Excise Duty Demand for Clandestine removal based on Third Party Evidence: CESTAT quashes Demand for want of Cross-Examination [Read Order]

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi presided by Mr. Anil Choudhary, Member (Judicial) has held that excise duty demand for clandestine removal based on third party evidence and quashed Demand for want of cross-examination.

The Assessing Officer demanded central excise duty along with interest and imposed a penalty on the appellant, M/s Shri Shyam Ingot & Castings Pvt. Ltd., based on information gathered during the search conducted in M/s Pankaj Ispat Limited, for clandestine removal of MS Ingots.

The aggrieved appellant filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) dismissed the appeal alleging that the Director of M/s PIL Sh. Pankaj Agarwal has accepted the receipt of inputs – M.S. Ingot from this appellant both duty paid and non-duty paid. Thus, the appellant filed an appeal before the CESTAT.

The counsel for the appellant submitted that the revenue initiated proceedings against the appellant based on a third party record and the statement of Mr. Pankaj Agarwal, Director of M/s PIL. It has no evidentiary value, as the assessing officer in the adjudication proceeding did not examine him. Thus, the provision of Section 9D of the Act is violated. Further, the counsel submitted that the show cause notice is bad for nonjoinder of parties - M/s PIL and its Director are essential in the proceedings, who have not been joined in the show cause notice. Thus, the whole proceedings are vitiated, hence prayed to set aside the impugned assessment order.

The Tribunal while allowing the appeal observed that third party record and the statement of the Director of M/s PIL cannot be used against the appellant both for non-joinder of the parties and also a failure on the part of Revenue to examine Mr. Pankaj Agarwal as its witness in the adjudication proceedings.

Mr. Bipin Garg and Ms. J. Kainaat appeared on behalf of the appellant and Mr. Ms. Tamanna Alam appeared on behalf of the respondent.

To Read the full text of the Order CLICK HERE

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