TaxTMI 
TaxTMI 
2018 (3) TMI 2016
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....t 1. In all these appeals common question of law and facts are involved hence they are decided by this common judgment. For the convenience of the court the facts are taken from Excise Appeal No.58/2015. 2. By way of these appeals being no.(58/2015, 59/2015, 60/2015, 62/2015, 64/2015, 65/2015, 66/2015), the appellantdepartment have assailed the judgment and order of the tribunal whereby tribunal has dismissed the appeals of the department in appeal no.45/2016 the assessee has challenged the order of the tribunal vide which the tribunal has confirmed the demand partially. 3. This court while admitting the appeals framed following substantial questions of law:- (1) D.B. Central/Excixe Appeal No.58/2015 "(1) Whether it is necessary to give an opportunity of the cross examination to the assessee in absence of any such prayer made in this regard by him and also in view of settled law that the cross examination cannot be claimed by the parties as their legal right in the circumstances where the documentary evidence in itself is available"? (2) Whether the Tribunal is justified in interfering with the finding of facts of Order in Original while making o....
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....umentary evidence in itself is available"? (2) Whether the Tribunal is justified in interfering with the finding of facts of Order in Original while making observations contrary to the record regarding power consumption, clandestine removal and procurement of raw-material"? (6) D.B. Central/Excise Appeal No. 65/2015 "(1) Whether it is necessary to give an opportunity of the cross examination to the assessee in absence of any such prayer made in this regard by him and also in view of settled law that the cross examination cannot be claimed by the parties as their legal right in the circumstances where the documentary evidence in itself is available"? (2) Whether the Tribunal is justified in interfering with the finding of facts of Order in Original while making observations contrary to the record regarding power consumption, clandestine removal and procurement of raw-material"? (7) D.B. Central/Excise Appeal No. 66/2015 "(1) Whether it is necessary to give an opportunity of the cross examination to the assessee in absence of any such prayer made in this regard by him and also in view of settled law that the cross examination cannot be cla....
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....Unit some other incriminating & private records were also recovered from Sh. Murari Lal Sharma and later on placed in a file, were taken into custody by the officers on the spot under a Resumption Memo containing documents/records from S.No.1 to 21. Sh. Murari Lal Sharma, General Manager of the Unit put his signatures on the above recovered records and the Resumption Memo prepared on the spot on 10.9.2005 in his presence. 5. Counsel for the department has relied on the following decisions:- 5.1 In Continental Cement Company vs. Union of India 2014 (309) ELT 411 (All.), it has been held as under:- 11. Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated the following aspects: ....
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....tions certainly involve some assumptions. The first is that the difference of 56 maunds noticed by the Assistant Chemical examiner during the two and quarter hours test conducted by him on May 7, 1957 was uniform for every 2-1/4 hours working throughout the working hours of the crushing season which began on November 4, 1956 upto May 7, 1957 when the test was conducted. 11. If any one of these assumptions breaks down, then the ultimate conclusion will have to be rejected as incorrect. It has to be borne in mind that human element is involved at certain stages of the operations such as time of commencement of the day's working, the rapidity or slowness in feeding cut sugarcane into the crusher and mills, accurately adding the same quantity of water in the crusher and mills, stopping the inflow of mixed juice into the tanks at a uniformly higher level than that indicated by the mixed mark, allowing a uniform time lag between the emptying of the tanks and starting inflow into them again and so on. It is also unsafe to rely on the average of 10.11% of sugar recovery for the entire periods because it involves the assumption that even during the periods when the gross weight of ....
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.... unwarranted assumptions cannot form legal basis for a finding that more juice than what was recorded in the register had gone into the production of sugar. 15. It was however, contended on behalf of the respondent that at the personal hearing given by the Central Board of Revenue, Shri C.M. Dalmia, Assistant Secretary of the Appellant and Shri, J.M. Shah, Superintendent Technologist employed by the Appellant had conceded that there had been "Some erroneous accounting on their part in showing the weight of mixed juice on an average of 7.5 tons and that their only plea was that this was not intentional or deliberate nor did it signify any mala fides on their part. No reliance has, however, been placed upon this confession in the Respondents statement of the case. We may however point out that the gross annual turnover of sugar manufactured in the factory is in the neighbourhood of 12 lakhs of maunds and the amount of excise duty the appellant pays to government runs into about a crore of rupees per annum. It would therefore be a little far-fetched to infer that what happened at the time of the inspection was something more than an error occasioned perhaps by carelessness no....
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....nd uniformly acceptable standard of electricity consumption can be adopted for determining the excise duty liability that too on the basis of imaginary production assumed by the Revenue with no other supporting record, evidence or document to justify its allegations. The Tribunal has also considered the report of Dr. Batra, which has been relied upon for making the allegations that there was higher electricity consumption. It appears that Dr. Batra in his report has observed that for the production of 1 MT of steel ingots, 1046 units electricity required. 4. So far as the various after allegations relating to the fictitious firms and the income from the share trading, the Tribunal recorded the finding that since the incriminating statements of share brokers etc. have been relied upon in the proceedings, it was incumbent upon the Revenue to produce them as well as the investigating officer for crossexamination by the appellants, as was repeatedly requested by them. In the absence of the same, the statements of the share brokers etc. cannot be relied upon. The Tribunal further observed that even if, for the sake of argument, it is accepted that the income shown in the balanc....
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....ould be admitted in evidence in the interest of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a court, as they apply in relation to a proceeding before a court. 14. The Division Bench also observed that though it cannot be denied that the right of crossexamination in any quasi-judicial proceeding is a valuable right given to the accused/noticee, as these proceedings may have adverse consequences to the accused, at the same time, under certain circumstances, this right of cross-examination can be taken away. The court also observed that such circumstances have to be exceptional and that those circumstances have been stipulated in section 9D of the Central Excise Act, 1944. The circumstances referred to in section 9D, as also in section 138B, included circumstances where the person who had given a statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay and expense which, under the circumstances of the case, the court considers unre....
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....of Central Excise vs. Tara Chand Naresh Chand) decided on 6.12.2017 wherein it has been held as under:- 5. Counsel for respondent contended that there is no substantial question of law. It is appreciation of fact and in view ofdecision by this Court reported in 2008 (221) E.L.T. 180 (Raj.), Union of India vs. Jain Plas Pack (P) Ltd., wherein it has been observed as under:- "2. In appeal is the order passes by the Customs Excise and Service Tax Appellate Tribunal dated 3.8.2005 allowing the appeal of the respondent No. 1 by setting aside the demand of Rs. 72,707/- as the duty adjudicated on alleged removal of the fabric from the factory and like amount of the penalty levied by the Adjudicating Officer. 4. The manufacturer's case from the beginning was that the register found during the visit of Excise Authorities in question was not a register maintained for recording production but was a document maintained for the purpose of keeping supervision over the factory workers and on their daily production was entered on estimate basis only. Before entries were made in RG-1 the product was actually weighed and actual weight was entered in RG-1. In support of thi....
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....enalise the petitioner by the imposition of the penalty. He places reliance on certain pronouncements of this Court, which I shall presently refer to. The submission of the learned Counsel for the petitioner that the judgment of the Criminal Court was on merits and on identical facts and charges is tenable because as I could see from the copy of the judgment in the criminal case, there has been a relevant and appropriate consideration of the factual materials, which are identical and in respect of identical charges and the Criminal Court has categorically opinion that the petitioner could not be found guilty of the charges. In D'Silva v. Regional Transport Authority 65 LW 73 , a bench of this Court observed as follows : "We have no hesitation in making it clear that a quasi-judicial Tribunal like the Regional Transport Authority or the Appellate Tribunal therefrom cannot ignore the findings and Orders of competent Criminal Courts in respect of an offence, when the Tribunal proceeds to take any action on the basis of the commission of that offence. Let us take the instance before us. The offence consist in smuggling foodgrains. For that same offence, the petitioner was ....
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....from the order made by the adjudicating authority, before the adjudicating authority, the Assessee had contended that the shortage of fabrics shown in the panchnama was not correct as they had produced the documents to show that the fabrics in question had not been cleared without payment of duty, but the officers who drew the panchnama did not take into consideration their request and did not even physically verify the stocks. Shri Rajnikant Agarwal, Director of the Assessee-Company submitted an affidavit wherein it was clearly mentioned that the stock verification was not conducted physically and was not compared with the recorded balance thereof. It was contended that the statements and panchnama were both recorded forcibly and the factual position of stock was not ascertained. He had, therefore, by affidavit dated 20-7-2003 retracted the facts mentioned in the panchnama and the statements. 9. Thus, all the authorities below viz., the adjudicating authority, Commissioner (Appeals) as well as the Tribunal have concurrently found that except for the statement of the Director of the Assessee Company, Shri Rajnikant Agarwal recorded on 10-7-2003, there was no other evidence....
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.... materials have been purchased. (iii) To find out the dispatch particulars from the regular transporters. (iv) To find out the realization of sale proceeds. (v) To find out finished product receipt details from regular dealers/buyers. (vi) To find out the excess power consumptions. 13. Thus, to prove the allegation of clandestine sale, further corroborative evidence is also required. For this purpose no investigation was conducted by the Department. 14. In the instant case, no investigation was made by the Department, even the consumption of electricity was not examined by the Department who adopted the short cut method by raising the demand and levied the penalties. The statement of so called buyers, namely M/s. Singhal Cement Agency, M/s. Praveen Cement Agency; and M/s. Taj Traders are based on memory alone and their statements were not supported by any documentary evidence/proof. The mischievous role of Shri Anil Kumar erstwhile Director with the assistance of Accountant Sri Vasts cannot be ruled out. 5. Commissioner of Central Excise, Ludhiana vs. Nexo Products (India), 2015 (325) E.L.T. 106 (P&H), wherein it has be....
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.... the department is not sustainable. 9. In that view of the matter, in our considered opinion, the Tribunal has not committed any error in reversing the view taken by the Commissioner Excise. In that view of matter, no substantial question of law arises. However, we make it clear that since no other material was available as per judgment of Allahabad High Court, therefore, we are not interfering. 6.6 He has also taken us to the decision of this court in D.B. Custom Appeal No.2/2016 (M/s. P.G. Foils Ltd. vs. Commissioner of Customs) decided on 20.12.2017 wherein it has been held as under:- "9. Before proceeding with the matter, it will not be out of place to mention that on the cross examination, it is right of the assessee and such request should be made at the very first opportunity when it is available i.e. before adjudicating authority and not after adjudicating authority accepts the report and decides the matter against the assessee. 10. In that view of the matter, three judgments of the Gujarat High Court which have been relied by the counsel for the appellant will not apply in the facts of present case, as the appellant sought cross examination fo....
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....ing with issue in view of the decision of this Court in case of P.G.O. Processors Private Limited vs. Commissioner, C.Ex., 2000(122) E.L.T. 26 (Raj.) the documents which are required to be given to the assessee. It has been observed as under:- "3. The Commissioner of Central Excise, the respondent No. 2, issued a show cause notice on 31.05.1999 to the petitioner and called upon it to show cause as to why the petitioner should not be denied the status of an independent processor as defined in the Notification No. 36/98-C.E. (N.T.) and No. 42/98-C.E. (N.T.) both dated 10.12.1998 in view of the allegations made in the show cause notice dated 15.01.1999. After receiving the first show cause notice dated 15.01.1999, during the pendency of earlier petition itself the petitioner had moved applications dated 18.02.1999, 25.02.1999, 08.03.1999, 12.03.1999, 27.03.1999, 03.04.1999 and 16.04.1999 for obtaining copies of the documents mentioned in Annex. 2 of the show cause notice dated 15.01.1999 as those documents were being relied upon by the department for taking the action proposed in the said show cause notice. The respondents did not allow the request of supply of copies but ins....
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....tion would be a proper substitute for supply of copies was not before the Court. The learned Counsel for the petitioner has also relied on the decision of the Customs, Excise and Gold (Control) Appellate Tribunal in Jayantilal A. Shah and Am. v. Commr. of Central Excise, Mumbai VI [1999 (34) RLT 466 ]. In that case the copies of the relied upon documents were supplied along with the show cause notice. But the copies were illegible and on a complaint made, the assessee was told to inspect the record and take photostat copies. This was not approved by the CEGAT observing that when the Department gives a show cause notice, proposing to initiate action for alleged violation of law, it is the duty cast upon the department to serve legible copies on which reliance is being made by the department for initiating action. In this case, of course the opportunity to inspect the document and take photocopies was not considered to be a proper substitute for supply of legible copies of the relied upon documents. However, since the documents, though illegible, were supplied along with the show cause notice, it was clear that the department also was initially of the opinion that it was necessary to....
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....lloys August 2005 to October 2005 M. P.K. Products August 2005 to October 2005 Everest Rolling Mills August 2005 to October 2005 M/s. Shree Sharma Steel Rolling Mills Pvt Ltd. April 2005 to October 2005 10. The original authority will proceed on merits and document found during search on the basis of documents which are available during search and which are also on record and will not allow any new documents to be relied upon. 11. In the light of above, following directions are issued in all these appeals:- i. The Original Authority will give documents to the parties, if it is not already supplied and not available with the parties. ii. If any statement is to be relied upon and parties are desirous, they will be allowed to cross examine the same. The principles of natural justice will be strictly followed and thereafter, the authority will pass a reasoned order and if any cross examination is not allowed, the authority will pass a reasoned order for not granting cross examination. iii. The parties will appear before the original authority/ Commissioner on 16.4.2018. The Authority will try to complete proceedings within four mont....