2012 (8) TMI 1141 - HC - Customs

Summary

Issues Involved:
1. Non-grant of permission for cross-examination of witnesses.
2. Validity of statements recorded u/s 14 of the Central Excise Act.
3. Reliance on the Tribunal's earlier order regarding breach of principles of natural justice.

Summary:

Issue 1: Non-grant of permission for cross-examination of witnesses
The appellant - Commissioner of Central Excise and Customs challenged the Tribunal's order dated 25th May, 2005, which allowed the respondents' appeals by setting aside the adjudicating authority's order. The Tribunal had previously remanded the matter, directing the adjudicating authority to permit cross-examination of witnesses. However, the adjudicating authority misconstrued the Tribunal's directions, denying the respondents the opportunity to cross-examine all witnesses and placing the onus on the respondents to produce the witnesses themselves. The Tribunal found this to be a breach of the principles of natural justice, as the adjudicating authority relied on testimonies of witnesses who were not offered for cross-examination.

Issue 2: Validity of statements recorded u/s 14 of the Central Excise Act
The appellant argued that the statements recorded u/s 14 of the Central Excise Act were never retracted and were supported by corroborative evidence. However, the Tribunal held that without the opportunity for cross-examination, such statements could not be relied upon. The Tribunal cited Supreme Court judgments to support the principle that testimony of witnesses not offered for cross-examination cannot be used in adjudication.

Issue 3: Reliance on the Tribunal's earlier order regarding breach of principles of natural justice
The Tribunal's earlier order dated 21st February, 2000, had directed the adjudicating authority to allow cross-examination of witnesses. The adjudicating authority's failure to comply with this direction led the Tribunal to conclude that there was a breach of natural justice. The Tribunal examined the demands in relation to each group independently and found that the demands were not justified in the absence of evidence. The Tribunal's conclusions were based on findings of fact after appreciating the evidence on record, and no contrary evidence was presented by the appellant to dislodge these findings.

Conclusion:
The High Court affirmed the Tribunal's findings, holding that the adjudicating authority's reliance on testimonies without allowing cross-examination was a breach of natural justice. The appeal was dismissed, and the Tribunal's order was upheld.