Punjab Laminates Vs. Collector of Central Excise

Punjab Laminates vs Collector of Central Excise

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi Decided Dec 20, 1990

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Citation: sooperkanoon.com/6156
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi
Judge: V T K.S., S Peeran, B T N.K.
Decided On: Dec 20, 1990
Subject: Excise

Case Summary

AI-generated summary - not the official court judgment text.

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Punjab Laminates

Respondent

Collector of Central Excise

Legal References

Reported In: (1992)(38)LC473Tri(Delhi)

Excerpt

.....because it is found that the appeal itself requires to be remanded for failure on the part of the authorities to comply with the principles of natural justice. taking up the appeal, it is seen that the facts briefly are that the appellants manufacture laminated sheets. on 12.11.1988, the departmental officers visited their factory and found on verification of records certain shortage in a grade laminated sheet in the finishing room and excess in 'a', 'b' and 'c' grades. the goods found in excess were seized for action under central excise rules. in a letter dated 22.11.1988, shri bhupinder singh, the managing director, admitted that the stock of laminated sheets seized on 12.11.1988 had been sorted and placed grade-wise and that the records resumed were those maintained by them.the scrutiny of records revealed, according to the department, that there had been unauthorised removal of 3668 grade 'a' laminated sheets involving duty of rs. 1,75,238.70; that there had clearance of 'a' grade sheets in the guise of 'b'; and a comparison of stock position given in their balance sheet for the period ending 31.3.1988 with central excise rg 1 register showed that the figures relating to 'a' grade sheets and cut pieces entered in rg 1 was less which led the department to believe that these have been clandestinely removed.proceedings were therefore, initiated against the appellants culminating in the order dated 21.2.1990 passed by the additional collector of central excise, chandigarh by which he confiscated the seized laminated sheets levying a fine of rs. 10,000/- in lieu of confiscation; demanded central excise duty of rs. 3,07,840.79 on the goods removed clandestinely; demanded differential duty of rs. 7258.13 on 'a' grade sheets removed as 'b' grade; and imposed a penalty of rs 50,000/- on the appellants.2. appearing for the appellants, shri n.i. mehta, the learned counsel submitted that in this case there has been violation of the principles of natural justice as.....

Full Judgment

1. On hearing the learned Counsel Shri N.I. Mehta, and the learned Departmental Representative, Shri Narasimhamurthy, the Miscellaneous application is allowed and stay granted because it is found that the appeal itself requires to be remanded for failure on the part of the authorities to comply with the principles of natural justice. Taking up the appeal, it is seen that the facts briefly are that the appellants manufacture laminated sheets. On 12.11.1988, the Departmental Officers visited their factory and found on verification of records certain shortage in A grade laminated sheet in the finishing room and excess in 'A', 'B' and 'C' grades. The goods found in excess were seized for action under Central Excise Rules. In a letter dated 22.11.1988, Shri Bhupinder Singh, the Managing Director, admitted that the stock of laminated sheets seized on 12.11.1988 had been sorted and placed grade-wise and that the records resumed were those maintained by them.

The scrutiny of records revealed, according to the department, that there had been unauthorised removal of 3668 grade 'A' laminated sheets involving duty of Rs. 1,75,238.70; that there had clearance of 'A' grade sheets in the guise of 'B'; and a Comparison of Stock position given in their balance sheet for the period ending 31.3.1988 with Central Excise RG 1 Register showed that the figures relating to 'A' grade sheets and cut pieces entered in RG 1 was less which led the Department to believe that these have been clandestinely removed.

Proceedings were therefore, initiated against the appellants culminating in the order dated 21.2.1990 passed by the Additional Collector of Central Excise, Chandigarh by which he confiscated the seized laminated sheets levying a fine of Rs. 10,000/- in lieu of confiscation; demanded Central Excise Duty of Rs. 3,07,840.79 on the goods removed clandestinely; demanded differential duty of Rs. 7258.13 on 'A' grade sheets removed as 'B' grade; and imposed a penalty of Rs 50,000/- on the appellants.

2. Appearing for the appellants, Shri N.I. Mehta, the learned Counsel submitted that in this case there has been violation of the principles of natural justice as the appellants had not been allowed to cross-examine all the witnesses, and also that their detailed final written submissions sent after the personal hearing in February, 1990 had also not been considered by the Additional Collector, although by a telegram dated 17.2.1990 they had intimated the Additional Collector that their final reply to the Show Cause Notice will be submitted on 23.12.1989. The learned Counsel also pointed out that the Show Cause Notice proceed on the footing that the laminated sheets manufactured by them fall under Heading 3920.31 as against the decision already taken by the Assistant Collector in his Orders dated 24.5.1989 and 20.4.1989 that the goods were classifiable under sub-heading 4823.90 subsequently, following CEGAT decision in the case of Amit Polymers & Composites v. Collector of Central Excise 1989 (12) ETR 350 : 1989 (20) ECR 454 Cegat SB-C. It was, therefore, pleaded that the appellants should be given full opportunity of defence and their detailed reply to the charges ought to have been considered by the lower authority.

3. Shri Narasimhamurthy learned Departmental Representative pointed out that a perusal of the Order-in-Original would show that the appellants had been offered personal hearing on seven occasions and the witnesses whose cross examination they are seeking were their own employees whom they could have themselves produced for examination and moreover, they had cross examined the seizing officer and the panchnama witness. There has thus been sufficient compliance with the principles of natural justice.

4. The submissions made by both the parties herein have been carefully considered. Regarding denial of cross examination of witnesses it is seen that in their letter dated 26.6.1989 the appellants have given a list of witnesses needed for cross examination and have also stated reasons why it is required. It includes the Managing Director whose statement has been cited in the Show Cause Notice and which has also been relied upon in the impugned order; the excise clerk of the appellants who is a signatory to Annexure 'B' of panchanama; the security men who maintain the gate book which is among seized documents. In such circumstances, it is reasonable to hold that the cross examination sought for ought to have been allowed. No doubt these persons are appellants' employees and they could have ensured their presence, and, in the hearing before the Tribunal the learned Counsel agreed that they could do so. Therefore, in the interest of justice the cross-examination of these persons should be allowed by the adjudicating authority limited to only these persons, and the appellants in that event should also ensure that the witnesses are produced and should cooperate in ensuring that the proceedings are completed expeditiously. I will also be in the interest of justice in such a situation for the adjudicating authority to consider the detailed final reply stated to have been sent by them in February 1990 filed as Annexure 'D' in the paper book. In this view of the matter, the appeal is allowed by remand in the above terms for affording opportunity of cross examination and to consider the appellants' detailed defence in accordance with law and after hearing the appellants in the matter.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Delh... Same Parties Punjab Laminates vs Collector of Central Excise Same Subject Excise Same Judge V T K.S., S Peeran, B T N.K.