Tribunal sets aside Commissioner's decision, remands for fresh adjudication under Section 9D.

Elora Tobacco Co. Ltd. Versus Commissioner of Central Excise, Customs and Service Tax, Indore

Elora Tobacco Co. Ltd. Versus Commissioner of Central Excise, Customs and Service Tax, Indore - TMI Issues Involved:
1. Rejection of the request for cross-examination of witnesses.
2. Applicability of Section 9D of the Central Excise Act, 1944.
3. Maintainability of appeal against the decision rejecting cross-examination.

Detailed Analysis:

1. Rejection of the Request for Cross-Examination of Witnesses:
The appellant challenged the decision of the Principal Commissioner communicated via a letter dated 03.06.2016, which rejected their request for cross-examination of certain individuals. The Commissioner’s response was based on the premise that the individuals were co-noticees and directing them to be present for cross-examination could incriminate them. The Commissioner relied on the case of A K Jayasankaran Nambir, J N S Mahesh Versus Commissioner of Customs, Cochin [2016 (331) ELT 402 (Ker.)] to justify the rejection.

2. Applicability of Section 9D of the Central Excise Act, 1944:
The appellant argued that under Section 9D of the Act, any statement recorded before a gazetted Central Excise officer is relevant in adjudication proceedings only if the maker of the statement is examined in chief and cross-examination is allowed. The appellant requested the records of the examination in chief of the witnesses whose statements were relied upon in the Show Cause Notice dated 16.02.2012. The Tribunal noted that Section 9D mandates that a statement recorded before a gazetted officer can be treated as relevant only if the maker of the statement is examined as a witness before the adjudicating authority and the authority concludes that the statement should be admitted in evidence in the interest of justice.

3. Maintainability of Appeal Against the Decision Rejecting Cross-Examination:
The Tribunal considered whether an appeal lies against the decision rejecting the request for cross-examination. The appellant cited provisions of the Central Excise Act, 1944, and relevant case laws, including J & K Cigarettes Ltd v CCE, 2009 (242) ELT 189 (Del) and Swiber Offshore Construction Pvt Ltd v CC, 2014 (301) ELT 119, which supported the maintainability of such appeals. The Tribunal concluded that an appeal is maintainable against the decision rejecting cross-examination, overruling the preliminary objection.

Merits of the Case:
The Tribunal observed that the Commissioner’s letter did not address the appellant’s actual request for examination-in-chief records but only rejected the request for cross-examination of specific individuals. The Tribunal emphasized that the law requires the examination-in-chief of witnesses before their statements can be admitted as evidence, and the appellant must be given an opportunity for cross-examination.

Judicial Precedents and Legal Principles:
The Tribunal referred to various judicial authorities, including the Hon’ble Supreme Court and High Courts, which established that cross-examination is a fundamental right when statements are relied upon in adjudication proceedings. The Tribunal highlighted the recent judgment of the Punjab & Haryana High Court in Ambika International & others v UOI, which clarified the procedure under Section 9D of the Act.

Conclusion:
The Tribunal allowed the appeal, setting aside the Commissioner’s decision and remanding the matter for fresh adjudication. The Principal Commissioner was directed to comply with Section 9D of the Act and follow the procedure outlined by the Punjab & Haryana High Court in Ambika International, which includes examining witnesses in chief, providing examination records to the appellant, and allowing cross-examination if requested.

Operative Part:
The appeal was disposed of with directions to the Principal Commissioner to adjudicate the Show Cause Notice following the mandate of Section 9D and the directions in para 33 of the Ambika International judgment. The operative part was pronounced in open court on 23.06.2016.