2015 (12) TMI 1206 - HC - Central Excise

Duty demand - Request restraining the respondent no.2 from proceeding any further with reference to the show cause notice, without calling for the witnesses, who have been requested for cross-examination - Held that - requirement is only of affording an opportunity for that purposes and nothing beyond it. We are also of the opinion that 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. - Appeal disposed of.

Summary

Issues:
- Petitioner seeks a writ of mandamus for cross-examination of informants.
- Legal position on reliance upon informant statements.
- Department's discretion in relying on informant evidence.
- Assessee's right to question the order through appeal.

Analysis:
The petitioner in this case sought a writ of mandamus directing the Commissioner of Central Excise to permit cross-examination of all fifteen witnesses who provided information leading to a show cause notice. The court acknowledged the settled legal position that the statement of an informant cannot be relied upon without providing the assessee with an opportunity for cross-examination. However, the court clarified that the Department has the discretion to rely on the evidence of only a subset of informants if necessary, and the assessee cannot insist on cross-examining all informants, especially if their statements are not relied upon for the demand. The court emphasized that the assessee can challenge the final order if there are concerns about natural justice or legal principles by filing an appeal before the appropriate authority.

In conclusion, the court disposed of the writ petition with the observation that the Department has the discretion to rely on informant evidence as deemed necessary, and the assessee's right to challenge the order through an appeal remains intact.