2016 (8) TMI 836 - AT - Central Excise

Whether an appeal would lie against the decision rejecting the request for cross examination - Held that - by following the judgement of the Hon ble Delhi High Court in the case of J & K Cigarettes v CCE 2009 (8) TMI 64 - DELHI HIGH COURT and Tribunal s decision in the case of Swiber Offshore Construction Pvt Ltd v CC 2013 (11) TMI 1232 - CESTAT AHMEDABAD where it was held that it is always open to the affected party to challenge the invocation of provisions of Section 9D of the Act in a particular case by filing statutory appeal, which provides for judicial review, I am of the view that an appeal is maintainable against the decision rejecting cross examination. Even as per the provisions of Section 35B of the Act read with the definition of adjudicating authority , this Tribunal has the power to entertain an appeal against the decision rejecting cross-examination. The issues raised by the appellant, in its letter dated 24.05.2016 and argued before this Tribunal about the contention of the appellant regarding Section 9D of the Act and the manner in which it is to operate and, therefore, seeks to be provided the records of the examination-in-chief of the witnesses whose statements are referred to in the Show Cause Notice dated 16.02.2012 issued to the appellant, so that the appellant could, if necessary, seeks cross-examination of the said witnesses are no longer res-integra and stands decided by a number of authorities, most recently by Hon ble Punjab and Haryana High High Court in Ambika International & others v UOI 2016 (6) TMI 919 - PUNJAB AND HARYANA HIGH COURT . Therefore, in view of the above unequivocal expression of law as contained in a plethora of judicial authorities, the present appeal is allowed by setting aside the decision as communicated to the appellant by the impugned letter dated 03.06.2016, and the matter is remanded to the Principal Commissioner with a direction to adjudicate the Show Cause Notice strictly by complying with the mandate of Section 9D of the Act, in accordance with the directions contained in the judgment of Hon ble High Court of Punjab & Haryana in Ambika International (supra). - Appeal disposed of

Issues Involved:
1. Rejection of the request for cross-examination of witnesses.
2. Applicability of Section 9D of the Central Excise Act, 1944.
3. Maintainability of appeal against the decision rejecting cross-examination.

Detailed Analysis:

1. Rejection of the Request for Cross-Examination of Witnesses:
The appellant challenged the decision of the Principal Commissioner communicated via a letter dated 03.06.2016, which rejected their request for cross-examination of certain individuals. The Commissioner’s response was based on the premise that the individuals were co-noticees and directing them to be present for cross-examination could incriminate them. The Commissioner relied on the case of A K Jayasankaran Nambir, J N S Mahesh Versus Commissioner of Customs, Cochin [2016 (331) ELT 402 (Ker.)] to justify the rejection.

2. Applicability of Section 9D of the Central Excise Act, 1944:
The appellant argued that under Section 9D of the Act, any statement recorded before a gazetted Central Excise officer is relevant in adjudication proceedings only if the maker of the statement is examined in chief and cross-examination is allowed. The appellant requested the records of the examination in chief of the witnesses whose statements were relied upon in the Show Cause Notice dated 16.02.2012. The Tribunal noted that Section 9D mandates that a statement recorded before a gazetted officer can be treated as relevant only if the maker of the statement is examined as a witness before the adjudicating authority and the authority concludes that the statement should be admitted in evidence in the interest of justice.

3. Maintainability of Appeal Against the Decision Rejecting Cross-Examination:
The Tribunal considered whether an appeal lies against the decision rejecting the request for cross-examination. The appellant cited provisions of the Central Excise Act, 1944, and relevant case laws, including J & K Cigarettes Ltd v CCE, 2009 (242) ELT 189 (Del) and Swiber Offshore Construction Pvt Ltd v CC, 2014 (301) ELT 119, which supported the maintainability of such appeals. The Tribunal concluded that an appeal is maintainable against the decision rejecting cross-examination, overruling the preliminary objection.

Merits of the Case:
The Tribunal observed that the Commissioner’s letter did not address the appellant’s actual request for examination-in-chief records but only rejected the request for cross-examination of specific individuals. The Tribunal emphasized that the law requires the examination-in-chief of witnesses before their statements can be admitted as evidence, and the appellant must be given an opportunity for cross-examination.

Judicial Precedents and Legal Principles:
The Tribunal referred to various judicial authorities, including the Hon’ble Supreme Court and High Courts, which established that cross-examination is a fundamental right when statements are relied upon in adjudication proceedings. The Tribunal highlighted the recent judgment of the Punjab & Haryana High Court in Ambika International & others v UOI, which clarified the procedure under Section 9D of the Act.

Conclusion:
The Tribunal allowed the appeal, setting aside the Commissioner’s decision and remanding the matter for fresh adjudication. The Principal Commissioner was directed to comply with Section 9D of the Act and follow the procedure outlined by the Punjab & Haryana High Court in Ambika International, which includes examining witnesses in chief, providing examination records to the appellant, and allowing cross-examination if requested.

Operative Part:
The appeal was disposed of with directions to the Principal Commissioner to adjudicate the Show Cause Notice following the mandate of Section 9D and the directions in para 33 of the Ambika International judgment. The operative part was pronounced in open court on 23.06.2016.

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