TaxTMI 
TaxTMI 
2025 (10) TMI 728
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....hat the appellant is engaged in trading of sponge iron. It also has a manufacturing unit. The appellant's Trading Unit is independent and has a different location and separate registration for the purpose of its trading activity. The appellant's Trading Unit is registered as a First/ Second Stage Dealer having registration no. AAFCS1323MED 002. It has separate VAT Tin bearing no. 20851907835. For the purpose of trading activity, the appellant purchased sponge iron and other items from the manufactures as first stage dealer and sells it to other manufacturers in accordance with law. 2.1. In its usual course of business, the appellant bought sponge iron, etc., from the registered dealers and sold it to M/s. Globe Steel & Alloys Pvt. Ltd. (hereinafter referred to as 'GSAPL'). The appellant raised corresponding invoices mentioning therein the details of the purchase made by it. The appellant delivered the goods to the buyer through the vehicles which were duly received by the buyer, M/s. GSAPL. 2.2. The appellant purchased the goods from the sellers viz. M/s. Bajrang Steel Coal & Coke Traders and others. The appellant availed CENVAT Credit after purchase of goods and at t....
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.... M/s. Geetham Steels Pvt Ltd Vs. Commissioner of GST & Central Excise Salem [2025 (3) TMI 1098 - CESTAT Chennai]. They have also relied on the decision of the Principal bench, CESTAT, New Delhi, in the case of M/s. Surya Wires Pvt. Ltd. Vs. Principal Commissioner, C.G.S.T., Raipur vide Final Order Nos. 50453-50454 of 2025 dated 01.04.2025 in Excise Appeal No. 51148 of 2020 [CESTAT, New Delhi]. Reliance has also been placed upon the judgement of the Division Bench of Hon'ble Calcutta High Court in the case of Delta International Limited versus Commissioner of Customs reported in 2012 (281) E.L.T. 400 (Cal.). 3.2. In view of these submissions, the appellant contends that they have not passed on any irregular credit, as alleged, and hence the order of imposition of penalty on them under Rule 26 of the Central Excise Rules is not sustainable. Accordingly, they pray for setting aside the penalty so imposed on them vide the impugned order. 4. On the other hand, the Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order. He submits that the statements recorded from Mr. Manish Narady categorically reveal that the supplier units viz. M/s. Bajrang St....
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....GSAPL has availed CENVAT Credit on the basis of fake invoices. The impugned order has purportedly held that the appellant has passed on irregular credit, on the basis of the information gathered by the Department that certain transportation of the goods by the vehicles said to have been used by certain named suppliers showing delivery of the goods to GSAPL were fictitious. In this regard, we find that the appellant was also one of the suppliers to GSAPL but no vehicle used by the appellant for transportation of goods were part of the list of bogus transportation listed by the investigation. The list of vehicles found to be fictitious are mentioned in paragraph 7.0 of the Adjudication Order (internal page 40) and not a single vehicle used by the appellant has been mentioned therein. We also find that there was no allegation of non-supply of goods to GSAPL on the part of the appellant. All the vehicles used by the appellant were found to be existing and were entered into the records of GSAPL at entry gate with time logging. The charges made against the appellant were formulated in paragraph 20.11 of the adjudication order, which have been reproduced supra, wherein we find that there ....
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....proving the recording of the statement, which statement under section 14 is already considered relevant for the purpose of proving the truth of the fact it contains- that is to say, the said deposition of the Gazetted Officer stating that the deponent had indeed given the statement before him, would be the manner of admitting or mode of proof of the admissible substantive evidence. 58. Again, 9D(1)(b) provides for the deponent's statement given before the Gazetted Officer to be admitted as substantive evidence, when the person who made the statement is examined as a witness in the case before the adjudicating authority and the adjudicating authority is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. This sub section (b) of Section 9D(1) takes care of a situation where the witness who is deposing before the adjudicating authority turns hostile and on an evaluation of the circumstances of the case the adjudicating authority decides to discard the version given by the witness before it and instead place reliance on the earlier statement given before the Gazetted Officer. As elucidated s....
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....ot to place reliance on the statement as per the mandate of Section 9(1)(b) in the circumstances of the case, as has been elaborated supra. This interpretation is also in consonance with the decision of the Honourable Apex Court in K I Pavunny's case as stated supra, wherein the Apex Court emphasised that in the case of a retracted confession the court should examine whether the confessional statement is voluntary; in other words, whether it was not obtained by threat, duress or promise and if the Court is satisfied from the evidence that it was voluntary, then it is required to examine whether the statement is true. Such an interpretation is also in line with the decision of the jurisdictional Madras High Court cited supra and given the parimateria provisions of the Customs Act, 1962, we are of the view that the said interpretation would hold good under the parimateria provisions of Customs Act as well." 6.5. The above issue has also been examined by the Principal Bench, CESTAT, New Delhi, in the case of M/s. Surya Wires Pvt. Ltd. Vs. Principal Commissioner, C.G.S.T., Raipur vide Final Order Nos. 50453-50454 of 2025 dated 01.04.2025 in Excise Appeal No. 51148 of 2020 [CESTAT, N....
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....elevant, for the purpose of proving the truth of the facts contained therein. 16. Section 90 of the Act came in from detailed consideration and examination, by the Delhi High Court, in J.K. Cigarettes Ltd. v. CCE, 2009 (242) E.LT. 189 (Del.). Para 12 of the said decision clearly holds that by virtue of sub-section (2) of Section 90, the provisions of sub-section (1) thereof would extend to adjudication proceedings as well. 22. If none of the circumstances contemplated by clause (a) of Section 9D(1) exists, clause (b) of Section 9D(1) comes into operation. The said clause prescribes a specific procedure to be followed before the statement can be admitted in evidence. Under this procedure, two steps are required to be followed by the adjudicating authority, under clause (b) of Section 9D(1), viz. (i) the person who made the statement has to first be examined as a witness in the case before the adjudicating authority, and (ii) the adjudicating authority has, thereafter, to form the opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. 23. There is no justifica....
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....in the adjudication proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice. 26. In fact, Section 138 of the Indian Evidence Act, 1672, clearly sets out the sequence of evidence, in which evidence-in-chief has to precede cross-examination, and cross-examination has to precede re-examination. 27. It is only, therefore, - (i) after the person whose statement has already been recorded before a gazetted Central Excise Officer is examined as a witness before the adjudicating authority, and (ii) the adjudicating authority arrives at that the a conclusion, for reasons to be recorded in writing, statement deserves to be admitted in evidence, that the question of offering the witness to the assessee, for cross-examination, can arise. 28. Clearly, if this procedure, which is statutorily prescribed by plenary parliamentary legislation, is not followed, it has to be regarded, that the Revenue has given up the said witnesses, so that the reliance by the CCE, on the said statements, has to be regarded as misguided, and the said statements have to be eschewe....
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....authority followed by the opinion of the adjudicating authority then the statement should be admitted. The said provision in the statute book seems to have been made to serve the statutory purpose of ensuring that the assessee are not subjected to demand, penalty interest on the basis of certain admissions recorded during investigation which may have been obtained under the police power of the Investigating authorities by coercion or undue influence. 9.5 The provisions contained in Section 9D, therefore, has to be construed strictly and held as mandatory and not mere directory. Therefore, unless the substantive provisions contained in Section 90 are complied with, the statement recorded during search and seizure operation by the Investigation Officers cannot be treated to be relevant piece of evidence on which a finding could be based by the adjudicating authority. A rational, logical and fair interpretation of procedure dearly spells out that before the statement is treated relevant and admissible under the law, the person is not only required to be present in the proceedings before the adjudicating authority adjudicating authority is obliged under the law to examine him ....
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....cquire relevance only when they are, in fact, admitted in evidence, by the adjudicating authority and, if the affected assessee so chooses, tested by cross-examination. We may, in this context, reproduce, for ready reference, Section 1388 of the Act, thus: A Division Bench of this Court has, speaking through A.K. Sikri, J. (as he then was) held, in 3 & K Cigarettes Ltd. v. Collector of Central Excise [2009 (242) E.L.T. 189 (Del.)] that, by virtue of sub-section (2), Section 1388(1) of the Act would apply, with as much force, to adjudication proceedings, as to criminal proceedings. We express our respectful concurrence with the above elucidation of the law which, in our view, directly flows from Section 138B(1) of the Act or, for that matter, Section 90 of the Central Excise Act, 1944, 77. The framers of the law having, thus, subjected statements, recorded under Section 108 of the Act, to such a searching and detailed procedure, before they are treated as relevant in adjudication proceedings, we are of the firm view that such statements, which are yet to suffer such processuall filtering, cannot be used, straightaway, to oppose a request for provisional re....