Right to crossexamination in excise proceedings upheld, order set aside and matter remanded for fresh adjudication allowing witness testing.

Violation of the principles of natural justice was found where appellants were denied the opportunity to crossexamine witnesses whose statements, and results of a departmental search, formed the basis of show cause notices; the Tribunal held that reliance on those untested statements affected admissibility and fair hearing and therefore set aside the impugned order. The Tribunal remanded the matter for fresh adjudication, directing the adjudicating authority to allow crossexamination of relevant witnesses and officials and to decide the matter within three months. Appeals disposed by way of remand.

---

---

Issues: Whether the impugned adjudication order can be sustained where the adjudicating authority declined to permit examination/cross-examination of witnesses whose statements recorded during search/investigation were relied upon, and whether the matter requires remand for fresh adjudication.

Analysis: The case hinges on reliance upon statements recorded during search/investigation and the denial of the assessee's request for examination/cross-examination of those witnesses and departmental officers who typed the statements. Statutory procedure under Section 9D(1) was considered regarding the sequence for admitting such statements in evidence and the necessity to examine the person whose statement is relied upon before permitting cross-examination. The record shows requests for cross-examination and for supply of non-relied-upon documents were made but were not granted and no adequate reasons for denial were recorded. Discrepancies in the relied-upon statements and the fact that statements were typed by departmental officers in English without explanation to the declarants were found to justify cross-examination. Established authorities require that reliance on such statements without offering cross-examination violates principles of natural justice and renders those statements not admissible for proving their content.

Conclusion: The impugned order is set aside on the ground of violation of natural justice for denial of examination/cross-examination; the matter is remanded to the adjudicating authority with a direction to provide opportunity for cross-examination of relevant witnesses and officials whose statements were relied upon and to decide the matter afresh within three months from receipt of certified copy of this order.

---