TaxTMI 
TaxTMI 
2024 (11) TMI 397
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....excise duty paid MS Scrap, which he claimed to have procured from various source manufacturers including from M/s Gopal Industries, Bhilai. However, M/s Gopal Industries, Bhilai informed that they had not issued any excise Invoices to M/s Labh Hi-Tech Metal, thus there is no question of any duty paid MS Scrap having been procured by M/s Labh Hi-Tech Metal and its further sale to M/s Mittal Ceramics, who had taken Cenvat credit of duty shown to have been paid by source manufacturer. The appellant took Cenvat credit of Rs. 5,20,512/- on the strength of five dealer's sale invoices of duty paid MS Scrap issued by M/s Labh Hi-Tech Metal during the month of Nov., 2016, showing procurement of aforesaid duty paid MS scrap from source manufacturer namely M/s Gopal Industries, Bhilai, which is liable to be recovered from them along with interest. As per the Investigation officer, M/s Mittal Ceramics had taken Cenvat credit in a fraudulent manner on the strength of fake bills of M/s Labh Hi-Tech Metal showing purchase of MS Scrap without actually receiving the same. Accordingly, a show cause notice was issued to the appellant no.1 for recovery of inadmissible Cenvat credit along with inte....
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....s on the basis of valid invoices and the material was also received physically which was used in their furnace for manufacturing goods and the said goods were cleared on payment of duty. He further submits that before both the authorities, the appellant prayed for cross-examination of those witnesses on the basis of which the entire case has been built but that cross-examination was refused without any cogent reason. He further submits that the cross-examination was rejected by the Commissioner on the basis of a judgment of the Hon'ble Supreme Court in the case of Kanungo & Co. Vs Collector of Customs, Calcutta and Others - 1983 (13) ELT 1483 (SC). He further submits that this decision is not applicable in the facts and circumstances of this case because this judgment was delivered prior to the introduction of Section 9D of Central Excise Act. He further submits that the jurisdictional High Court of Punjab & Haryana, in the case of Jindal Drugs Pvt. Ltd. Vs UOI- 2016 (340) ELT 67 (P&H), has categorically held in Para 19 that it is mandatory to allow the cross-examination of the material witnesses whose statement is relied upon against the assessee. Learned Counsel further submits t....
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.... acceptable as it was incumbent upon the Adjudicating Authority to follow the provisions of Section 9D of Central Excise Act, 1944. We find that the provisions of Section 9D of Central Excise Act, 1944 are as follows: "Section 9D. Relevancy of statements under certain circumstances- (1) A statement made and 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 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 or expense which, under the circumstances of the case, the Court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shal....
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.... Act. The use of the word "shall" in Section 9D(1), makes it clear that, the provisions contemplated in the sub-section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. 18. The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the Gazetted Central Excise Officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudicating authority, as, in such an atmosphere, there would be no occasion for any trepidation on the part of the witness concerned. 19. Clearly, therefore, the stage of relevance, in adjudication proceedings, of the statement, recorded before a Gazetted Central Excise Officer during inquiry or investigation,....
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.... was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which ....