ORDER
T.P. Nambiar, Member (J)
1. This is an appeal filed by the appellant against the de novo proceedings conducted by the adjudicating officer. The de novo proceedings started in pursuance of the order of the Tribunal in Order No. 149/85-B. In the remand order the Tribunal made the following observations :-
“With regard to the first point pertaining to the machinery available in the appellants’ factory, we notice that in reply to the show cause notice, the appellants furnished detailed information about what machinery they have and what machinery they do not have and argued that they do not have machinery to complete manufacture of powerloom parts and the machinery they have is only for the production of rough castings and not finished goods. This point do not seem to have been discussed and disposed of properly on the basis of evidence available. Besides, the appellants have submitted that the Collector did not take into account the expert opinion of the Superintendent who had examined the seized articles and given the opinion that except for dobbies stands others were crude castings. This opinion was forwarded to the appellants on 10-11-1982 along with a covering letter.
9. The appellants argued that the mode adopted for billing cannot be conclusive of the nature of the goods and cited a judgment (4 34 SCC 339-Madras High Court) in support of their argument. However, their main grievance is that the evidence filed by them in the shape of 30 affidavits of purchasers from Tamil Nadu and the outcome of the cross-examination of some other purchasers during the adjudication proceedings was not given due consideration and weight by the Collector. They also referred specifically the cross-examination of Govindan and Ambalagan who are stated to have said during cross-examination that what they had purchased were rough castings and these were further machined by them. A perusal of the Collector’s orders show that the evidence put forward by the appellants by way of affidavits and by way of cross-examination has not been given full consideration that it should have received before it was rejected.
10. The appellants also raised the question of time bar in their reply to the show cause notice but this was also not considered in all its aspects before the impugned orders were passed. Similarly, the appellants plea that on 7-8-1982 Shri G. Subramanyam, Manager of the appellant company deposed in a statement about bought-out items during 1978-79 to 1980-81 does not appear to have been considered in the impugned order. If goods are proved to be bought out and are removed in the same condition without the contravention of any Excise law, they do not prima facie attract Central Excise Duty unless they are shown to be essential or integral part of the end product, which the party supplied to their customers. No studied finding is there in the Collector’s order.
11. A perusal of the records before us shows that the submissions of the appellants made before the Collector did not receive due consideration before the orders were passed. It is, therefore, necessary that the matter be re-examined and fresh orders passed after taking into consideration the submissions of the appellants and in the light of what has been stated above as there are several points in addition to those mentioned above on which considered findings are necessary. We therefore order that the impugned order be set aside and remanded to the Collector for fresh examination and orders. The appellants may be given an opportunity to be heard and to produce evidence before a fresh order is passed. The appeal is allowed in these terms.”
2. The learned Advocate Shri Rajesh Chander Kumar in the first instance pointed out that the directions given by the Tribunal were not carried out by the adjudicating officer in the de novo adjudication proceedings. In this connection, he pointed out that the Tribunal had clearly entered a finding that the adjudicating officer has not taken into account the machineries which are found in the premises of the appellant and as to whether those machineries are sufficient for the manufacture of the parts of the powerlooms. He pointed out that the Tribunal has clearly made a finding that this point was not dealt with in the impugned order and the Collector not having taken into account those facts the order was not sustainable in law. He further pointed out that the Tribunal in the remand order also pointed out that the expert opinion of the Superintendent who had examined the seized articles and given the evidence that except for Dobbies other goods are crude castings. It was pointed out before us, that this opinion of the Superintendent was not at all looked into by the adjudicating authority on the ground that these were not relied upon in the show cause notice. Shri Rajesh Chander Kumar pointed out that the Tribunal had given the liberty to the appellants to produce the new evidences and those documents which was the documents sent by the Superintendent can be taken as an additional evidence and the Collector having relied on the same in the original proceedings which was referred to in the Tribunal order due weight should have been given to this opinion. He, further, pointed out that brushing aside this opinion on the ground that it was not relied on in the show cause notice is against the order of the remand passed by the Tribunal. He further pointed out that in the order passed by the Tribunal, it was clearly mentioned that the affidavits which were 30 in numbers filed by the appellants should be taken into consideration. In this connection, he pointed out that in the impugned order, the learned adjudicating officer has not considered these affidavits and he merely brushed aside the same by stating that these are afterthoughts. He pointed out that there is a specific direction by the Tribunal to consider these affidavits and therefore it was incumbent on the adjudicating officer to look into the contents of the affidavits and discuss the same and if necessary it was for him to have called the evidences for examination and after discussion of the same only, he could have either accepted the same or rejected it. He, therefore, contended that the directions of the Tribunal have not been carried out in the de navo proceedings in view of the fact that it was merely brushed aside as same being an after thought.
It was further pointed out that the appellants had sought the cross- examination of some of the evidences and this cross-examination was not allowed by the adjudicating officer. He pointed out that this cross-examination will be in the nature of an additional evidence. It was further pointed out that the adjudicating officer should have looked into these particular goods and then should have entered a finding as to whether these powerloom parts would have been produced in the factory of the appellant by taking into consideration the machineries available as well as the power supplied to the appellants. He pointed out that since these exercises are not done in terms of the impugned order, the order is not sustainable and the matter requires to be remanded to the original authority for de novo consideration.
3. Heard the learned JDR Shri Rama Rao for the department. He pointed out that the affidavits were not accepted by the Collector in view of the fact these were afterthoughts. He further pointed out that in the original appeal filed by the appellant before the Tribunal there was no grievance about the cross-examination of the other witnesses and that grievance was not put forth by the appellant in the original appeal. He therefore pointed out that the appellants cannot insist the adjudicating authority for calling those witnesses for further cross-examination. He pointed out that this cross-examination is not in the nature of any new evidence and therefore this plea of the appellant cannot be accepted. He further pointed out that even though the opinion furnished by the Superintendent was not taken into consideration. It was pointed out that as per the chapter notes even if there is some evidence, they are to be treated as finished goods for assessment purposes. He therefore pointed out that this point can looked into by the Tribunal. He further pointed out that the Tribunal order is only a general order and no specific direction is given by the Tribunal while remanding the case.
4. We have considered the submissions. As far as the mention of crossexamination of the witnesses are concerned it has been contended before us that the cross-examination of the witnesses is in the nature of new evidences on behalf of the appellants. We are unable to agree with this argument of the learned Advocate. The Tribunal only has stated that the appellant may be given an opportunity to produce the evidence before a fresh order is passed. Cross examining the present witnesses who have already been examined by the officers and to get this examination is not a fresh evidence as contained in the order passed by the Tribunal. It is also seen that in the original appeal before the Tribunal the appellant has not made any grievance that they were not given the chance of examining the evidences. On the contrary, the appellant had cross-examined certain witnesses and their evidence was mentioned in the remand order by the Tribunal. Therefore this argument cannot be accepted and we reject the same.
5. As far as the other points are concerned, it is seen that in the remand order the Tribunal has clearly held that the appellant had furnished the information about the machinery they have and what machinery they do not have and it was also pointed by the Tribunal that the case of the appellant is that they do not have the machinery to complete the manufacture of powerloom parts and machinery and they have only certain machinery for the production of Rough Castings and not of finished goods. Referring to this argument of the appellant, the Tribunal in the above said order pointed out that this point was not looked into and discussed by the adjudicating authority and therefore the matter requires to be remanded.
6. We observe that even in the de novo adjudication proceedings this aspect was not looked into by the adjudicating authority with reference to each individual item which were cleared by the appellants. It was incumbent on the adjudicating authority to take into consideration the items removed by the appellants and then also to look into as to what are the machineries which are found in the premises of the appellants and then to enter a finding as to whether those machineries are capable of producing finished products which is alleged to have been cleared by the appellant. Such exercise has not been done in the de novo proceedings either by taking the assistance of an expert or by discussing this aspect in the proper perspective as per directions of the Tribunal. Therefore, in this respect, we hold that the order passed by the adjudicating authority is not a proper order.
7. The second aspect is that the Tribunal has stated in the order that an expert opinion of the Superintendent who had examined the seized articles as to the effect that except for Dobbies of the other items removed by the appellants the other articles are crude castings. This opinion was forwarded by the appellants on 10-11-1992 along with a covering letter. Even in the earlier de novo proceedings the appellants has been relied on this opinion of the Superintendent and on that ground they have filed the earlier appeal before the Tribunal. The Tribunal also took note of these pleas of the appellant. It was therefore pointed out that the appellant was at liberty to produce fresh evidence. In this case, since the evidence is available in the record of the adjudicating officer he was duty bound to look into these evidences before giving any finding in this regard. On the contrary, in the impugned order, he stated that these were not the documents relied upon by the department while issuing the show cause notice and these documents were not looked into. This non-examination is a clear violation of the order of the Tribunal by way of remand wherein it was specifically stated that the appellants should be given an opportunity to produce any such evidence. This not only is an evidence produced by the appellant but is an evidence available with the department itself. Therefore non-consideration of this evidence is violating the principles of natural justice. In any case, the directions of the Tribunal in this regard has not been carried out.
8. It was also pointed out by the learned Advocate that the Tribunal had directed the adjudicating authority to look into the evidence filed by them in the shape of 30 affidavits of the purchasers from Tamil Nadu. The Tribunal in this regard pointed out that the evidences put forwarded by the appellants by way of affidavits and by way of cross-examination has not been given full consideration before it was rejected. Therefore this finding of the Tribunal clearly goes to show that before rejecting the same the adjudicating officer should have gone into the substance of these affidavits as well as the answers given in the cross-examination before he rejected the same. But in the de novo adjudicating proceedings, the learned Collector without going into these affidavits as well as the answers given in the cross-examination rejected the same merely stating that these are afterthoughts. This in our view is not in accordance with the directions contained in the remand order, for all the abovesaid reasons. It is also seen that in para 10 of the order passed by the Tribunal a specific mention was made that the plea of limitation also should be dealt with by the adjudicating officer. No such finding is given in the de novo adjudication order. Therefore, the adjudicating officer has not carried out the directions given by the Tribunal in the remand order.
9. In view of this, we are of the view that the impugned order is not sustainable in law and accordingly we set aside the same and remand the case back to the adjudicating officer for de novo adjudication of the same in the light of our observations and to deal with each point as stated above and then give a reasoned finding in this regard, after affording an opportunity of hearing to the appellants. It is needless to say that the appellants can rely on fresh evidences as per the earlier order of the Tribunal.