2016 (7) TMI 870 - HC - Central Excise

Demand of duty - seeking permission to cross-examine two of the persons from whom statements have been recorded, which appears to be the basis for issuance of the show cause notice dated 02.01.2007 - violation of principles of natural justice - whether the authority could have proceeded to adjudicate the matter and pass the final order, without acceding to the request made by the petitioners for cross-examination of two of the persons, from whom statements were recorded by the department. Held that - rom paragraph No.8 of the impugned order it is seen that the officer has proceeded to adjudicate the matter by recording that the Consultant, who appeared on behalf of the petitioners, had not pressed for cross-examination of the other witnesses. This according to the petitioners is factually an incorrect statement, as the petitioners wanted to cross-examine those two witnesses, since the quantification made in the show cause notice was on the basis of the statements recorded from those witnesses. The writ petitions are allowed and the impugned order is set aside and the matter is remanded to the respondent for fresh consideration and fresh adjudication shall be made by a different officer, as observed supra and while doing so, the statements recorded from V.Kumaraswamy and S.Padmanabhan shall be eschewed. The petitioners shall appear before the adjudicating authority and co-operate in the adjudicating proceedings by advancing oral and written submissions.

Summary

Issues:
Opportunity for cross-examination denied by adjudicating officer.

Analysis:
The judgment involves writ petitions challenging an order passed by the Joint Commissioner without affording an opportunity for cross-examination to the petitioners. The Commissioner(Appeals) had earlier remanded the matter due to a violation of natural justice principles. The petitioners requested to cross-examine two job workers, V.Kumaraswamy and S.Padmanabhan, whose statements formed the basis of the show cause notice. The officer proceeded to adjudicate without allowing cross-examination, claiming the petitioners did not press for it, which was disputed. The Department attempted to summon the witnesses for cross-examination, but they were unavailable. Despite this, the adjudicating authority relied on their statements for quantification. The Court held that if witnesses are unavailable for cross-examination, their statements cannot be relied upon, and the petitioners should have been given a fair chance to contest without reference to those statements. The judgment emphasized the need to remand the matter for fresh consideration by a different officer to ensure adherence to natural justice principles.

In conclusion, the writ petitions were allowed, setting aside the impugned order and remanding the matter for fresh adjudication by a different officer. The statements from the unavailable witnesses were to be disregarded, and the petitioners were directed to participate in the proceedings. The judgment aimed to uphold the principles of natural justice and ensure a fair hearing for the petitioners.