2014 (4) TMI 463 - HC - Central Excise

Demand to the duty - Shortage in stock - Clandestine removal of goods - opportunity of cross examination of the witnesses - Held that - From the record, it reveals that the first date was fixed on 24.08.2009. On 17.09.2009 the respondent wrote a letter to the department asking for the copy of the relied upon documents and the statements of the witnesses. The next date fixed was 24.09.2009. On 22.10.2009 the copies of the statements and the relied upon documents have been provided to the respondent. On the receipt of such documents, the respondent filed the reply on 17.11.2009 and requested for cross examination of the witnesses, whose statements were sought to be relied upon in the show cause notice. The said request was within the reasonable time and cannot be said to be after unreasonable delay. 20.11.2009 was the date fixed. On 19.11.2009 again the request was made for giving the opportunity of cross examination. If the authority wants to rely upon the statement of any witness, the opportunity of cross examination ought to have been given to enable the party to prove its case. Non providing of the opportunity of cross examination amounts to violation of the natural justice and in absence of denial of natural justice, such documents cannot be relied upon - order of tribunal remanding the matter back sustained - Decided against Revenue.

Summary

Issues:
Appeal against demand of duty and penalty arising from a common order of the Customs, Excise & Service Tax Appellate Tribunal; Request for cross-examination of witnesses; Violation of natural justice by not providing opportunity for cross-examination.

Analysis:
The judgment involves multiple appeals arising from a common order of the Customs, Excise & Service Tax Appellate Tribunal related to the demand of duty and imposition of penalties. The case pertains to a manufacturer of Gutkha where a search revealed a shortage of perfume leading to a duty demand of Rs. 1,35,91,459. The respondents requested cross-examination of witnesses, but the authorities proceeded without granting this opportunity. The Tribunal set aside the order, directing fair cross-examination opportunity. The appellants argued against the cross-examination request, claiming it was untimely. However, the Court found the request was made within a reasonable timeframe and upheld the importance of cross-examination in quasi-judicial proceedings. Citing a precedent, the Court emphasized that denial of cross-examination violates natural justice. Consequently, the Court upheld the Tribunal's decision, dismissing all appeals as they found no error in the impugned order necessitating intervention.

This judgment delves into the fundamental principle of natural justice and the right to cross-examination in quasi-judicial proceedings. The Court highlighted the significance of providing the opportunity for cross-examination when relying on witness statements. It underscored that failure to allow cross-examination constitutes a violation of natural justice, rendering such documents unreliable. By referencing a relevant case law, the Court reinforced the importance of the accused or noticee's right to cross-examine witnesses, as it can significantly impact the outcome of the proceedings. Ultimately, the Court upheld the Tribunal's decision, emphasizing the critical nature of ensuring procedural fairness and adherence to principles of natural justice in legal proceedings.