PULLICCAR MILLS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) AFTER examining the records and hearing both sides, we are of the view that the appeal itself requires to be finally disposed of at this stage. Accordingly, after dispensing with predeposit, we take up the appeal.

(2.) THE appeal is against the Commissioner's order demanding duty of over Rs. 50 lakhs on Cotton yarn found to have been clandestinely removed by the appellants from their factory during the period from April, 1998 to August, 1999 and imposing on them equal amount of penalty. The finding of clandestine removal of Cotton yarn on Cones is principally based on a statement dated 17.08.1999 of one Shri P. Duraisamy, who introduced himself as Technical Director of the company. In that statement, Shri Duraisamy admitted removal of 2500 kgs. of Cone yarn of 20's count without statutory invoice or payment of duty and also admitted similar clearances said to have been made by the company during the period of dispute. In his statement, he also named some of the brokers and buyers who had allegedly involved themselves in the clandestine transaction. Two private notebooks captioned "Cone Sales Book" were recovered from the factory by the investigating officers. These books were maintained by Shri Duraisamy. In his statement, Shri Duraisamy explained to the investigators the entries made in the above notebooks, wherein names of a few brokers and buyers also figured. The role of these brokers and buyers in the above transactions was also narrated by Shri Duraisamy in his statement. Later on, in April, 2000, an interrogatory was issued to Shri Duraisamy and his answers were noted. Statements were also recorded from numerous buyers and brokers. It was on the basis of these materials that learned Commissioner arrived at the finding of clandestine removal of Cotton Cone yarn by the appellants.

(3.) AFTER hearing both sides and considering their submissions, we find that the appellants had applied for opportunity to cross -examine 18 witnesses (persons from whom statements had been recorded by the investigators) and that 6 of them were cross -examined. Shri P. Duraisamy was among those who were not available for cross -examination. The appellants made a fervent request to the adjudicating authority for arranging cross -examination of Shri Duraisamy inasmuch as the crucial evidence relied on by the department in the show -cause notice was what was staled by him in his statement dated 17.08.1999 and his answers to the questionnaire in April, 2000. Learned Commissioner was also inclined to allow such cross -examination. Accordingly. he fixed a date in May, 2005 for cross -examination of Shri Duraisamy and issued summons to him. Shri Duraisamy by a telegram informed the appellants that he was not in a position to turn up for cross -examination in the month of May, 2005 and that he would be available for cross -examination in the next month. The text of this telegram. (copy produced by Counsel today) reads thus: REG. CENTRAL EXCISE SHOWCAUSE NOTICE DUE TO ILLHEALTH 1 APPEAR BEFORE COMMISSIONER. I AM WILLING TO COME DURING JUNE 2005 This matter was communicated by the appellants to the Commissioner, but the latter declined further opportunity in view of Section 33A of the Central Excise Act, whereunder it was not permissible for the adjudicating authority to grant more than three opportunities of being personally heard. Learned Commissioner proceeded to dispose of the case, without allowing the appellants to cross -examine Shri Duraisamy. Hence the impugned order.