Shri Aditya Kumar Jain, Proprietor vs Cce, Kanpur

Excise Appeal No. 979 of 2006 with Misc. Application No. 55115 of 2013 and

Excise Appeal Nos. 980-984, 1012-1014, 1102-1104 of 06

[Arising out of the Order-in-Original No. 7/Commr/MP/2005 dated 22/12/2005 passed by The Commissioner of Central Excise, Kanpur.]

For Approval and signature :

Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

1. Whether Press Reporters may be allowed to see :

the Order for publication as per Rule 27 of the

CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of :

the CESTAT (Procedure) Rules, 1982 for

publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair :

copy of the order?

4. Whether order is to be circulated to the :

Department Authorities?

M/s Benara Automotives (P) Ltd. ]

Shri Rajesh Benara ]

Shri Mukesh Benara ]

M/s Benara Valves Ltd. ]

Shri Rajesh Benara ]

Shri Mukesh Benara ]

Shri Aditya Kumar Jain, Proprietor ] Appellant

Shri Ajay Kumar Jain, Proprietor ]

M/s Benara Automobiles Pvt. Ltd. ]

Shri Mukesh Jain, Senior Sales Manager]

M/s Agro Machinery Company ]

Shri Ajay Kumar Jain, Proprietor ]

Versus

CCE, Kanpur Respondent

Appearance

Shri A.K. Jain, Advocate  for the appellant.

Shri Ranjan Khanna, Authorized Representative (DR)  for the Respondent.

CORAM: Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

Final Order No. 52446-52457/2015 Dated : 04/08/2015

Per. Ashok Jindal :-

The appellants are in appeals against the impugned orders wherein demand of duty has been confirmed against M/s Benara Automotives (P) Ltd. and M/s Benara Valves Ltd. alongwith interest and equivalent amount of penalty is also imposed. The co-appellants are before us for imposition of penalty.

2. Revenue has also filed an application for early hearing of the appeals.

3. As the appeals are listed today itself for final disposal, therefore, application for early hearing of appeals become infructuous, accordingly the same is disposed of as infructuous.

3. The facts of the case are that the main appellants i.e. M/s Benara Automotives (P) Ltd. in short BAPL and M/s Benara Valves Ltd. (BVL) are the manufacturers of bearing and bushes. An inspection was conducted during the month October 2003 in the premises of the appellants, nothing incriminating was found, simultaneously inspection was made to the some of the dealers/buyers of the appellants, wherein certain documents were seized which are named as Estimates and Order Form. The statement of the dealers were recorded, on the basis of the documents seized and statements further investigation was conducted at the end of the appellants wherein statement of various persons of the appellants were recorded and on the basis of those statements, documents revealed from the buyers and their statements, the show cause notices were issued to the appellants alleging clandestine removal of finished goods from their factory under the guise of Order Form and Estimates. The appellants contended before the Adjudicating Authority that they have not provided the relied upon documents, therefore, they are not able to defend their case efficiently. The appellants were directed to inspect the records. Appellants inspected the records and there after sought cross-examination of the persons whose statement has been relied upon by the authorities below while issuing show cause notice. The Adjudicating Authority turned down the request of cross-examination of the appellants on the ground that, it will prolong the adjudication and adjudicated the matter after considering the defence reply filed by the appellants by confirming the demand proposed in the show cause notices alongwith interest and equivalent amount of penalty on BAPL and BVL and penalties on various co-appellants were also imposed. Aggrieved from the said order, the appellants are before us.

4. The learned Counsel for the appellant submits that the appellant were not provided relied upon documents initially and only allowed the inspection. He further submits that the appellants sought cross-examination of the witnesses whose statements relied upon by the Adjudicating Authority and the same has also not been granted, therefore, there is a gross violation of principal of natural justice. On this count, these appeals are to be allowed and impugned orders to be set aside. He further submits that if at all allegation of admission in the statement of Shri Mukesh Benara is to be taken on record then also the demand works out to only Rs. 11,000/- approximately and the same is to be taken into account with their clearances, then also their total turnover will remain below the SSI exemption limit, therefore, no duty can be demanded from them. He also submits that as no cross-examination has been granted to them in that case the statements relied by the Adjudicating Authority have no relevance, therefore, the impugned order to be set aside on that ground only and there is no reasons to remand the matter to the Adjudicating Authority for denovo adjudication. To support the contention, the learned Counsel relied upon the following judgments :-

(i) M.G. Shahani & Co. (Delhi) Ltd. vs. CCE, New Delhi reported in 1994 (73) E.L.T. 3 (S.C.) ;

(ii) Dimple Overseas vs. CC, Kandla reported in 1995 (80) E.L.T. 10 (S.C.) ;

(iii) Bhagwati Oil Mills vs. CST reported in [1977] 39 STC 222 (All) ;

(iv) Duggal Bricks Supply Company vs. CST reported in [1989] 72 STC 343 (All).

5. On the other hand, learned AR opposed the contention of the learned Counsel and submits that apart from the statements, this case has been booked against the appellants on the basis of documents resumed from the dealers/buyers of the appellants. Certain documents were produced before the Authorised Representative of the appellants who admitted his signature/ initials thereon. Therefore, the statements of the buyers corroborates that all these documents seized from the possession of the buyers and all the documents issued by the appellants only. Therefore, the appellants cannot take the defence wherever their initials are there, those documents belongs to them and remaining are not their documents. Therefore, no cross examination is required at this stage.

6. Heard the parties considered the submissions.

7. In this case the certain documents has resumed from the third party and statements of third parties have been recorded. The case has been made out by the Revenue on the basis of the document resumed from the third parties and corroborative statement of those parties as well as to some extent the statement of Shri Mukesh Benara and the Shailender Kumar Singhal, Senior Sales Officer of BAPL. It is admitted fact that appellants sought cross examination of the third parties whose statements has been relied by the Adjudicating Authority but the Adjudicating Authority has not granted cross examination which is in gross violation of principal of natural justice as held by Honble High Court of Delhi in the case of Basudev Garg vs. Commissioner of Customs reported in 2013 (294) E.L.T. 353 (Del.), J & K Cigarettes Ltd. vs. Collector of Central Excise reported in 2011 (22) S.T.R. 225 (Del.). The contention of the learned Counsel is that as the cross examination of the persons whose statements have been relied upon by the Adjudicating Authority has not been given in that circumstances the statements of those persons are not reliable therefore impugned order be set aside is not acceptable to the extent that impugned order be set aside and appeal be allowed. In fact, the learned AR also contended that some of the documents recovered from the premises of the buyers have been countersigned by Shri Mukesh Benara and the learned Counsel during the course of argument have also admitted, the same. Therefore for fair trial, the matter requires cross examination of the person whose statements have been relied upon by the Adjudicating Authority. With these observation, we are of the view that after setting aside the impugned order, the matter should go back to the Adjudicating Authority for fair trial with the direction to the Adjudicating Authority that the Adjudicating Authority shall grant opportunity of cross examination of the witnesses/persons whose statement have been relied upon and from whom the documents have been recovered during the course of investigation. After granting cross examination, the Adjudicating Authority shall consider the defence reply of the appellants and thereafter shall pass an appropriate order in accordance with law after affording an opportunity to hearing of the appellants to present their case. Appeals are disposed of in the above terms.

(Dictated and pronounced in open court)

(Ashok Jindal)

Member (Judicial)

(B. Ravichandran)

Member (Technical)

PK

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