2026-VIL-1195-CESTAT-AHM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Penalty without Corroborative Evidence - Adjudicating Authority imposed penalties on the appellants under Rule 26 of the Central Excise Rules, 2002, based solely on confessional statements recorded during departmental proceedings without offering cross-examination opportunities to the witnesses whose statements were relied upon, and without specifying the exact sub-section or clause of Rule 26 under which the penalties were imposed - Whether penalties can be imposed under Rule 26 of the Central Excise Rules, 2002, on the basis of statements without corroborative evidence and cross-examination of witnesses – HELD - The Section 9D(1)(b) of the Central Excise Act, 1944, mandates that a person whose statement has been recorded must be examined as a witness before reliance is placed on such statement, ensuring the right of cross-examination. In the present case, there is no tangible or corroborative evidence against the appellants to connect them with the alleged offences except their confessional statements - The Supreme Court in Amrit Foods has held that penalty provisions are to be construed strictly, and it is necessary for the Adjudicating Authority to specify the exact clause or section of the Rule under which penalty is imposed, so that the assessee is put on notice as to the exact nature of contravention. In the present case, the ld. Commissioner has failed to specify which sub-section or clause of Rule 26 has been contravened. Therefore, the conclusion arrived at by the Adjudicating Authority based solely on statements without substantial corroborative evidence and without specifying the relevant clause of Rule 26 cannot be upheld - The impugned order imposing penalties is set aside and the appeal is allowed
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