TaxTMI 
TaxTMI 
2022 (1) TMI 1407
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....d upon the show cause notice as well as the statements of those persons recorded by the department with the justification. 4. On 10.10.2018 the original adjudicating authority had rejected the application for cross examination ex-parte without giving an opportunity of hearing. 4.1 On 24.10.2018 the petitioner had submitted the written submissions in support of the application for cross examination and urged for re-consideration. 4.2 After considering the request, the adjudicating authority agreed and allowed the cross examination of the persons mentioned in the application for examination, whose statements had been relied upon in the show cause notice and accordingly, the cross examination was permitted to be conducted. 5. On 26.03.2019 the petitioner again requested for the cross examinations of the persons, whose statements were not relied upon, but the petitioner wanted to bring on record defence witnesses by cross examination in terms of Section 9D of the Act. 6. On 28.08.2019 in response to the said submissions, the original adjudicating authority communicated to the petitioner that there is no genuine reason to ask for the cross examination and accordingly dire....
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.... to stretch this issue, but, the then learned Standing Counsel was expected to guide the officer concerned dispassionately and as otherwise needed as Court Officer. The order-in-original is passed in complete disregard to the adjournment sought by the respondent and assurance given to the Court even while urgency was made. It would be worthwhile to reproduce the relevant paragraph 25.2 from the order-in-original passed on 29.10.2020: - "25.2. Vide letter dated 11.09.2019 the assessee inter alia informed that they have filed Special Civil Application No. 20429 of 2019 for cross examination with respect to impugned Show Cause Notice. The SCA no. 20429/2019 is pending decision as on date. No stay has been granted by Hon'ble H.C. in the present matter. Since there is no stay from Hon'ble H.C. of Gujarat, in order to initiate adjudication proceedings, vide this office letter dated 27.05.2020 a legal opinion was sought for from the Senior Standing Counsel for this matter. On 05.06.2020 he strongly recommended to issue a simple letter intimating the next date of hearing and then must go on. Since total four Personal hearings have already been granted to the assessee by the presen....
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....pplication No.20429 of 2019. According to the respondent, once the Court has thought it fit not to interfere with the order, the petitioner cannot make an attempt to go behind the said order. 15.2 It is the grievance on the part of the respondent that there is no liberty reserved in favour of the petitioner to make such an application and hence, this is clearly an attempt to overreach the Court's process. The Court had directed the authority to proceed and conclude within a period of 12 weeks and the petitioner was directed to cooperate, however, he has chosen to prefer an application on 09.11.2021 which is bad in law. 15.3 It is further the say of the respondent that the mandate of Section 14 of the Act is in reference to inquiry. Central Excise Officer has power to summon any person to give evidence in inquiry. The investigation may be extended to the person, whose attendance may be considered necessary. The genesis of investigation culminates into the charge memorandum, which rest on such evidence. The witness was evidenced is sought to be relied upon. According to the respondent, these are not the circumstances, which can be considered proper as the petitioner has approac....
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.... question of maintainability of the petition being a jurisdictional issue is required to be addressed at the outset. In this regard it may be apposite to refer to the decision of this court in Manek Chemicals Pvt. Ltd. v. Union of India, 2016 (334) ELT 302, wherein this court was called upon to decide similar issues as have arisen in the present case. The court held thus: "18. At this juncture, reference may be made to the following decisions: - 18.1 In Lachhman Das, Tobacco Dealers v. Union of India, (supra), the Delhi High Court held thus: - "4. The main attack of the learned Counsel was based on denial of natural justice as discussed in the earlier part of the judgment. In my opinion, denial of an opportunity to examine the Chemical Examiner constitutes such violation of natural justice as will entail the setting aside of the impugned orders. The petitioner was entitled to examine the Chemical Examiner to find out the basis of his report and also the treatment according to the sample between the period it was taken and analysed. For this reason, the three main orders have to be quashed." 18.2. In Mahek Glazes Pvt. Ltd. v. Union of India (supra....
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....Commissioner has already decided such an issue, however, since we are quashing the order, this part of the order would also not survive and hence, the requirement of a fresh order. We are informed that the same officer continues to hold the office of the Commissioner of Customs & Central Excise, Surat-II. It would therefore, be not necessary to separately hear the petition once again before passing any such order. This would, however, not preclude the Commissioner from requiring the petitioners to show relevance for seeking cross-examination of the witnesses." 18.3 The Supreme Court in the case of Ayaaubkhan Noorkhan Pathan v. State of Maharashtra and Others, (2013) 4 SCC 465, has held thus:- "24. A Constitution Bench of this Court in State of M.P. v. Chintaman Sadashiva Waishampayan held that the rules of natural justice require that a party must be given the opportunity to adduce all relevant evidence upon which he relies, and further that, the evidence of the opposite party should be taken in his presence, and that he should be given the opportunity of cross examining the witnesses examined by that party. Not providing the said opportunity to cross examine witn....
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....ion of India v. P.K. Roy and Channabasappa Basappa Happali v. State of Mysore.) In Transmission Corpn. of A.P. Ltd. v. Sri Rama Krishna Rice Mill, this Court held: "9. In order to establish that the cross examination is necessary, the consumer has to make out a case for the same. Merely stating that the statement of an officer is being utilised for the purpose of adjudication would not be sufficient in all cases. If an application is made requesting for grant of an opportunity to cross-examine any official, the same has to be considered by the adjudicating authority who shall have to either grant the request or pass a reasoned order if he chooses to reject the application. In that event an adjudication being concluded, it shall be certainly open to the consumer to establish before the appellate authority as to how he has been prejudiced by the refusal to grant an opportunity to cross examine any official." 28. The meaning of providing a reasonable opportunity to show cause against an action proposed to be taken by the Government, is that the Government servant is afforded a reasonable opportunity to defend himself against the charges, on the basis of which an inqu....
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....ings before it in a manner which is contrary to the rules of natural justice, and all accepted rules or procedure and which offends the superior Court's sense of fair play, the superior Court may quite properly exercise its power to issue the prerogative writ of certiorari to correct the error of the Court or the Tribunal at first instance, even if an appeal to another inferior Court or Tribunal was available and recourse was not had to it. In C.I.T. v. Chhabil Dass Agarwal (supra) on which reliance had been placed by the learned counsel for the respondent, the Supreme Court held thus:- "15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy, i.e., where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Than singh Nathmal case, Titaghur Paper Mills case and other similar judgments that the High Court will not entertain a p....
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....-examine ought or to have opportunity to effectively exercise that right is an essential part of principles of natural justice. Under the circumstances, the adjudicating authority was required to give fair opportunity to the petitioner to not only deal with the report of the CRCL, which was received subsequently but also to give an opportunity to the petitioner to cross examine the Director (Revenue Laboratories) in respect of the contents of the report and the inferences drawn therein. Non-grant of opportunity to cross-examine the Director (Revenue Laboratories) in respect of the report on which reliance has been placed by the adjudicating authority, also amounts to breach of principles of natural justice. Insofar as the decision of the Bombay High Court in Patel Engineering Limited v. Union of India (supra) on which reliance has been placed on behalf of the respondents, this court is of the view that the same does not in any manner further the case of the respondents, inasmuch as, in the facts of the said case the several opportunities were granted to the assessee to make submissions with regard to the findings of the report of the expert committee and the court upon considering ....
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....cution witnesses and those who are already relied upon by the Revenue when have already been cross-examined, defence cannot request to cross-examine witnesses whose statements have not been relied upon by the Revenue without examining them as defence witnesses. No interference in that count would be necessary. 11. We noticed that the emphasis before this Court was also on the subsequent submissions made on 06.09.2019 by way of another application by the learned counsel relying on the decision of M.S.Naina (supra) and urging the authority concerned to permit some of these witnesses to be examined as the defence witnesses. The Court cannot be oblivious of the fact that this was subsequent to the passing of the order dated 28.08.2019 and not prior to that. Not only the very basis was lacking, the Court also cannot be oblivious of the fact that after the passing of the order, if any improvisation is being made that cannot be permitted to be change the very edifice. Therefore, while holding in principle that it is the right of the parties to make a request for the defence witnesses of even those witnesses who have been dropped out by the Revenue, the request, in the instant cas....
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....pt of copy of this order. 16. Petition is disposed of in above terms." 17. Thus, what has been made clear is that the subject to the statutory provision of Section 128 of the Act, it is the right of the parties in the adjudicatory process as to whom they need to bring on record as defence witnesses. It is held that it is the right of the parties against whom the show cause notices issued to call those persons to make a request for the defence witnesses of even those witnesses who have been dropped out by the department to be examined as defence witnesses. The Court also noted that the petitioner had desired the cross examination of those witnesses, whose statements had been recorded and not relied upon in the show cause notice. Therefore, it was held that the same was impermissible as no one can be cross examined without being examined by one of the parties as the witness. 17.1 The Court also noticed that some of the witnesses were urged to be examined as the defence witness however, such request was made subsequent to 28.08.2019 and not prior thereto, thus the very base was lacking. Thus, while holding in principle that it is right of a party to make a request for d....
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.... be cross-examined by them on the statements made before the Customs Authorities. Accordingly we hold that there is no force in the third contention of the appellant." 21. The denial has come quoting the provision of Section 9 D of the Act and other decisions. Apt would be to refer to Section 9 D & Section 14 of the Act. "SECTION 9D. Relevancy of statements under certain circumstances. - (1) A statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, - (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circums....
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....ain description in possession or under the control of the person summoned. It is obligatory on the part of the persons so summoned to attend either in person or by an authorised agent as may be directed by the officer and they are bound to state the truth upon any subject respecting which they are examined or make statements to produce such documents and other things. 21.2 Section 9 D of the Act provides for relevancy of statements under certain circumstances. A statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant for the purpose of proving in any prosecution for an offence under this Act the truth of the facts which it contains. When the person, who made the statement is dead or cannot be found, or is incapable of giving evidence or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense, which the Court may consider unreasonable or when the person who made the statement is examined as a witness before the Court and the Court is of the opinion that having regard to the circumstances of the case, the....