumar Jain, Director of assessee and M/s. Premier Ispat Ltd. and the bill books had been given to him by Sri Ajay Kumar Jain for safe keeping; that the loose slips recovered from residential premises are t....
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..../- found short at the time of officers' visit to the factory and Cenvat credit of Rs. 1,04,542/- on 67.36 M.T. of MS Ingots found short at the time of Officers' visit to the factory, along with interest on this amount at the applicable rate under Section 11AB of Act, 1944; (b) Recovery of Central Excise duty amounting to Rs. 21,62,449/- on 1196.045 M.T. of MS Bars valued at Rs. 1,35,15,308/- alleged to have been removed without payment of duty as per the records of the transport companies, along with interest on this duty at the applicable rate under Section 11AB of Act, 1944; (c) Imposition of penalty on assessee under Section 11AC of Act, 1944; and (d) Imposition of penalty on Sri Ajay Kumar Jain, Director, assessee under Rule 26 of Central Excise Rules, 2001 (hereinafter referred to as the "Rules, 2001"). 17. Additional Commissioner, Central Excise (hereinafter referred to as the "ACCE") adjudicated above show cause notice vide order dated 23-10-2007 and confirmed duty/Cenvat credit demands as per show cause notice along with interest under Section 11AB. It also imposed penalty of Rs. 25,76,526/- on a....
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.... the order confirming duty demand based on their statements would not be sustainable has erred in law inasmuch as mere fact that cross-examination was not allowed would not render otherwise evidenciary value and admissibility of statement recorded under Section 14 for the purpose of proceedings under Act, 1944, inadmissible. In support of submission, Sri Seth placed reliance on a Division Bench judgment of Bombay High Court in Patel Engineering Ltd. v. Union of India, 2014 (307) E.L.T. 862, whereagainst appeal was dismissed by Supreme Court on 7-8-2015 after condoning delay in Patel Engineering Ltd. v. Union of India, 2015 (323) E.L.T. A73 (S.C.). 24. We have given our anxious but deep consideration to above submission and also perused carefully relevant statutory provision. The broad principle is that statement recorded under Section 14 of Act, 1944 is admissible as a relevant piece of evidence but not as a sole self proved document in absence of some corroboration. The bald proposition as sought to rely by Revenue cannot be accepted inasmuch as such statement has to be seen, whether it is by assessee or Controlling Authority of assessee or by some third person or by persons....
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....reof Adjudicating Authority proceeded and decided matter. It is in these circumstances Court held that there was no prejudice to assessee by not permitting cross-examination of Panel members. Court specifically recorded finding in para 13 that Tribunal referred to only that material which was produced by assessee. This is evident from following : "13. In the facts of the present case, we find that the Tribunal's order does not refer to anything except the material produced by the assessee itself...." (emphasis added) 29. In Para 14, Bombay High Court observed, as a matter of fact, that Expert panel included representatives of assessee and said opinion of Expert panel was taken on record. This is evident from following : "14. It is in these circumstances and when the dispute was raised with regard to the other material and contents of these certificates relied upon that it was decided by the department to form an expert panel. That also included the representatives of the assessee. The opinion of the expert panel, after examination, was taken on record. After conclusion of this, show cause notice was issued and impugned order was passed."    &emsp....