2018 (3) TMI 494 - AT - Central Excise

Tribunal Upholds Order Allowing Cross-Examination in Central Excise Duty Evasion Case

The Tribunal upheld the Commissioner (Appeals) order directing denovo consideration and permitting cross-examination of witnesses in a case involving ... Principles of Natural Justice - plea of cross-examination rejected - Clandestine removal - Held that: - the Commissioner (Appeals) has taken note of various decisions of the Tribunal and observed that when the statements have been relied by the department for confirmation of the demand, much prejudice is caused to the respondent by not allowing them to cross-examine the witnesses - appeal dismissed - decided against Revenue. Issues:- Direction to permit cross-examination of witnesses by the adjudicating authority.- Validity of the Commissioner (Appeals) order remanding the matter for denovo consideration.Analysis:Issue 1: Direction to permit cross-examination of witnessesThe case involved the evasion of central excise duty by the respondents, who are cement manufacturers. The department conducted search operations and recorded statements of various individuals. The original authority confirmed the demand, interest, and penalties, leading to an appeal by the respondents. The Commissioner (Appeals) set aside the Order-in-Original and directed for denovo consideration, allowing cross-examination of witnesses. The Revenue argued that there was no sufficient reason for cross-examination and that the case was based on confessional statements and corroborating evidence. However, the Commissioner (Appeals) considered the necessity of cross-examination, citing previous Tribunal decisions and emphasizing the importance of allowing it to prevent prejudice to the respondent. The Tribunal agreed with this view, citing rulings from the Hon'ble High Courts of Kerala and Delhi, and upheld the Commissioner (Appeals) order.Issue 2: Validity of the Commissioner (Appeals) orderThe main grievance of the Revenue was against the remand of the matter for denovo consideration and the direction to permit cross-examination of witnesses by the adjudicating authority. The Tribunal found that the impugned order by the Commissioner (Appeals) was based on sound reasoning, considering the importance of cross-examination in ensuring a fair process and preventing prejudice. Citing relevant decisions from High Courts, the Tribunal dismissed the Revenue's appeal and disposed of the cross-objection filed by the respondent accordingly. The operative portion of the order was pronounced in open court, affirming the dismissal of the Revenue's appeal and the disposal of the respondent's cross-objection.