Judgment:
1. In the common order impugned in these appeals, the Commissioner has found that each of these persons paid duty on the plastic injection moulding machines that they manufactured and cleared by underdeclaring the capacity and dimensions and by not including in the value of goods the cost of free parts supplied along with the goods, confirmed the demand for duty issued to them and imposed penalties.
2. The contention of the common Counsel for the appellants with regard to Polymech Plast Machines Ltd. is this. In the course of the proceedings before the Commissioner, the appellant had asked for, and had been granted, permission to cross-examine its managing director, personnel manager and accounts manager, whose statements were relied upon in the show cause notice. Cross-examination of these persons concluded on 20-3-1996. In the submission filed on 29-3-1996, the appellant had requested for a personal hearing. The Commissioner has passed this order without according an opportunity. He relies upon the decision of the Tribunal in Sawant Food Products Ltd. v. CC - 1999 (111) E.L.T. 943.
3. In this decision, the Tribunal had explained that in a situation where cross-examination of witnesses is asked for and granted, the party had to be heard after such cross-examination concluded. Only then can the party present evidence in the proceedings which are taken place. The party could not have also raised other aspects of the case.
It therefore, set aside the order of the Commissioner of Customs. In the facts of this case also, we think that this appellant has not been given an opportunity of hearing. This appellant had appeared before the Commissioner only on 3-1-1996 and 20-3-1996 and on both these occasions, proceedings limited to cross-examination of witnesses.
Therefore, the appellant had been denied proper opportunity to present evidence including evidence, if any, obtained as a result of the cross-examination to the Commissioner. The order of the Commissioner therefore will have to be set aside. The Commissioner's order relating to this appellant is set aside. The appeal is allowed and the matter sent to the Commissioner for granting hearing and deciding the appeal after hearing the appellant. We have made it clear to the Counsel that the proceedings before the Commissioner will be limited to a hearing at which the appellant may present its arguments and material gathered so far in the course of cross-examination.
4. The contentions with regard to the other two appellants are these.
Hearing was not granted to these two firms. The statements of K.R.Bhuva, in his capacity of partner of Plastico and director of Plastomech Equipments Pvt. Ltd., admitting contraventions were retracted by him and therefore cannot be relied upon.
5. It is not disputed that these two assessees did not file reply to the show cause notice or asked for hearing. The provisions of Section 11AC of the Act do not provide any hearing to be granted without it being asked on the notice under that Section. Counsel for the appellant is not able to advance before us any argument or cite any judgment which impel us to conclude that in a situation in which the assessee had not even replied to the show cause notice, let alone on asked for a hearing, the hearing must be thrust upon him. Therefore, we do not find this to be a valid claim. The statements of K.R. Bhuva were recorded on four occasions on 4-6-1993, 17-6-1994, 18-6-1994 and 14-11-1994. In each of these statements he had accepted that the machinery had been undervalued. In his affidavit affirmed on 4-6-1993, 18-6-1994, 21-6-1994 and 15-11-1994, he had retracted the admission made by him.
The ground for retraction is that he was compelled to sign the statement under duress. In the first affidavit, he mentions that he was threatened with arrest, if he failed to do so. The other three affidavits do not refer to any threat or inducement.
6. It would be clear from the facts above that the department must have become aware of these affidavits. Bhuva's statements contain the admissions on four occasions. Now in this situation, if there was in fact a threat on the first occasion of arrest if he failed to give the statement, it is reasonable to conclude that if he retracted his statement he would have been arrested. The fact remains that he was not arrested. It is therefore difficult to accept that he was in fact threatened with arrest. After all, the nature of the duress during the other three occasions is not specified. Nor is there existence of circumstances which would inherently suggest compulsion or force by the departmental officers. The examination of the circumstances does not impel us to conclude that the statements were not voluntary. About 20 customers who bought the goods of the appellant had in their statements confirmed before the officers that the machines that were received were of different capacity and dimensions which were shown in the invoice or contract. They have also confirmed the receipt of spare parts along with the machines. Vikas Madan, the sales manager of these three appellants at Delhi had also confirmed in his statement that the goods that he supplied, installed and serviced were of different capacity than shown. The contention of the Counsel for the appellant that buyers of the goods admitted that they paid extra money over and above the contracted price for supply of the goods may be correct. However, this fact by itself does not take precedent over the admissions made with regard to seizure of the goods. It is not necessary for the department to establish before it can be concluded that appropriate duty was not paid on such goods. There is no such requirement in law and evidence in each case must be examined. The totality of the evidence in this case does not impel us to conclude that the case made out by the department is wrong to the extent of probability.
7. We, therefore, do not find any ground to interfere in the Commissioner's order with regard to these two appellants.