CX - In case where demands are proposed to be confirmed only on basis of few statements, it is incumbent upon adjudicating authority to extend cross examination of relied upon witnesses before deciding issue - Matter remanded: CESTAT
By TIOL News Service
KOLKATA, OCT 14, 2015: THE CX officers had visited the factory of the appellant in October 2008 and on verification found that there existed no machinery/raw material for the alleged manufacture of Transformers.
Statements were recorded of the Works Manager as well as the job workers and finally a SCN came to be issued to the appellant assessee for recovery of allegedly irregularly availed CENVAT credit.
The CCE, Kolkata-V denied the CENVAT credit of Rs.4.27 crores and imposed penalties on appellant as well as Directors and the Works Manager. This was in March 2011. Incidentally, the appellant had sought cross examination of the Works Manager as well as the job workers but the same was not provided by the adjudicating authority.
In the first round of appeal proceedings, the CESTAT had vide its order of November 2013 directed the appellant assessee to deposit 25% of the dues confirmed.
Against this order, the appellant had filed a Writ Petition and the Calcutta High Court by its order of January 2014 while quashing the order and remanding the matter to the Tribunal observed -
| "It is no doubt true that Tribunal cannot base its finding by adopting pick and choose method relating to the statements made by the persons. The evidence and/or statements should be read as a whole and , thereafter, the authorities must record their findings. It appears that the Tribunal has picked those portion of the statements which may lead to presumption against the petitioners; without referring and/or recording sequel of statements which, if read as a whole, would have resulted in another opinion and/or finding. Furthermore, there is no recording of the reasons by the Tribunal either for imposition of 25% of the duty or waiver of 75% thereof. The Tribunal must record such findings and in absence of proper reasons this order cannot stand." |
The appeal was heard recently.
It was strongly argued by the appellants that except the statements of Raju Das , Works Manager and some job workers, there is no other corroborative evidence to suggest non-receipt of inputs in the factory premises of the appellant.
The AR submitted that cross-examination of the various witnesses asked by the appellant was not required as none of the witnesses have retracted the statements given during the investigation.
The CESTAT took up the appeal itself for disposal and observed -
"It is observed from the case records that the case is made only on the basis of statements of Shri Raju Das, Works Manager of the appellant and few job workers. It is now legally accepted that in a case where demands are proposed to be confirmed only on the basis of few statements, it is incumbent upon the adjudicating authority to extend cross examination of the relied upon witnesses before deciding the issue. In the present proceedings, appellants sought for the cross examination of the Works Manager and the job workers which was turned down. In the interest of justice, we are of the opinion that adjudicating authority should make effort in granting cross-examination of the relied upon witnesses and, thereafter pass a reasoned order in this case."
In fine, the Order-in-Original dated 29/3/2011 was set aside and the case was remanded to the adjudicating authority for de novo consideration after allowing the cross-examination of the witnesses which appellants have sought.
(See 2015-TIOL-2200-CESTAT-KOL)
