In a recent judgement, the Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that non-supply of DSA and lack of opportunity for cross-examination proves a gross violation of the natural justice principles and set aside the order demanding excise duty.
M/s Gopi Biri Factory challenged the Order-in-Appeal dated 19.06.2018 passed by the Commissioner (Appeals) of CGST & Excise, Siliguri. The Department has also filed a Memo of Cross Objection in the impugned appeal along with an application for condonation of delay, which was allowed by this Tribunal on 20.07.2022.
The appellants were issued a show-cause cum demand notice for the manufacture and storage of 20,13,500 sticks of biris found in excess as of 2nd September 2009 without accounting for the same in the Daily Stock Account. The Department alleged that the noticee had cleared 1,41,000 sticks of biris from its factory on 22.11.2009 without issuing any invoice and without reflecting production and clearance of the same in their Daily Stock Account.
Based on investigations undertaken by the Department, it was alleged that the appellants had clandestinely manufactured and cleared 13,34,36,375 sticks of handmade branded biris from its factory between January 2007 to September 2008 without issuing any Central Excise Invoice and without accounting for the same in their official records.
The Departmental proceedings issued a show-cause notice demanding Excise duty to the tune of Rs.19,38,504/- [Basic Excise Duty = Rs.10,83,852/-, NCCD = Rs.1,33,441/-, Biri Cess = Rs.6,67,186/-, Education Cess = Rs.37,693/- & SHE Cess =Rs.16,332/-] besides proposing confiscation of seized goods, imposition of penalty and demand for interest under relevant provisions of law.
The Adjudicating Authority had given three specific dates to appear before the adjudicating authority by way of one single communication. The appellant had submitted that they have been denied an opportunity to defend themselves and not handed over the requisite records like, DSA/ER-I in Form RG-12A Register that was seized by the Central Excise Officers on 2nd September 2009.
The charge of clandestine clearance is required to be proved beyond an iota of doubt and by irrefutable evidence. A tangible, sufficient and corroborative piece of evidence is necessary to establish the charge of clandestine manufacture and clearance.
A Single member bench comprising of Mr Rajeev Tandon,(Technical) observed that the twin facets of non-supply of certain records more particularly DSA inform RG-12A and the lack of opportunity of cross-examination of the witnesses are in clear violation of legal principles rendering the impugned order unsustainable. The Court set aside the impugned order and allowed the appeal of the assessee.
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