By TIOL News Service

CHENNAI, SEPT 30, 2017: THE CESTAT [2017-TIOL-1308-CESTAT-MAD] had held thus -

CX - Allegations that appellant cleared cone yarn in the guise of hank yarn through fabricated evidences to claim tax exemption - original authority denying exemption - Exercise made by Commissioner (A) shows that he made threadbare examination of material facts and evidence - When question of delivery of goods is examined, it is noticeable that transport used were found to be false and enquiry revealed from transport authority that vehicles were two wheelers but not four wheelers, those were incapable to carry the goods - Entire chain of action, evidence proved that there was no clearance of hank yarn to grant any exemption to assessee: CESTAT

The appellant is before the Madras High Court challenging this order on the ground that it is cryptic and non-speaking one and overlooks material evidences.

Miscellneous application was also filed seeking permission to raise the following additional questions of law -

1. Whether the principles of preponderance of probabilities applies to establish clandestine sale of cone yarn as hank yarn or the doctrine of proof beyond all reasonable doubt applies in adjudication proceedings under the Central Excise Act, 1944 as the same is quasijudicial proceedings.

2. Whether in the absence of witnesses, whose statements were the basis of show cause notice, being made available for cross examination in adjudication proceedings, the burden of proving that the Respondent assessee was liable has been discharged.

3. Whether the charges against the Appellant stands proved in the absence of the witnesses, whose statement were the basis of charge, not being available inspite of summons under Sec 40 of the Act issued by the Authorities and the Authorities not taking any positive step to ensure appearance."

The appellant invited the attention of the Bench to the submissions made before the Additional Commissioner of Central Excise and the appeal filed before the CESTAT.

Reliance is also placed on the decision in NGA Steels (P) Ltd. -   2016-TIOL-1516-HC-MAD-CX, which answered a similar question of law, in favour of the appellant therein, and remanded the matter to the tribunal. Also, the decision in Karan Traders  -  2016-TIOL-1411-HC-MAD-CX .

Placing reliance on the decisions cited and after considering the submissions made, the High Court observed -

"16. …, we are of the view that the appellant has made out a case, for interference, on the aspect that the Tribunal has failed to address the issue regarding cross examination of witnesses. Decision in NGA Steels (P) Limited's case [Cited supra], squarely applies to the case on hand and we are inclined to set aside the order impugned in this Civil Miscellaneous Appeal i.e.,  Final Order No.41765 of 2016  dated 28.09.2016, and remand the matter to CESTAT, Madras to consider and record a specific finding, on the issues regarding cross examination, within two months from the date of receipt of a copy of this order, after giving sufficient opportunity to both parties. Additional Substantial questions of law Nos.2 and 3 are answered in favour of the appellant."

The Civil Miscellaneous appeal was allowed, as above.

(See 2017-TIOL-2061-HC-MAD-CX)