Denying the opportunity to cross examine is against the principles of natural justice.

Case:- GUJARAT CYPROMET LTD. VERSUS COMMISSIOENR OF C. EX., AHMEDABAD

Citation:- 2013(289) E.L.T. 467 (Tri.-Ahmd.)

Brief Facts:-Three appeals and stay petitions have been filed against the impugned Order-in-Original No. 23/Commissioner/RKS/AHD-II/2008, dated 28-11-2008 (First case for short) and 14 appeals and stay petitions have been filed against the Order-in-Original No. 22/Commissioner/RKS/AHD-II/2008 dated 19-11-2008 (Second case for short). Out of the 14 appeals and stay petitions, appeal and stay petition filed by M/s. New Mallik Transport Co. was listed for hearing on 10-8-2009 but no one appeared on behalf of the appellant. This stay petition is also taken up for disposal with other applications.

The main party in all the above cases is M/s. Gujarat Cypromet Limited. The issue involved is also the same namely availment of Cenvat credit on the inputs which were not received by the appellants in their factory. In the first case, the findings of the Commissioner is that the appellants did not receive the imported inputs and in the second case it was the indigenous inputs. Since the issue involved is same and the main party is also same, both the cases are taken together and a common order is being passed on the stay petitions filed by the appellants.

In the first case, the Commissioner has found that the appellants had availed Cenvat credit to the tune of Rs. 77,51,0611 wrongly without receiving the imported inputs cleared from ICD Tughlakabad, with interest as applicable. He also imposed equal amount of penalty under Section 11AC and equal amount of penalty under Rule 25 of Central Excise Rules. He also imposed a penalty of Rs. 25 Lakhs on the Director and penalty of Rs. 10 Lakhs on Shri Navratan Lal Sharma, proprietor of M/s. Singhal Road Carrier. In the second case, demand of Rs. 1,79,45,801/- being wrongly availed Cenvat credit with interest as applicable has been made and the Commissioner has imposed penalty of equal amount under Section 11AC of Central Excise Act, 1944. He has also imposed penalties on the Director, Transporters and Employees of M/s. Gujarat Cypromet and also on other persons.

Appellant Contentions:-The appellant submitted that principles of natural justice have not been observed at all by the Commissioner. The appellants had requested for cross-examination of the transporters in the first case, which was rejected without any valid grounds. Appellants had requested cross-examination of 19 persons involved in the second case who are mainly drivers, transporters, Directors of suppliers, employees of suppliers, etc., which was also not allowed. He submits that since whole case of the department is based on the statements of various persons, the rejection of request for cross-examination has resulted in injustice being met out to the appellants and therefore, requested that stay petition may be allowed and matter be remanded back to the adjudicating authority for fresh decision after affording opportunity for cross-examination of the persons. He also submits that no valid reasons have been given by the Commissioner for rejecting the request for cross-examination. He also submits that in the first case, they had submitted that goods could have been transported without passing through Shamlaji check post but Commissioner has not considered this aspect at all. In this connection, he drew our attention to the cross-examination details of Shri Atul Sharma, Manager of Singhal Road Carrier, Ahmedabad conducted before the adjudicating authority in another case on 15-10-2008, wherein Shri Atul Sharma stated that if the goods are transported Via Dungarpur, Modasa, Shamlaji check post is by-passed. He also submits that department has not produced any evidence to show that the inputs have been sold in the market other than stating that the same has not been received in the factory. Further, he also submitted that appellants have been manufacturing finished goods by using the raw material received by them and have cleared the same on payment of duty. The question how the appellants could manufacture the finished goods without receiving the raw materials on which they taken Cenvat credit, has not been considered/answered by the Revenue anywhere in both the adjudicating proceedings.

Shri Hardik Modh, learned advocate on behalf of Shri Sanjay B. Hundia submitted that the appellant is doing the business of shroff and he has taken the permission of RBI for this purpose. During the course of his business he has discounted 12 cheques of M/s. Gujarat Cypromet Limited and issued the cheques in lieu of cheques produced. It is his submission that this is a regular business activity. He also submits that such service is required in view of the fact that appellant is able to issue cheques in places wherever bank is located which saves expenditure for the persons who come to them by way of collection/discount charges for outstation cheques levied by the banks. Further, he also submitted that as per the decision of Larger Bench of the Tribunal [2007 (217) E.L.T. 506 (Tri.-LB)1, no penalty is imposable under Rule 26 of Central Excise Rules if the person has not dealt with the excisable goods.

Respondent Contentions:-The respondent submits that the request for cross-examination has been rightly rejected by the Commissioner in view of the facts that statements have not been retracted and further inculpatory statements were recorded from the Director and employees of the company. Further, he also submits that in the first case, appellants had simply requested for cross-examination of the transporters without indicating the names of the persons whom they would like to cross-examine and without giving details of the persons. Further, he also submits that in both the cases, department has established the vehicle numbers indicated by the appellants as either non-existent or relating to the vehicle which could not have been used for transportation of raw material namely re-melted copper ingots/copper wires. Further, in the first case, department has also proved that none of the vehicles entered in the Gujarat state and this is as per the report given by the Transport Department of the State Government. Since the State Government maintains such record of vehicles, the appellant contention that they have taken some other route is also not acceptable. Further, in the first case, department has also shown that the goods were transported to place in around Delhi as admitted by CHA of the appellants and also transporter. Further, one of the transporters in each of the cases was found to be fictitious. In one case the transporter had said that he had not at all issued LRs. Further, in the second case, the department has shown that P.S. Alloys, one of the suppliers had neither purchased the raw material nor manufactured finished goods during that period. Statement of the owner of the premises taken on rent by M/s. P.S. Alloys shows that P.S. Alloys had never manufactured any goods in the premises and raw material supplier to P.S. Alloys has categorically stated that he never supplied any goods. Another unit, M/s. Annapurna lmpex, who was supposed to be supplier of the goods to the appellants has been found to have never sold such goods as per the report given by the Government of Punjab. He submits that the department has made out a very strong case against the appellants.

Reasoning of Judgment:-We have considered the submission from both parties and perused the record, we find that the appellant had not even given the names of persons whom they would like to cross-examine in their letter dated 9-10-2008. Appellants had simply stated that they would like to cross-examine the transporters, where as it is not one transporter who is involved in transportation of goods. Further, the record of personal hearings in the first case in respect of personal hearings held on 9-10-2008 reproduced by the Commissioner in his order, reads as follows; "Shri Paresh Seth, advocate appeared for personal hearing today. It was pointed out by him that no reply to show cause notice has been submitted by the noticee till date. He was directed to submit their written submissions by 13-10-2008 positively. He was also asked to submit vakalatnama." This has been signed by the ld. Advocate also. This clearly shows that claim made by the learned advocate that in spite of written request made by them, Commissioner did not allow cross-examination, is not correct. In the second case, appellants have requested for cross-examination of 19 persons but a detailed reply was given to the appellants explaining that cross-examination cannot be allowed and Commissioner has also given detailed reasoning. In any case, we find that the following evidences available which in our opinion show that prima facie the claim of the appellants that principles of natural justice have not been observed does not appear valid :-

            In the First Case:
(i) The CHA has admitted that goods were transported only to the places in or around Delhi.
(ii)Transporters have admitted that they have not transported goods.
(iii)Gujarat State Government has reported that none of the transporter have entered in the Gujarat State.
(iv)Most of the vehicles were found unfit for transporting the goods for which they are supposed to have been transported.
(v)One of the transporters has been found to be fictitious.
(vi)Commissioner has also discussed the evidences available in respect of each and every bill of entry and has also covered all the bills of entry while dealing with the claim of appellants
In the Second Case:
(i) Owner of the premises who had rented out his premises to M/s. P.S. Alton one of the suppliers has stated clearly that during the period of one year, the premises was rented to the supplier, at no time he saw any manufacturing activity and no machinery or equipment was installed. He has also stated that he had visited the premises several times.
(ii)The payment made to M/s. P.S. Alloys have been in cash and the Shri Sanjay B. Hundia has been used to collect the amount in cash.
(iii)The supplier of raw materials whose invoices were produced by M/s. P.S. Alloys has stated that he has never supplied any goods to M/s. P.S. Alloys.
(iv)The transporters who were supposed to have transported the goods from M/s. P.S. Alloys to the appellants premises have stated that they have never done so.
(v)One of the transporters is found to be fictitious.
(vi)Further, on verification, the types of vehicles were found to be two wheelers, Scooters, Motor Cycles, Maruti, etc.
(vii)           Further, the Director of P.S. Alloys never responded to the summons after the departmental officers recorded statements of suppliers of raw materials to them.
(viii)          As regards, Annapurna Impex, the Commissioner has found that they were engaged in the drawing of copper wires and there was no facility to manufacture ingots or copper wire rods. They also did not have melting furnace in their factory.
(ix)The Director of the Annapurna lmpex never responded to the summons and did not produce any document.
(x)Nodal Information Collection Centre of Excise and Taxation of Govt. of Punjab has reported that no goods in respect of M/s. Annapurna Impex had been transported out of Punjab State during the said period and the supplier had not reflected any sales outside Punjab in their sale tax returns submitted to Sales Tax Department.
(xi)In this case also, out of 21 vehicles, 10 vehicles were found to be Motor Cycles, Scooters, Motor cars and two vehicle's numbers were found to be non-existent and in respect of remaining vehicles, no report has been received. The owner of the vehicles who could be located have stated that their vehicles are incapable of transporting the goods. Shri Sher Singh, Manager of M/s. Bombay Patiala Transport has stated that the bilties were bogus. Shri Kulvinder Singh Proprietor of M/s. New Satkar Tempo Transport Union had stated that he had given bilties to an employee of M/s. Annapurna lmpex for Rs. 50/- each.
(xii)           Gujarat Government has reported that none of the 21 vehicles had entered in the Gujarat State.
The observations made above shows that the department's case is not on the basis of mere statements but on the detailed investigation and recording of evidences and documents. Therefore, the contention of the appellants that principles of natural justice are not observed is unacceptable. The evidences discussed above when considered along with the statements of all the parties concerned which have been recorded show that appellants have not been able to make out a prima facie case in their favour. On the other hand, Revenue has made out a strong case. Therefore, the main appellant M/s. Gujarat Cypromet has to be put into requirement of pre-deposit. As regards the Director Shri Mihir Choksi and the other employees of the appellant, their case will be considered at the time of final hearing and therefore, since we are going to require the main appellant to make deposit, at this stage they would not be required to make any deposit. As regards the other appellants, since no goods have been transported, prima facie penalty is not imposable under Rule 26, as claimed by them, in the light of Larger Bench decision of the Tribunal in the case of Steel Tubes of India Limited - 2007 (217) E.L.T. 506 (Tri.-Larger Bench). Whether they are liable to penalty or not, will have to be decided during final hearing but the requirement of pre-deposit in their case has to be waived in view of the decision cited above.

As regards, quantum of pre-deposit, the appellants have claimed financial hardship on the ground that company had been referred to BIFR. However, the latest balance sheet and Annual return have not been submitted. The facts of the case and the findings of the Commissioner show clearly that appellants made only paper transactions and no inputs were received. We note that in the case of Nay pad Textile Industries Limited v. UOI - 2009 (234) E.L.T. 394 (Guj.) Hon'ble Gujarat High Court observed as under :-
"6. The Tribunal in its impugned order has recorded the submission of the petitioner that their company had been declared a sick industrial undertaking by the BIFR and has accumulated losses of over Rs. 16 crores. After considering the submissions and the grounds of appeal, the Tribunal has held that the department has a strong prima facie case against the petitioner. The        Tribunal has observed that in a prima facie case of clandestine removal like the present case, showing losses appears to be nothing unusual. After recording the aforesaid findings the Tribunal has directed the petitioner to deposit a sum of Rs. 50 Lakhs, which is approximately 50% of the duty amount. In the background of the facts and findings recorded by the Tribunal. It is apparent that the Tribunal has addressed itself to the issue of financial hardship as well as the fact that the petitioner has been declared a sick industrial unit by the BIFR and has therefore, directed pre-deposit of only 50% of the duty demand. In the circumstances, the contention advanced by the learned Counsel for the petitioner that the Tribunal has not addressed itself to the issue of the petitioner having been declared as a sick industrial unit by BIFR does not merit acceptance.

7. The main plant of the submission advanced by the learned Counsel for the petitioner is that the petitioner having been declared a sick industrial unit by the BIFR, the Tribunal ought to have granted full waiver of the pre- deposit. By an order of even date passed in Special Civil Application No. 2968 of 2008, this Court has considered a similar issue and has after considering the claim of the petitioner therein in the light of the decisions on which reliance had been placed by the learned Counsel for the parties, upheld the impugned order of the Tribunal whereby the petitioner therein was directed to deposit part of the duty amount. Though a distinction was sought to be drawn in the present case, on the ground that specific averments were made in the application for waiver and that the balance sheet for the relevant period had also been annexed, in effect and substance the controversy involved in both the petitions is the same. In the circumstances, the present case is squarely covered by the said decision."

By taking note of this decision of the Hon'ble Gujarat High Court and also facts and circumstances of the case as discussed above and the fact that the Company has indulged in fraudulent activities prima facie, we order that deposit of Rs. 40 Lakhs as pre-deposit in the first case and Rs. 90 Lakhs in the second case as pre-deposit under Section 35F of the Central Excise Act, 1944 be made within eight weeks from the date of pronouncement of this order. Subject to pre-deposits of above amounts, recovery of balance amount of duty, interest and penalties imposed upon the appellants M/s. Gujarat Cypromet Limited and the Director, Shri Mihir Choksi and Shri Navratan La! Sharma shall be stayed. The requirement of pre-deposit on the other appellants is waived under Section 35F of the Central Excise Act, 1944 and stay is granted during the pendency of appeals. Al! the stay petitions are disposed of in the above manner. Appellants, are required to report compliance on 1940-2009.
As, the other member does not agree with the above order, a separate order is passed.

The appellants have strongly contended that as the entire case of the Revenue is based upon the statements of CHA, transporters and other persons, their request for cross-examination of the deponents should have been accepted by the adjudicating authority. As the adjudicating authority has not given any valid reasons for denial of such request, the impugned order should be held to have been passed in gross violation of principles of natural justice and the matter should have been remanded.

The first member has held that the appellant's claim of violation of natural justice does not appear to be valid, inasmuch as there is ample evidence on record to arrive at findings against them. However, on going through such evidences, as reproduced in the order, it is found that they are more or less in the shape of statements of either CHA or transporters or statement of the owner of premises, where M/s. P.S. Alloys was shown to have been functioning and the statements of the supplier of the raw materials. As such, it is the statement of various persons, which stand relied upon by adjudicating authority. It is well settled that, when the statement of a third person or co-accused is being relied upon, it is essential for a fair trial to test the veracity of the same by cross-examination. Mere reliance by the adjudicating authority on various decisions, where such cross-examination was held as not essential, by itself is not sufficient inasmuch as the request for cross-examination has to be viewed and examined in the context of the facts and circumstances and evidences available in that particular case. As in the present case, the Revenue's reliance are based primarily on statements of transporters, their request should have been properly examined by the adjudicating authority. The observations made by the first member that the appellants in their letter dated 9-10-2008 made a request for cross-examination of transporters whereas, it is not one transporter who is involved in the transportation of the goods. Merely because the appellants have not given the detailed list of the transporters giving names of each and every deponent, should not be made the basis for denial of cross-examination to them.

It is also noted that the Commissioner has recorded in his impugned order that the personal hearing was fixed on 11-9-2008 but nobody appeared for hearing and nor any adjournment request was received. However, it is found that the appellants vide their letter dated 5-9-2008 had reiterated that as the documents have not been supplied to them, the date of personal hearing fixed on 11-9-2008, may be postponed. It is further noted that even on 30-9-2008 the appellants did not appear before Commissioner. As such, the fact remains that the impugned order stands passed by the Commissioner without hearing the appellants in person, which is against the very basic principle of fair trial. Nobody can be convicted without affording reasonable opportunity of personal hearings to them. The impugned order was passed by the Commissioner on 28-11-2008 i.e. after a period of two months from the date of last hearing fixed on 30-9-2008 and as such he could have granted another date for the appellant to appear in person during this period.

It is also noted that in identical matters this Bench has been taking a constant stand that where cross-examination of transporters have not been granted, the matter have been remanded. Reference in this regard is made to the Tribunal's decision in the case of Metal Gems & 8 Others vide Order No. A/1485- 1509/WZB/AHD/2008 dated 1-8-2009.

No reason is found to discriminate the present appellant from the other appellants similarly situate. Even if there is other evidence on record to uphold the findings of adjudicating authority, the fact that the principles of natural justice have been violated, is sufficient for the impugned order to be set aside. It is also observed that, where even the impugned order is passed by the adjudicating authority without affording opportunity of personal hearing, the matters are being remanded, even though there may be sufficient evidence against the appellant to come to a conclusion against them. As such, without going to the merits of the case, impugned order is liable to be set aside on the ground of violation of principles of natural justice and the matters need to be remanded for de novo consideration after observing principles of natural justice.

DIFFERENCE OF OPINION
Whether M/s. Gujarat Cypromet Limited should be directed to deposit an amount of Rs. 40 Lakhs and Rs. 90 Lakhs in terms of Section 35F of Central Excise Act, 1944, as held by learned Member (Technical) or all the stay petitions have to be allowed unconditionally and the matters to be remanded for fresh consideration after following the principles the natural justice.
The registry was directed to place the above difference of opinion before the Hon'ble President for nomination of Third Member to decide the difference. Hon'ble President in his order dated 10-8-2010 has directed the Bench to reformulate the difference of opinion by observing that two Members cannot refer the entire appeal because of difference of opinion instead of making a statement referring the point or points of difference between them. Accordingly, the difference of opinion is being reformulated as under:-
DIFFERENCE OF OPINION
(i) When the impugned order stands passed by the Commissioner without actually hearing the appellant in person and when there was no detailed reply filed by the appellant, whether the principles of natural justice can be said to have been violated, requiring the impugned order to be set-aside and appeal to be remanded, as observed by Member (Judicial) or the same were not relevant for the purpose of stay petition so as to direct the appellant to deposit an amount of Rs. 40 Lakh as a condition of hearing of their appeal, as observed by Member (Technical).
(ii)Whether the appellant's request for cross-examination was required to be allowed by the Commissioner or not.
(iii)Whether the statements of various persons can be said to constitute sufficient evidence so as to come to a prima facie findings against the appellant or veracity of the same were required to be tested by the tool of cross-examination.
(iv)Whether the precedent decision in the case of M/s. Metal Gems and Others, remanding the matter for cross-examination of the transporters etc., is required to be followed, as observed by Member (Judicial).
(v) Whether the appellant M/s. Gujarat Cypromet Limited & Others, is required to deposit an amount of Rs. 40 Lakhs and Rs. 90 Lakhs, as a condition of hearing their appeal, as directed by Member (Technical) or the stay petition has to be allowed and matter is required to be remanded for fresh consideration with directions to follow the principles of natural justice, as observed by Member (Judicial)

This Difference of Opinion was listed before the third member as per orders of Hon'ble President for deciding the points of difference arose between the Bench while deciding the appeals No. Application No. E/S/263/2009 in Appeal No. E/268/2009.
Following Difference of Opinion are indicated :-
(i) When the impugned order stands passed by the Commissioner without actually hearing the appellant in person and when there was no detailed reply filed by the appellant, whether the principles of natural justice can be said to have been violated, requiring the impugned order to be set aside and appeal to be remanded, as observed by Member (Judicial) or the same were not relevant for the purpose of Stay Petition so as to direct the appellant to deposit an amount of Rs. 40 lakhs as a condition of hearing of their appeal, as observed by Member (Technical)?

(ii)Whether the appellant's request for cross-examination was required to be allowed by the Commissioner or not?
(iii)Whether the statements of various persons can be said to constitute sufficient evidence so as to come to a prima facie findings against the appellant or veracity of the same were required to be tested by the tool of cross-examination?
(iv)Whether the precedent decision in the case of M/s. Metal Gems & Others, remanding the matter for cross-examination of the transporters etc. is required to be followed, as observed by Member (Judicial)?
(v)Whether the appellant M/s. Gujarat Cypromet Ltd. & others is required to deposit an amount of Rs. 40 lakhs and Rs. 90 lakhs, as a condition of hearing their appeal, as directed by Member (Technical) or the Stay Petition has to be allowed and matter is required to be remanded for fresh consideration with directions to follow the principles of natural justice, as observed by Member (Judicial).
Ld. Counsel appearing on behalf of the appellant would take me through the conclusions arrived at by ld. Member (Judicial). It is his submission that the facts of the current case and the facts in the case of Metal Gems & Others - 2008 (88) RLT 849 (CESTAT-Ahmd) are identical. It is also his submission that subsequently on an identical issue, in similar facts and investigation, in the case of NICO Extrusions Pvt. Ltd. - 2009 (248) E.L.T. 497 (Tri.-Ahmd.) and in the case of Dhakad Metal Corporation & Others - Final Order Nos. A/144-146/WZB/AHD/ 2012, dated 19-1-2012, this Bench of the Tribunal has been remanding the matter back to the adjudicating authority to reconsider the request of cross-examination of the persons who have given statements implicating the appellant. It is his submission that non-granting of cross-examination of the person on whose statements the adjudicating authority has relied upon is denial of natural justice. It is his submission that the cross-examination is very much required as the persons who have implicated the appellant are third parties and the statutory records maintained by the appellant clearly indicate that the statements given by such persons are contradictory. It is his submission that in order to prove the appellant's claim that they have correctly availed the Cenvat credit on the inputs which were received and consumed by them, the cross-examination of the persons asked for by them in their reply to Show Cause Notice is very vital. It is his submission that in one case, the adjudicating authority has not granted the cross- examination, while in another case, the adjudicating authority has given reasoning to the effect that such cross-examination is not required at all as the case of the Revenue is built upon various corroborative evidences. He would also submit that the coordinate Bench of the Tribunal in the case of Harika Resins Pvt. Ltd. - 2010 (253) E.L.T. 108 (Tri.-Bang.) and in the case of Self Knitting Works - 2009 (238) E.L.T. 105 (Tr-Mum.), held that cross-examination should be granted if the evidence is relied upon by the adjudicating authority is of third party.

Ld. SDR, on the other hand, would submit that the facts of the case relied upon by the ld. Counsel in the case of Metal Gems & Others and in the case of NICO Extrusions Pvt. Ltd. are different than the facts in this case. It is his submission that in the case of NICO Extrusions Pvt. Ltd. as well as Metal Gems & others, there was a specific request for cross-examination of the individuals and in those cases, the evidences that were relied upon were mainly on the statements. It is his submission that in the case in hand, there is clear-cut evidence inasmuch as in one case, the appellant did not bother to reply to the Show Cause Notice and the appellant's advocate on the date of personal hearing, was directed to file the reply and vakalatnama and on such direction, the appellant sought cross- examination of the transporters. It is his submission that there is a lack of bona fide in the appellant's request for cross-examination as he did not file any reply to the Show Cause Notice and was evading the summons issued by the Department to bring out the correct facts. It is also his submission that in this case, the appellant's directors were shown the various statements and the said Directors have agreed that such statements are true. It is his submission that this factual difference would make a strong case against them inasmuch as the director has agreed before the authorities as to non-receipt of the inputs. It is his submission that the appellant should not be allowed to take the benefit of the delay attributable to their action. It is his submission that on this factual difference, the decision of this Tribunal in the case of Metal Gems & Others is distinguishable. It is also his submission that the cross-examination is not given and in another case, a detailed order has been passed by the adjudicating authority for non-granting of cross- examination. It is his submission that the adjudicating authority's reasonings are correct in not giving cross-examination.

In rejoinder to the submissions made by ld. SDR, the ld. Counsel would submit that it is incorrect to say that the appellant has not given the names of the persons for cross-examination. It is his submission that in one case, wherein the appellant had sought cross-examination of the transporters, there were only 10 transporters and the appellant had sought the cross-examination of all the transporters as the adjudicating authority has heavily relied upon the statements given by them to hold that the appellant had not received the inputs on which the Cenvat credit has been availed. It is also his submission that the statements of the Directors on which the ld. SDR has been relying upon also include the question wherein the answer of the director was the entries indicated in the statutory books are true and correct. It is his submission that when the statement of the director itself has been relied upon by the adjudicating authority, the portion indicating the receipt and consumption of the inputs and recording of the same in statutory records should also be held as true and correct.

Ld. SDR relies upon the decision of Hon'ble Supreme Court in the case of Surjeet Singh Chhabra v. L101 - 1997 (89) E.L.T. 646 (S.C.), and submits that the cross-examination of the witnesses can be allowed where the petitioner has confessed non-allowing of cross-examination is not violative of principles of natural justice.

The third member has considered the submissions made at length by both sides and perused the records. On perusal of the records, the third member finds that the adjudicating authority, in both the cases, has relied upon the various evidences to come to a conclusion that the appellant has availed in-eligible Cenvat credit as the inputs which were indicated in the duty paying documents, never moved to the appellant's factory premises. It is also seen that the adjudicating authority has relied upon the statement of the CHA who has admitted that the goods were transported only to the places in or around Delhi, transporters who have admitted that they have not transported the goods and most of the vehicles were found unfit for transporting the goods and one of the transporter has been fictitious. The adjudicating authority has also relied upon the evidences of the statements of the owners of the premises who had rented his premises to one of the supplier and stated that during the relevant material period, the premises which were rented out was not having any manufacturing activity or no machinery or equipments were installed and the supplier of the raw material to such supplier of the materials to the appellant has never supplied any material and that the type of the vehicles were found to be two wheeler motor cycles, etc.

In his considered view, the issue in this case is identical to the issue in the case of Metal Gems & Others (supra). The facts which are relevant in this case and in that case are more or less similar or identical and the inputs involved in this case is also Copper ingots which were used for Copper pipes/flats/tubes and the issue is denial of Cenvat credit of the CVD paid on the ingots which were imported and cleared from ICD Tughalakabad and on the ground that copper ingots were not actually received by the assessee. It was found that the relevant facts that were produced in Paragraphs 2 & 3 of the judgment in the case of Metal Gems & Others (supra) and the submissions made by the ld. SDR in that case, which are recorded in Para 4, are identical to the case in hand before him for resolving the difference of opinion between the two ld. Members.

It is also found that identical sets of facts were in the case of NICO Extrusions Pvt. Ltd. (supra). In both these cases, the Bench has clearly held that the statements of the transporters, owners, owners of the vehicles, drivers and CHAs who have given inculpatory statements against the assessee, should be made available for cross-examination and it is also held that there were many statements which were inculpatory, in his view, the ratio of the said two cases in identical sets of facts would cover these cases also. He also find strong force in the contentions of the ld. Counsel that the director of the company has recorded in his statement that the statutory records indicate the true and correct entries as regards receipt and consumption of the goods. He finds that in the cases of Dhakad Metal Corporation & Others (supra), Self Knitting Works (supra), Harika Resins Pvt. Ltd. (supra) (wherein he was one of the Member), in identical sets of facts, the coordinate Bench of the Tribunal, has remanded the matter back to the adjudicating authority at the stay stage itself by directing the lower authorities to allow the cross-examination of the persons as sought for by the assessee.
In his view, the charges of availment of Cenvat credit without receipt of the inputs are serious allegations which cannot be held as correct without adequate/cogent evidences and it is also imperative that the witnesses be cross- examined to bring the truth on record as to how they have stated that the goods were never transported to the appellant.

In his view, the Revenue's case in both these sets of appeals is mostly based upon the statements recorded of various persons and not on any corroborative evidences, as has been claimed. In view of the foregoing, in his considered opinion, the conclusion reached by the ld. Member (Judicial) in these cases is correct and he concur with the same. Registry is directed to place the file before the Bench for further action. In view of the majority decision, all the stay petitions are allowed and the matter remanded for fresh consideration, after following the principles of natural justice.

Decision:-Appeal allowed by way of remand.

Comment:- It can be concluded from this case that the denial of cross objection is a serious violation of the principles of natural justice when the statements of certain persons are the sole basis of levelling the charges against the assessee.

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