TaxTMI 
TaxTMI 
TaxTMI 
2026 (2) TMI 675
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....ed on 15.10.2010 and 22.11.2010 to ascertain whether Sh. Sidhartha Agicha was his employee but he did not comply with the summons and did not appear. He has sent a letter dated 30.11.2010 through his Advocate Shri Prem Ranjan Kumar wherein he stated that Shri Sidhartha Aghicha was never under the employment of his client (Shri Ashok Singhla). Shri Sidhartha Aghicha has submitted his bank statement wherein an amount of Rs. 20,000/- per month was deposited as salary received by him from Shri Sidhartha Aghicha as stated by him in his statement. Information called from the Bank from where the cheques were cleared revealed that the cheques were issued from the account of M/s Jineshwar Trade Pvt. Ltd., 33, Vasudha Enclave, Pitampura, Delhi where Shri Ashok Singhla was an authorized signatory. From this it appears that the information furnished by Shri Ashok Singhla was incorrect and his nexus with Sh. Sidhartha Agicha who was one of the Directors of M/s Tavistock Tavistock Trading Ltd., company formed in Hong Kong could not be ruled out." (emphasis supplied) 3. The Commissioner has dealt with the matter of the appellant in paragraph 161 of the impugned order and the relevant portio....
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....ficers, then how was it in his knowledge that Shri Siddharth Agicha was a Director in M/s Tavistock Trading Ltd. I am of the considered opinion that the noticee was in fact knowing all the facts of the case and the illegal imports indulged in by Shri Lokesh Garg and Shri Manish Jalhotra through the shell company of M/s Tavistock Trading Ltd. and he was also aware that Shri Siddharth Agicha is one of the Director alongwith Shri Lokesh Garg in this company. He feared that his interrogation would establish his complicity in the case and he would then have face the consequences which he wanted to evade at all costs. Further, I find that there are absolutely no merits in the submissions of the noticee that Shri Siddharth Agicha was not his employee. In fact, I find that there is sufficient evidence on record to prove that Shri Ashok Singhla was the person with whom Shri Sidhartha Aghicha was employed. I find that Shri Sidhartha Aghicha had submitted his bank statement wherein an amount of Rs.20,000/- per month was deposited as salary received by him from Shri Sidhartha Aghicha as stated by him in his statement dated 9.3.2010(RUD-21 to the SCN). Further information called from the bank f....
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....d order and submitted that it does not call for any interference in this appeal. 6. As noticed above, the impugned order is based on the statement of Sidhartha Aghicha made on 25.08.2010 under section 108 of the Customs Act and the reply submitted by the learned counsel for the appellant in response to the summons dated 23.11.2010. The Commissioner has concluded from them that Sidhartha Aghicha was an employee of the appellant. 7. The Commissioner has noted in the impugned order that the information called from the Bank from where the cheques were cleared revealed that the cheques were issued from the account of M/s Jineshwar Trade Pvt Ltd where the appellant was an authorized signatory. This only confirms the contention of the appellant that Sidhartha Aghicha was not his employee but an employee of M/s Jineshwar Trade Pvt Ltd. The appellant may be the Director and an authorized signatory of M/s Jineshwar Trade Pvt Ltd0 but this does not mean that merely because cheques were issued from the account of M/s Jineshwar Trade Pvt Ltd, Sidhartha Aghicha would be his employee. The conclusion drawn by the Commissioner in the impugned order is, therefore, perverse. 8. It also trans....
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.... Gazetted Officer of customs 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 circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a court, as they ap ply in relation to a proceeding before a court." Central Excise Act 14. Section 14 of the Central Excise Act deals with power to summon persons to give evidence and produce documents in inquiries und....
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....de the statement is examined as a witness before the Court and such Court is of the opinion that having regard to the circumstances of the case, the statement should be admitted in evidence, in the interests of justice, except where the person who tendered the statement is dead or cannot be found. In view of the provisions of sub-section (2) of section 9D of the Central Excise Act or sub-section (2) of section 138B of the Customs Act, the provisions of sub-section (1) of these two Acts shall apply to any proceedings under the Central Excise Act or the Customs Act as they apply in relation to proceedings before a Court. What, therefore, follows is that a person who makes a statement during the course of an inquiry has to be first examined as a witness before the adjudicating authority and thereafter the adjudicating authority has to form an opinion whether having regard to the circumstances of the case the statement should be admitted in evidence, in the interests of justice. Once this determination regarding admissibility of the statement of a witness is made by the adjudicating authority, the statement will be admitted as an evidence and an opportunity of cross-examination of the ....
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....t out the circumstances in which a statement, made and signed by a person before the Central Excise Officer of a gazetted rank, during the course of inquiry or proceeding under the Act, shall be relevant, for the purpose of proving the truth of the facts contained therein. 16. Section 9D of the Act came in from detailed consideration and examination, by the Delhi High Court, in J.K. Cigarettes Ltd. v. CCE, 2009 (242) E.L.T. 189 (Del.). Para 12 of the said decision clearly holds that by virtue of sub-section (2) of Section 9D, the provisions of sub-section (1) thereof would extend to adjudication proceedings as well. ***** 22. If none of the circumstances contemplated by clause (a) of Section 9D(1) exists, clause (b) of Section 9D(1) comes into operation. The said clause prescribes a specific procedure to be followed before the statement can be admitted in evidence. Under this procedure, two steps are required to be followed by the adjudicating authority, under clause (b) of Section 9D(1), viz. (i) the person who made the statement has to first be examined as a witness in the case before the adjudicating authority, and (ii) the adjudicati....
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....tents thereof, he has to first admit the statement in evidence in accordance with clause (b) of Section 9D(1). For this, he has to summon the person who had made the statement, examine him as witness before him in the adjudication proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice. 26. In fact, Section 138 of the Indian Evidence Act, 1872, clearly sets out the sequence of evidence, in which evidence-in-chief has to precede cross-examination, and cross-examination has to precede re-examination. 27. It is only, therefore, - (i) after the person whose statement has already been recorded before a gazetted Central Excise Officer is examined as a witness before the adjudicating authority, and (ii) the adjudicating authority arrives at a conclusion, for reasons to be recorded in writing, that the statement deserves to be admitted in evidence, that the question of offering the witness to the assessee, for cross-examination, can arise. 28. Clearly, if this procedure, which is statutorily prescribed by plenary parliamentary legislation, is....
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....egislative scheme, therefore, is to ensure that the statement of any person which has been recorded during search and seizure operations would become relevant only when such person is examined by the adjudicating authority followed by the opinion of the adjudicating authority then the statement should be admitted. The said provision in the statute book seems to have been made to serve the statutory purpose of ensuring that the assessee are not subjected to demand, penalty interest on the basis of certain admissions recorded during investigation which may have been obtained under the police power of the Investigating authorities by coercion or undue influence. 9.5 ***** The provisions contained in Section 9D, therefore, has to be construed strictly and held as mandatory and not mere directory. Therefore, unless the substantive provisions contained in Section 9D are complied with, the statement recorded during search and seizure operation by the Investigation Officers cannot be treated to be relevant piece of evidence on which a finding could be based by the adjudicating authority. A rational, logical and fair interpretation of procedure clearly spells out that before the st....
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....to change our view, on the basis of the various statements, recorded under Section 108 of the Act, on which the Learned ASG sought to rely. Statements, under Section 108 of the Act, we may note, though admissible in evidence, acquire relevance only when they are, in fact, admitted in evidence, by the adjudicating authority and, if the affected assessee so chooses, tested by cross-examination. We may, in this context, reproduce, for ready reference, Section 138B of the Act, thus : ***** A Division Bench of this Court has, speaking through A.K. Sikri, J. (as he then was) held, in J & K Cigarettes Ltd. v. Collector of Central Excise [2009 (242) E.L.T. 189 (Del.)] that, by virtue of sub-section (2), Section 138B(1) of the Act would apply, with as much force, to adjudication proceedings, as to criminal proceedings. ***** We express our respectful concurrence with the above elucidation of the law which, in our view, directly flows from Section 138B(1) of the Act - or, for that matter, Section 9D of the Central Excise Act, 1944. 77. The framers of the law having, thus, subjected statements, recorded under Section 108 of the Act, to such a searching and ....
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....refore, the 35 statements relied upon in the SCN are not relevant and hence also not admissible." (emphasis supplied) 23. A Division Bench of this Tribunal in Surya Wires after examining the aforesaid decisions of the High Court held that the statements made under section 108 of the Customs Act during the course of an inquiry under the Customs Act shall be relevant for the purpose of proving the truth of the facts contained in them only when such persons are examined as witnesses before the adjudicating authority and the adjudicating authority forms an opinion that the statements should be admitted in evidence. 24. It, therefore, transpires from the aforesaid decisions that both section 138B(1)(b) of the Customs Act and section 9D(1)(b) of the Central Excise Act contemplate that when the provisions of clause (a) of these two sections are not applicable, then the statements made under section 14 of the Central Excise Act or under section 108 of the Customs Act during the course of an inquiry under the Acts shall be relevant for the purpose of proving the truth of the facts contained in them only when such persons are examined as witnesses before the adjudicating authority a....