2021 (9) TMI 1107

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....000/- imposed on Kamal K. Singhania under Rule 26 of the Central Excise Rules, 2002 as also Rs. 1,00,000/- imposed under Rule 26 of the Central Excise (No.2) Rules, 2001/Central Excise Rules, 2002 read with Rule 209A of the Central Excise Rules, 1944. 2. Whether CESTAT is right in law in i) setting aside central excise duties of Rs. 4,16,73,971/- and Rs. 2,17,005/- levied under section 11A(2) of the Central Excise Act, 1944 on account of clandestine removal of processed fabrics. ii) reducing equal penalty imposed under section 11AC of the Central Excise Act, 1944 from Rs. 4,30,85,195/- to Rs. 3,00,000/- inspite of confirming / sustaining central excise duty of Rs. 11,94,219=20. iii) setting aside find/penalty of Rs. 4,28,68,190/- imposed under section 34 of the Central Excise Act, 1944 and Rule 25(1) of the Central Excise (No.2) Rules, 2001 / Central Excise Rules, 2002 read with Rule 173Q(1) of the Central Excise Rules, 1944. iv) setting aside fines of Rs. 8,00,000/- and Rs. 90,000/-imposed under section 34 of the Central Excise Act, 1944 being an option given to pay find in lieu of confiscation. v) setting aside interest levied....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....facturers. The statements of many persons were recorded. 6. Based on the above, proceedings were initiated against the respondents by issuing show cause notices. Show cause notice dated 15/11/2002 proposed confiscation of the seized goods and show cause notice dated 30/03/2004 proposed confirmation of demand of duty of Rs. 4,30,85,194.84 along with imposition of personal penalty. The following demands were raised in the show cause notice dated 30/03/2004. "(i) processed fabrics found short in the factory during stock verification carried out on 21/22-05-2002 (involving duty of Rs. 11,94,219.20) (ii) processed fabrics seized from the premises of Merchant Manufacturers and transporter (involving duty of Rs. 2,17,004.64), and (iii) processed fabrics detailed in Annexure 'B' to the show-cause notice as clandestinely cleared by M/s. Indo Green (involving duty of Rs. 4,16,73,971.00)" 7. After due adjudication proceedings, the demand stood confirmed and various penalties were imposed. All those aggrieved by the order passed by adjudicating authority filed Appeal before the Customs Excise and Service Tax Appellate Tribunal (CESTAT). At the stage of ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....CESTAT with the assistance of the learned counsel for the appellant. The entire basis for making this demand on respondent no.1 and for imposing penalty on respondent no.3 is the statement of Thakkar indicating that one 'S One Tex/Dying' relates or belongs to respondent no.2. Before the adjudicating authority, counsel for respondent nos. 1 and 2 had sought leave to cross examine Thakkar which was denied by the Commissioner on the ground that the same amounts to delaying tactics on the part of respondent nos. 1 and 2. The majority view has concluded that as the entire case of the Revenue is based upon the statement of Thakkar, refusal of his cross examination was detrimental to the case of respondent nos. 1 and 2 and therefore Thakkar's statement cannot be taken into consideration. We also feel that if the statement of Thakkar is taken out of records, there is no other evidence to show that the said code number 'S One Tex/Dying' belongs to respondent no.2. The statement of Thakkar being in the nature of statement of co-accused cannot be made a sole basis for confirming the charge of clandestine removal against respondent no.2 and its director in the absence of an....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ng Authority in passing the orders, the Tribunal [2006 (205) E.L.T. 831 (Tribunal)] rejected its plea in the following manner :- "6. The plea of no cross-examination granted to the various dealers would not help the appellant case since the examination of the dealers would not bring out any material which would not be in the possession of the appellant themselves to explain as to why their ex-factory prices remain static. Since we are not upholding and applying the ex-factory prices, as we find them contravened and not normal price as envisaged under section 4(1), we find no reason to disturb the Commissioners orders." 6. According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statement....