TaxTMI 
TaxTMI 
2011 (11) TMI 13
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.... right for cross-examining the witnesses." 2. The subject matter of challenge in the present appeal is the order dated 30th April, 2010, passed by Customs, Excise and Service Tax Appellate Tribunal (tribunal, for short) in E/STAY/1456/09-Ex in and Central Excise Appeal No. E/1408/09-EP and E/Stay/2252/09-Ex in and Central Excise Appeal No. E/2252/09-Ex. 3. As is noticeable from the title of the order that by the impugned order, the tribunal has disposed of both the stay application as well as the main appeals. 4. The appellant is engaged in manufacture of slotted angles, shelves, cable trays and other sheet fabrication goods falling under headings 7216, 7308 and 9403 of the Schedule to the Central Excise Tariff Act, 1985. The appellant submits that they were/are engaged in manufacture of above goods since 1988 and being a Small Scale Industrial (SSI, for short) unit were entitled to avail exemption from payment of central excise duty under notification No. 8/2003-C.E dated 1st March, 2003. The appellant had got themselves registered under the Act in 1997, but the registration was withdrawn on 4th April, 2003 as the clearances made by the appellant were always within the S....
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....of Rajendra Kumar Sharma, proprietor of Wembley Furnishers, were recorded in 2006 and 2007. 8. In addition, premises of Precision Steel Craft & Equipments were searched and statement of R.L. Batra, husband of one of the partners of the said firm was also recorded by the Revenue. Premises of Summit Engineering Corporation was searched and statement of Mukesh Khanna, partner of the said firm was also recorded. Statement of Anil Kumar Jindal of Jindal Sons (India) Ltd. was recorded. Mr. Anil Kumar Jindal also made a statement on behalf of Jindal Industrial Corporation. Statement of M.L. Jindal of M/s M.L. Jindal & Sons was recorded. Investigation was carried out to locate Bankey Bihari Industries, Marshall Industries, Shiv Shakti Industries and Bhartia Industries from whom the appellant had claimed that they had made purchases but these parties could not be located/traced by the Department. 9. Pursuant to the investigations, a show cause notice dated 17th October, 2007, was issued to the appellant for evasion of duty amounting to Rs.1,48,60,803/- during the period 2002-03 to 2005-06. Reliance was placed by the Revenue on the statements of various persons recorded durin....
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....missions to support the submissions made by him. Time granted. He also requests for photocopy of letter dated 2.1.2009 sent by Sh Mahesh Kaushik addressed to Superintendent (Adj.) to enable him to submit written reply. Request is granted. He also seeks to file compendium of notifications and citation relied upon by him in his written submissions which is duly taken on record. He has nothing further to add." 10. As is apparent from the said order-sheet, the proceedings were closed. The appellant had filed another additional written submissions after closure of hearing. In the written submissions, it was stated as under:- "The Noticees submit that in the present Show Cause Notice demands have been raised against the Noticees based on the uncorroborated statements of certain suppliers, and their officers, the tempo driver Shri Jitender and Mr. Vijender Kumar of M/s. Surya Enterprises. Further the statements of certain other individuals viza. Shri Vicky Gupta and Mrs. Sunita Gupta of M/s. Surya Enterprises, and Mr. Anil Kanodia of M/s. K.G.Metal Industries is also relevant for final determination of the present case. The Noticees strongly dispute the statement/statements subsc....
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....aised on the assessee." 11. The assessing officer thereafter passed an order dated 27th January, 2009. He relied upon statements of the witnesses who had not been cross-examined, inter-alia recording as under:- "I thus have no hesitation to hold that all the statements admitting offence committed by them including giving facts are all tangible evidence. It is also a matter of record that none of the statements being relied upon by the department have been retracted by anyone till date. On the request of the noticee, due opportunity for cross examination was also offered. The fact that the person summoned for cross examination choose not to come or not to respond or to stick to their earlier statements recorded under Section 14 of the Central Excise Act, 1944 does not dilute the department's case against the noticee." 12. We have recorded in detail the aforesaid aspects for two reasons. Firstly Section 9D of the Act was not relied upon and pressed into service by the Assessing Officer and secondly there is a dispute between the appellant and the Revenue with regard to whether the appellant on 7th January, 2009, had voluntarily given up their right to cross-examine the witn....
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....ied. Accordingly, the said section itself provides safeguards and that Section 9D cannot be enforced or applied without the authority examining and considering whether the conditions mentioned in Section 9D are satisfied or not. In this regard, we may appropriately reproduce paragraphs 26 to 31 of the said decision:- "26. Interestingly, the learned senior counsel for the petitioners did not join the issue that the aforesaid circumstances are not exceptional circumstances. They are the circumstances which naturally would be beyond the control of the parties and it would not be possible to produce such a person for cross-examination who had made a statement on earlier occasion. The provisions under Section 9-D of the Act are necessary to ensure that under certain circumstances, as enumerated therein, viz. if the witness has been won over by the adverse party or is avoiding appearance despite several opportunities being given. The rationale is that decision making in a case cannot be allowed to continue in perpetuity. These provisions are based on the Doctrine of Necessity. It provides for relevancy of statements recorded under Section 14 of the Act dispensing with or without the opp....
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.... is taken to treat the statements relevant only if they are made before an officer enjoying a higher rank/status. Secondly, (and that has already been taken note of) such statements are made relevant only under certain specified circumstances, and these are the ones which are beyond anybody‟s control. Thirdly (and this is most important), the quasi-judicial authority can rely upon the statement of such a person only when the stated ground is proved. For example, in those cases where the person who made the statement is dead, there should be sufficient proof that he is dead. In case, where a person cannot be found, the authority would have to form an opinion, based on some material on record, that such a person cannot be found. It would not be mere ipse dixit of the officer. In case, cogent material is not there to arrive at such a finding, the persons against whom the statement of such a person is relied upon can always challenge the opinion of the authority by preferring appeal to the higher authority, which appeal is statutorily available. Same yardsticks would apply to other grounds. If the quasi judicial authority opines that a person is incapable of giving evidence, form....
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.... AIR 1957 SC 478}. 31. Interestingly, even in the present case, the attempt of learned senior counsel appearing for the petitioners was to show that the respondent No.1 ought to have given prior intimation and granted an opportunity to the assessee to make its submissions on invocability of Section 9-D itself and thereby enabling the assessee to take appropriate steps, as may be possible, in the circumstances of the case. He submitted that if a particular witness was not allowed to be cross-examined by stating that it was not possible to procure his presence without delay or expense, had the opportunity been given to the petitioners to meet the expenses, the petitioners would have borne the expenses and could have procured the presence of witnesses. Likewise, he argued that if the opinion was that it is the adverse party, i.e. the petitioner, who kept a particular person out of the way, the petitioner should have been confronted with that so as to enable him to contact the witness through his own resources and inform him about the time and place of the cross- examination, or else, to enable the petitioners to clarify the relevant facts and assist and cooperate with the adju....
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...., the Revenue had not relied upon or referred to Section 9D of the Act during the course of arguments. During the course of hearing before us, learned counsel for the Revenue could not controvert or deny the said statement. It may be noted that both the appellant and the Revenue had filed written submissions before the tribunal after the hearing was held on 19th March, 2010. We have examined the said written submissions and appellant had not referred to Section 9D of the Act in their written submissions. The respondent Revenue in their written submissions had also not relied upon Section 9D of the Act. However, as noticed above, the tribunal, in paragraphs 15 to 19 of the impugned order dated 30th April, 2010, has gone into the question of statements of witnesses which were not cross-examined and has applied Section 9D of the Act. It is apparent that the tribunal has invoked the said Section and held that the conditions mentioned in the said Section are satisfied. Learned counsel for the appellant is right in their contention that the said section could not have been invoked by the tribunal without the appellant being given an opportunity to meet the said contention. It is the cont....