ORDER
M. Veeraiyan, Member (T)
1. This is an appeal against the order of the Commissioner No. 132/Commr./2005 dt. 14/3/2005, which was passed in de-novo proceedings in pursuance of Tribunal’s order No. 165-167/92A dt.27/4/1992.
2. Heard both sides.
3. The relevant facts, in brief, are as follows:
a. It transpires that the Income Tax Department conducted investigation against the commission agent of appellant firm and recovered certain private records and copies of certain documents, which indicated prima-facie suppression of actual transaction value in respect of goods manufactured by the appellant and collection of extra amount.
b. On the basis of intimation received from the income tax department to the central excise department and after further investigation by the Central Excise Department, a show cause notice was issued proposing demand of duty and by an order-in-original dt.25/11/1991 passed by the commissioner, duty amounting to Rs. 7,36,676/- was demanded from the appellant firm and penalties were imposed on the firm and other connected person.
c. The matter came before the Tribunal and it was inter alia pleaded that there was denial of principle of natural justice as only an illegible photocopy of a diary seized from the Chennai based commission agent of the appellant, M/s Swaran Jaura, which was an important relied upon document was given to them and request for cross-examination of Shri Swaran Jaura author of the diary was not granted.
d. The Tribunal vide its order dt.27/4/1992 remanded the matter for de-novo consideration with certain specific directions.
e. The Commissioner vide his order dt. 11/3/2005 confirmed the duty of Rs. 7,36,676/- and imposed a penalty of Rs. 4 lakhs on the appellant firm and imposed a penalty of Rs. 1 lakh on Shri Mahendra Vyas Karta, the other appellant.
4. The ld. Advocate for the appellants submits that the Commissioner has ignored the specific directions of the Tribunal as the original diary was not made available for perusal and no cross-examination was offered and he prays for setting aside the order of the Commissioner.
5. Ld. DR reiterates the findings of the Commissioner.
6. We have carefully considered the submissions made by both sides. The appeal is against the order of the Commissioner, which has been passed in de-novo proceedings in pursuance of Tribunal’s order of remand dt.27/4/1992.
7. The directions of the Tribunal are reproduced below:
Both sides did not have any objection for remand of the matter. In view of the earlier observations in above para we remand the matter to the Collector of Central Excise, Ahmedabad having jurisdiction. We further order that the Collector shall also afford opportunity of cross examination and also produce original note book for perusal of the appellants. We further order that a personal hearing will be granted to the appellants and the Collector shall readjudicate the matter within 6 months from the date of receipt of this order.
8. The Tribunal thus fixed a time limit of six months for deciding the matter afresh; directed granting of opportunity of cross examination; and ordered that the original note-book should be made available for perusal by the appellants. We find none of the terms of remand order has been complied with.
9. The Commissioner’s findings/reasoning for not following the above direction are reproduced below:
17. I have closely perused the entire order passed by the Hon’ble CEGAT. I apprehend that the party had filed appeal, and had presented their case in such a way as if entire case would turn around the original copy of diary and that since they had been supplied only illegible copy of the same which deprived them from filing proper and effective reply to their defence. Any person of ordinary prudence and intelligence sitting in the position of adjudicating authority or at the appellate forum like CEGAT, would have inferred prima facie that there had been denial of principal of natural justice. In fact no time was devoted as could be borne out from record and from skin deep submission such remand order was passed. The CEGAT’s order had become as if a boon and an armour to the assessee. Then they started demanding original copy of diary and requested for cross-examination of the M/s. Swaran Jaura of Madras (now Chennai). The order of the CEGAT somehow brought the department at a receiving end. However, for strict adherence to CEGAT’s order and to observe principles of natural justice in its right perspective, the department had made several correspondence with income tax authorities both at Ahmedabad and Madras, for submission of original copy of diary and also issued several summons to Shri Swaran Jaura, for making his presence for cross-examination as desired, by the assessee and okeyed by the Hon’ble Tribunal However, the efforts did not yield in any meaningful conclusion so far. Unfortunately, on completion of investigation, Income Tax Department had handed over the diary of Shri Ashwani Kumar Jaura of M/s. Swaran Jaura, who by that time was well aware of its importance as documentary evidence and hence had destroyed that diary. In reply to summons issued to him, he expressed his inability to come to Ahmedabad on one pretext or other and had also disowned his involvement with the assessee. The Hon’ble Tribunal’s order and the indifferent attitude on the part, of Income Tax Department had placed the Central Excise Department in a precarious position to decide a case of evasion of duty for which sufficient and tangible evidence has been collected and brought on record by way of investigation had been as if undone. To resolve the case which itself reached a stage of uncertainty, the Department as a last hope approached Hon’ble CEGAT by filing Misc. Application vide communication dt.26/3/1998, to modify the earlier order directing to produce original diary for perusal to the part, as the original diary is destroyed 2) to modify the order changing the adjudicating authority for deciding the case from Commissioner to Dy. Commissioner and 3) to grant extension of further period of one year to re-adjudicate the case.
18. I find the Hon’ble CEGAT decision to Misc. Application is still pending for decision and modification. However, in the present scenario, even if the CEGAT decides the application, in either way, it will not make any material change or affect the status of the case. As per Board’s latest circular No. 806/3/2005-CX dt.12/1/2005, wherein it had been clarified that cases remanded back for de-novo adjudication should be decided by an authority which passed the said original order. Hence, this case falls under the competency of Commissioner, as earlier order was issued by Collector. The time limit of one year sought by the Department is already over. If the CEGAT insist for production of original copy of diary, the same is not possible as it had already been destroyed and if allows dispensing with the same, the photocopy of the diary will form as an evidence. Hence, in my considered view, I am not restrained from deciding the case based on evidences gathered by the Department and submissions made in the case, rather than keeping the case for further period of uncertainty.
19. My primary task is to decide whether the photocopy of diary can be taken as evidence, so far as this case is concerned. I find that the case was in fact made out on the basis of photocopy of the diary as one of the evidence. The authenticity and veracity of entries made therein was never challenged by the assessee, on the contrary it was accepted by the assessee. The photocopy of diary was also made available to the assessee for inspection. If they found it as illegible, they should have raised such objection at any time during the course of investigation. If they find that photocopy supplied to them was illegible they have also got a remedy to inspect the same by personally visiting the Preventive Section of the department or they should have made necessary arrangement to take legible copy of the same by themselves. Moreover, the persons whose statements were recorded had not even made any retraction of submissions made by them, within the reasonable period of time. Throughout the proceedings of the case, they consistently asked for legible copy and original copy, when they were sure that department would never be able to produce the same. Moreover, they had never made any attempt to defend their case with documentary evidence on other charges made in the show cause notice, which actually formed the core and a major quantum of evasion was based on that. I find that the assessee was in fact not serious or sincere in their approach to resolve the case and only had an intention to linger the case for further period to escape the duty liability. On the contrary, department had taken every effort and had extended ample and sufficient opportunity to the assessee to defend the case by adhering to the observed of principles of natural justice. Hence, in my considered view, photocopy of diary itself forms and evidence in this case. However, I find it prudent to look into statutory provisions given under India Evidence Act, 1872 and Central Excise Act, 1944, regarding admissibility of such documents as evidence.
10.1. We are aware that the order of the Tribunal is subject to further appellate remedies. The Tribunal has passed the order of remand with the consent of both sides. If the terms of remand order were considered not legal or proper, it was open to the Commissioner to agitate the matter by filing appeal before the higher appellate forum. Alternatively the Tribunal should have been apprised of the difficulties and modification of the terms ought to have been sought. Commissioner has recorded that the department filed a miscellaneous application after nearly six years in March 98. We have not been shown that any such petition has been filed and if so, the same appears to have not been pursued through the departmental representative with the Tribunal. Without following the above course of action, the Commissioner has chosen to ignore the specific directions as discussed below and pass the impugned order.
10.2. Tribunal’s order dated 27th April 92 prescribed a time limit of six months to the commissioner for deciding the matter on de novo proceedings. On an application made by the department the time limit for re-adjudication was extended by another six months by the tribunal vide their order dated 10.12.92. The adjudication has been done after more than 12 years with out following the terms of the remand order and with out getting the terms modified or set aside by the competent forum.
10.3. The original diary was not made available for perusal by the appellant. It transpires that in October, 1992, the Income Tax Department reportedly handed over the document to Shri Ashwanikumar Jaura from whose custody the same was seized by them. Shri A. Jaura claimed to have destroyed the documents thinking that the same were not required for any other purposes. While a destroyed document could not have made available for perusal, we notice that the order of the Tribunal has been passed in April, 1992 and it is not convincing that Department has acted with a sense of urgency to get back the original document from the Income Tax authorities for the purpose of completing de-novo adjudication proceedings. At any rate, the Commissioner has not chosen to bring to the notice of the Tribunal the developments and seek appropriate modifications terms of the order from the Tribunal.
10.4. The Commissioner has not made available Shri Swaran Jaura for cross-examination. His conclusion that “I firmly believe that cross-examination will not serve any purpose so as to alter the course of case, when all the other evidences clearly establish evasion of duty” will amount to sitting in judgment over the decision of the Tribunal which directed such cross-examination. If he was deciding the need for cross-examination in the absence of specific direction was by the Tribunal, he was entitled to his view. Tribunal’s specific direction permitting cross-examination should not have been brushed aside. This not only amounts to failure to comply with the terms of the remand order but also it is an act of judicial indiscipline.
11. Not only the specific directions/terms contained in the remand order are not fulfilled but there are certain findings, comments and observations in the order of the commissioner which are unwarranted. His observations “from skin deep submission such remand order was passed”, “CEGAT’s order had become as if a boon and an armour to the assessee”, “the order of the CEGAT somehow brought the department at a receiving end”, “the Hon’ble Tribunal’s order and the indifferent attitude on the part of Income Tax Department had placed the Central Excise Department in a precarious position to decide a case of evasion of duty for which sufficient and tangible evidence has been collected and brought on record by way of investigation had been as if undone” do not show the ld. Commissioner was aware of his role in de-novo adjudication in pursuance of Tribunal’s order. He ought to have decided strictly following the directions or should have filed appeal against the order of the Tribunal. His attitude towards the higher judicial forum is not at all healthy. The observations and insinuations are totally unwarranted. He has dealt with the de novo adjudication proceedings as if he was dealing with an appeal against the order of the Tribunal dated 27.4.92.
12. The order of the Commissioner having been passed in violation of the specific directions contained in the remand order dt. 27/4/1992 and with out making available the author of crucial document for cross-examination and with out making available the relied original document for perusal cannot be sustained and therefore the same is set aside and the appeal are allowed with consequential relief.
13. We feel that the casual and objectionable way the order of remand passed of the Tribunal was dealt with deserves to be brought to the kind notice of the Chairman, CBEC, for his information and appropriate action and accordingly a copy of the order is endorsed to him.
(Pronounced in Court)