Section 9D safeguards in excise adjudication require witness examination and cross-examination before relying on recorded statements.

Statements recorded during Central Excise investigation are not automatically admissible in adjudication. Section 9D requires the adjudicating authority, where the maker is available, to first examine that person as a witness, record a reasoned basis for admitting the statement, and then consider cross-examination if sought. Statements recorded behind the assessee's back cannot be relied on as relevant evidence unless this mandatory procedure is followed. The rule is reinforced by natural justice and the general principles governing admissibility of evidence. Revenue cannot straightaway use such statements in adjudication; the authority must proceed in accordance with Section 9D and permit cross-examination where required.

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Issues: Whether statements recorded during investigation under the Central Excise Act could be relied upon in adjudication without following the procedure under Section 9D and without giving the assessee an opportunity to cross-examine the makers of those statements.

Analysis: Section 9D applies to adjudication proceedings and makes the admissibility of statements contingent on the statutory safeguards in sub-section (1). If the maker of the statement is available, the adjudicating authority must first examine that person as a witness and record a reasoned view before admitting the statement in evidence. Only thereafter can the question of cross-examination arise. Statements recorded behind the back of the assessee cannot be treated as relevant evidence unless this mandatory procedure is followed. The principles of natural justice and the general rules of evidence support this approach.

Conclusion: The Revenue cannot straightaway rely on such statements in adjudication. The adjudicating authority was directed to proceed in accordance with Section 9D and to allow cross-examination where sought, so the petitioners succeeded.

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