Judgment:
1. Both these appeals are filed against the Order passed by the Commissioner (Appeals) of Central Excise, Pune. The appellants were engaged in the manufacture of excisable goods namely M.S. round bars, cold twisted bars falling under sub-heading No. 7214.90 of the First Schedule to the Central Excise Tariff Act, 1985. The Central Excise Officers of Sangli Division intercepted a bullock cart loaded with 1015 Kg. of 6 mm C.T.D. bars on 07.09.95. The consignment was not accompanied by duty paying documents. The said bullock cart was loaded in the factory premises of the appellants. Thereafter, the officers searched the factory premises of the appellants and took over certain documents. The consignment was, thereafter, seized under the panchanama. The statements of partners of the appellants were also recorded.
2. Show cause notice dated 01.03.96 was issued to the appellants and their partner calling upon them to explain as to why: (i) Central Excise Duty amounting to Rs. 2,23,979/- as specified in Annexure B (ii) in relation to duty allegedly short paid in the year 94 -95: Central Excise Duty amounting to Rs. 710/- and Rs. 46,742/- on the alleged clandestine removal in the financial year 95-96 shown in Annexure B (i) and B (iii) should not be demanded and recovered from the appellants under Rule 9(2) of the erstwhile Central Excise Rules, 1944 read with proviso to Sub-section (I) to Section 11A of the Central Excise Act, 1944. The total demand for duty was Rs. 2,70,721/-; (ii) Central Excise Duty amounting to Rs. 1,62,821/- and Rs. 1,38,593.40 being the alleged irregular credit taken should not be recovered from the appellants as per proviso to Rule 57I(i). The amount of Rs. 1,38,593.40 stated to have been already paid should not be adjusted against the aforesaid liabilities; (iii) Excisable goods under seizure should not be confiscated along with bullock cart under Section 115 of the Customs Act, 1962.
(v) The ld, building, plant, machinery etc. allegedly used in connection with the manufacture, production, storage, removal or disposal of such goods or any other excisable goods on such a land etc. should not be confiscated under the provisions of Rule 173Q(ii) of the rules.
3. The matter was adjudicated upon by the Commissioner of Central Excise and Customs by Order-in-Original dated 23.09.96. The Commissioner confirmed the demand for duty for Rs. 2,70,721/- and ordered appropriation of the amount already paid. He also demanded the alleged irregular credit amount to Rs. 1,62,821/- and Rs. 1,38,593.40 availed by the appellants. However, the amount of Rs. 1,38,593.40 already paid by the appellants was ordered to be appropriated. He also ordered confiscation of the seized goods with an option to redeem the same on payment of fine. He also imposed a penalty of Rs. 1 lakh on the appellants. He further ordered confiscation of land, building, plant, machinery etc. but gave an option to redeem the same on payment of fine of Rs. 25,000/-.
4. These appeals confined to the dispute to the alleged irregular modvat credit amounting to Rs. 1,62,821/- and imposition of penalty of Rs. 1 lakh on the appellants and confiscation of the land, building, plant, machinery etc. This Tribunal by an Order dated 09.04.03 in appeal No. E/101/97 - Mum remanded the matter back to the lower adjudicating authority on the ground that the order passed based upon the verification report done after the personal hearing. A copy of which was not made available to the appellants.
5. At the time of personal hearing on 24.03.04 and 03.06.04, the Commissioner adjudicated upon the issue without granting cross-examination of Shri Ganapat Shinde and assuming certain points arbitrarily by his Order dated 24.6.04 which disallows modvat credit of Rs. 1,62,821/-, imposition of penalty of Rs. 1 lakh on the appellants and confiscation of seized goods with an option to redeem the same on payment of fine of Rs. 6,000/-. He also ordered confiscation of land, building, plant, machinery etc and allowed to redeem the same on payment of fine of Rs. 25,000/-. The ld. Commissioner passed an order identical to the one passed by his predecessor which was set aside by the Hon'ble Tribunal. Hence these appeals.
6. After going through the record it is found that the order has been passed after denying the cross examination of Shri. Ganpat Shinde and that of Asst. Commissioner and justified his action to dis-allow the cross examination of the Asst. Commissioner on the ground that he had submitted an enquiry report. This report submitted by him shows that two dealers were not existing during the financial year 1994-95 when enquiry was made by him after July 1996 and it does not take into account of the closure of the dealers business. Therefore cross examination was necessary. However it is observed that the statement dated 20.08.96 of Shri. Ganpat Shinde was not corroborated. The invoices issued by M/s. Shetji Corporation were not denied and reliance on the post hearing verifications done by the earlier collector relied by the adjudicator are totally uncalled for and in violation of natural justice. Therefore, it is required to be set aside the impugned order and remit the case back to the Commissioner of Central Excise with a direction to furnish copies of post hearing verification and the cross examination sought and thereafter determine the issues involved in the appeals.