2013 (1) TMI 900 - HC - Central Excise

Summary

Issues Involved:

1. Whether the petitioner is entitled to cross-examine witnesses before submitting a reply to the show cause notice.
2. Whether the impugned orders dated 27-11-2012 and 27-12-2012 are valid.

Summary:

Issue 1: Entitlement to Cross-Examine Witnesses Before Submitting Reply

The petitioner argued that cross-examination of witnesses whose statements were recorded by the authority was necessary prior to submitting a reply to the show cause notice, to properly defend its case. The petitioner relied on the Supreme Court decision in *Lakshman Exports Limited v. Collector of Central Excise, 2002 (143) E.L.T. 21 (S.C.)*.

The respondent contended that the petitioner could not cross-examine witnesses before submitting its reply, as adjudication had not yet commenced. The respondent relied on the decision in *Commissioner of Central Excise, Meerut-I v. Parmarth Iron Pvt. Ltd., 2010 (260) E.L.T. 514 (All.)*, which stated that cross-examination is only required after adjudication proceedings have commenced.

The Court held that the petitioner must first submit its reply to the show cause notice before being entitled to cross-examine witnesses. The Court emphasized that at the stage of the show cause notice, there is no adjudication, and it is only a step in the process of adjudication. The principles of natural justice require cross-examination only after adjudication proceedings have commenced and if the Revenue seeks to rely on the statements or documents.

Issue 2: Validity of Impugned Orders

The petitioner sought to quash the orders dated 27-11-2012 and 27-12-2012, which directed the petitioner to submit its reply to the show cause notice and denied the request for cross-examination of co-noticees.

The Court found no illegality or infirmity in the impugned orders. The Court noted that the petitioner had been given sufficient opportunity to file its reply and that repeated requests for time to file the reply were seen as delaying tactics. The Court concluded that the petitioner's insistence on cross-examination before submitting a reply was not justified.

Conclusion:

The writ petition was dismissed, and the Court upheld the validity of the impugned orders, emphasizing that cross-examination is only required after the commencement of adjudication proceedings.