Excise duty demands cannot be sustained based on unreliable Panchnamas and documents not provided to the assessee; if excluding such evidence brings the turnover within the SSI exemption limit, the assessee is not liable for duty.

FINAL ORDER NO. 51433/2026

ASHOK JINDAL:

This second round of litigation.

2. In earlier ground of litigation, vide Final Order No. 57831- 57832/2017 dated 14.11.2017, the matter was remanded back to theAdjudicating Authority with the following directions:

“15. Hence, it is required for the departmental adjudicating authorities to first admit the statements in evidence in accordance in the procedure prescribed in Section 9D before the same can be used against asseesse even in departmental proceedings the same 8 Excise Appeal Nos. 50190 – 50191of 2016 view has been the followed by the Hon’ble High Court in several other cases including case of G Tech 2016 (339) ELT 209 (P&H). By following above categorical pronouncement of the Hon’ble High Court, we are of the view that the impugned order merits to be set aside and remanded to original adjudicating authority for complying with the mandate of Section 9D of the Central Excise Act before passingorders in de novo proceedings.16. At the time of passing orders in the denovo he will also keep in view the observations made in respect of the various evidences used by Revenue for making the demand. Additional evidence maybe admitted as per law.”

3. The facts of the case are that the appellant was engaged in manufacturing of Evaporating Air Coolers falling under sub heading 84796000 of the First Schedule of Central Excise Act, 1985. On 26.03.2010 a search was conducted at the various premises relating to the appellant as well as residents of their proprietor Shir A.K. Chaudhary, the visiting officers found the stock of evaporating coolers found in factory and godowns premises. The documents believed to be incriminating were also seized. A panchnama was drawn of seized documents thereafter, various statements recorded on the basis of documents seized and the statements recorded during the course of investigation, a show cause notice dated 24.09.2010 was issued to the appellant proposing to confiscate the seized goods after completing the investigation of the case. Another show cause notice dated 17.10.2013 was issued proposing demand of recovery of Central Excise duty amounting to Rs. 2,24,41,250/- on the charges of clandestine clearance. Both the show cause notices were disposed of by earlier order passed by the Adjudicating Authority confirming the charges of clandestine removal but accepting the plea regarding duplication of demand and other arguments advanced by the appellant during the course of adjudication, therefore, duty demand was confirmed of Rs. 94,87,283/-. The seized goods were held to be confiscated with the option to get release the same on payment of redemption fine of Rs. 75 lakhs. Penalties were also imposed. Aggrieved from the said order, appellants filed appeal before this Tribunal and this Tribunal remanded matter back to the Adjudicating Authority with the direction referred inparagraphs 2 above.

4. In remand proceedings, the Adjudicating Authority allowed cross-examination of the ten witnesses sought by the appellant for cross-examination only three witnesses were cross-examined. On the basis of statement of cross-examination and on the basis of seized documents as referred in panchnama, the value of clearances were ascertained for the period of 2008-09 as Rs. 2,50,35,250/- and after giving SSI exemption and cum duty price worked out to Rs. 55,362,50/- on which a duty of Rs. 4,21,458/- was demanded and for the period 2009-10, the assessable value was ascertained Rs. 8,26,69,958/- wherein duty worked out to Rs. 68,12,005/-. Therefore, total demand of Rs. 72,33,463/- was confirmed and alongwith interest and equivalent amount of penalty was also imposed. Aggrieved withthe said order, appellant is before us.

5. The learned counsel for the appellant submits that in the impugned order duty confirmed relates to Financial Year 2008-09 and 2009-10. He submits that the demand was mainly on the basis of Neel Gagan Ledger, copy whereof was neither supplied to the appella