2017 (11) TMI 757 - AT - Central Excise

Appellate Tribunal CESTAT NEW DELHI overturns order citing violations of natural justice principles

The Appellate Tribunal CESTAT NEW DELHI set aside the impugned order due to violations of natural justice principles, including the discontinuation of ... SSI Exemption - case of Department is that both the factories were wrongly availing SSI exemption by clearing goods clandestinely without payment of duty - cross-examination of witnesses - Held that: - the learned Commissioner had initially permitted the cross examination of the witness sought by the appellant. It is also on record that the two panch witnesses were also cross examined and their statements recorded before the adjudicated authority. However, after taking over of a new officer as Commissioner, the cross examination of the rest of the witnesses was disallowed. The impugned order needs to be set aside and matter remanded to the adjudicating authority. For satisfying the requirements prescribed 9D ibid opportunity for examination and cross examination of witnesses may be extended through an effective hearing to all connected parties - appeal allowed by way of remand. Issues:1. Violation of principles of natural justice in passing the impugned order.2. Challenge to the authenticity of data from electronic devices.3. Disallowance of cross-examination by the new Commissioner.4. Applicability of Section 9D of the Central Excise Act, 1944 in adjudication proceedings.Analysis:Issue 1: Violation of principles of natural justiceThe appellants contested the impugned order, alleging that it was passed without following proper procedure, leading to violations of natural justice principles. They argued that the Commissioner initially allowed cross-examination of certain witnesses but discontinued the process after being transferred. Additionally, the appellants were not provided with copies of all seized documents before the final order was passed, depriving them of a fair opportunity to respond adequately.Issue 2: Challenge to the authenticity of electronic dataThe appellants raised concerns about the authenticity of data obtained from electronic devices like pen drives, laptops, and CDs, which were used against them in the adjudication process. They highlighted that key individuals had retracted their statements, casting doubt on the reliability of the electronic evidence presented by the adjudicating authority.Issue 3: Disallowance of cross-examination by the new CommissionerThe new Commissioner disallowed further cross-examination of witnesses, leading to a procedural challenge by the appellants. This decision impacted the appellants' ability to fully challenge the evidence presented against them, creating a situation where their right to a fair hearing was compromised due to the discontinuation of the cross-examination process.Issue 4: Applicability of Section 9D of the Central Excise Act, 1944 in adjudication proceedingsThe Tribunal examined the applicability of Section 9D of the Central Excise Act, 1944 in adjudication proceedings, citing relevant legal precedents from the Hon'ble Punjab and Haryana High Court and the Hon'ble Delhi High Court. It was established that the provisions of Section 9D must be strictly followed in adjudication proceedings, similar to criminal proceedings, to ensure the admissibility and relevance of statements made before Central Excise Officers. The Tribunal, aligning with previous judicial interpretations, concluded that the impugned order needed to be set aside, and the matter remanded to the adjudicating authority for a fresh decision, emphasizing the importance of adhering to the requirements of Section 9D for a fair and lawful adjudication process.This comprehensive analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CESTAT NEW DELHI and provides a detailed understanding of the legal complexities involved in the case.