2016 (8) TMI 837 - 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 05.04.2016 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 06.07.2012 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 Harayana 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 20.05.2016, 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

Summary

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

Detailed Analysis:

Rejection of the Request for Cross-Examination of Witnesses:
The appellant challenged the Principal Commissioner's decision rejecting their request for cross-examination of Shri Anmol Mishra and Ramesh Kumar Dammani, communicated via a letter dated 20.05.2016. The Commissioner’s decision was based on the premise that since these individuals were co-noticees, compelling them to be present for cross-examination could lead to self-incrimination. This decision relied on the precedent set in A K Jayasankaran Nambir, J N S Mahesh Versus Commissioner of Customs, Cochin, where the tribunal observed that a co-noticee could not be compelled for cross-examination to avoid self-incrimination.

Maintainability of an Appeal Against the Decision Rejecting Cross-Examination:
The Tribunal raised a preliminary query on whether an appeal would lie against the decision rejecting the request for cross-examination. The appellant argued that the definition of "adjudicating authority" under the Central Excise Act included any authority competent to pass any order or decision, thus making the decision appealable. The appellant supported this contention with judgments from J & K Cigarettes Ltd v CCE and Swiber Offshore Construction Pvt Ltd v CC, which recognized the maintainability of appeals against decisions rejecting cross-examination requests. Conversely, the respondent cited Delta Overseas v Commissioner of C.Ex & S.T and Jhaveri Polymers Pvt Ltd v CCE to argue that such appeals were not maintainable. The Tribunal, however, ruled in favor of the appellant, referencing the Delhi High Court's judgment in J & K Cigarettes and the Tribunal's decision in Swiber Offshore, concluding that an appeal is indeed maintainable against the decision rejecting cross-examination.

Compliance with Section 9D of the Central Excise Act, 1944:
The appellant contended that the statements recorded under Section 14 of the Act could not be relied upon unless the conditions of Section 9D were met. Specifically, the appellant emphasized that the statements could only be admitted as evidence if the maker of the statement was examined in chief and allowed for cross-examination. The Tribunal noted that the impugned communication did not address the appellant's request for records of examination-in-chief of all witnesses whose statements were relied upon in the Show Cause Notice, thus failing to comply with Section 9D. The Tribunal highlighted that the law requires the adjudicating authority to first examine the witness in chief, form an opinion on the admissibility of the statement, and then allow cross-examination. This process ensures that statements recorded under coercion or compulsion during investigation are not admitted without proper scrutiny.

The Tribunal cited multiple judicial authorities, including the Supreme Court's judgments in Arya Abhushan Bhandar v UOI and Swadeshi Polytex Ltd v CCE, which affirmed the necessity of cross-examination for statements to be considered as evidence. The Tribunal also referenced the recent judgment of the Punjab & Haryana High Court in Ambika International v UOI, which reiterated the procedural requirements under Section 9D.

Conclusion:
The Tribunal allowed the appeal, setting aside the decision communicated by the letter dated 20.05.2016, and remanded the matter to the Principal Commissioner for adjudication in compliance with Section 9D of the Act. The Tribunal directed that the adjudicating authority must summon the witnesses for examination-in-chief, provide the records to the appellant, and allow cross-examination if requested. The statements not subjected to this process must be eschewed from evidence. The operative part of the judgment was pronounced in open court on 23.06.2016.