2015 (3) TMI 1221 - HC - Central Excise

Cross-examination of witnesses - restraining from proceeding any further with reference to the show cause notice - whether statement of an informant may be relied upon without providing an opportunity to cross-examine the said witness? - Held that - requirement is only of affording an opportunity and nothing beyond it. If the Department has recorded statement of fifteen informants before issuance of show cause notice, it is not necessary that the evidence of all the fifteen witnesses may be relied upon for the purposes of maintaining the demand. It is always open to the Department to rely upon the evidence of such number of informers, as may be necessary in the facts of the case. The assessee cannot insist upon cross-examination of all the informer, especially the statement of whom may not be relied upon by the Department for maintaining the demand - as and when final orders are passed and the assessee feels that there has been violation of principles of natural justice or settled principles of law, he can always question the order by filing the appeal before the appellate authority - petition disposed off - decided against petitioner.

Summary

Issues:
1. Petition seeking writ of mandamus for cross-examination of informants.
2. Legal position on reliance upon informant statements in Central Excise cases.
3. Requirement of providing opportunity for cross-examination.
4. Department's discretion in relying on informant evidence.
5. Assessee's right to challenge orders on grounds of natural justice or legal principles.

Analysis:
The judgment addresses a petition seeking a writ of mandamus to direct the Commissioner of Central Excise to allow cross-examination of informants and to restrain further action on a show cause notice without calling witnesses for cross-examination. The Court acknowledges the settled legal position that informant statements cannot be relied upon without providing the assessee an opportunity for cross-examination. It clarifies that the requirement is only to afford this opportunity and nothing more. The Court opines that the Department can choose to rely on evidence from a subset of informants as necessary, and the assessee cannot demand cross-examination of all informants, especially if their statements may not be relied upon for the demand. The judgment emphasizes that if the assessee believes there has been a violation of natural justice or legal principles, they can challenge the order by appealing to the appellate authority. Ultimately, the writ petition is disposed of with these observations.