The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) confirmed seizure of unaccounted gutka and observed that no mens rea in tax matters as non-compliance with statutory provisions is sufficient.
The search of the said 4 godown premises resulted in seizure of raw materials for manufacture of gutkha and some quantity of manufactured gutkha in loose condition. Notably, the search party also found an assortment of packing material bearing the name of the appellant and several other gutkha manufacturers such as Yogesh Associates, Silvassa, Anand Tobacco Products, Thane, Sunrise Food Products to name a few, which showed that the raw material etc. which were not being used were stored in the godown.
The main contention of the learned counsel for the appellant is violation of the provisions of section 9D of the Central Excise Act, 1944, leading to non-compliance of the principles of natural justice. He relied on the Circular No. 1053/2/2017 – CX, dated 10.3.2017 to say that where a statement is relied upon in the adjudication proceedings, it would be required to be established through the process of cross examination, if the noticee makes a request for cross examination of the person whose statement is relied upon in the show cause notice.
The Revenue on the other hand has supported the findings arrived at by the authorities below and relied on several judgements to say that if the party alleges absence of cross examination of the statements, they need to show what prejudice has been caused and there is no absolute right of cross examination.
A Single Member Bench of the Tribunal comprising Binu Tamta, Judicial Member observed that “The impugned order holding that the excise duty amounting to Rs. 21,48,030/ is recoverable in terms of proviso to section 11A(1) along with interest under section 11AB and penalty under section 11AC of the Act and also the Gutkha seized from the four godowns is liable for confiscation needs to be affirmed.”
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