2016 (8) TMI 838 - 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 06.06.2016 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 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 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

Summary

Issues Involved:
1. Rejection of the request for cross-examination.
2. Applicability and interpretation of Section 9D of the Central Excise Act, 1944.
3. Admissibility and relevance of statements recorded under Section 14 of the Act.
4. Procedural requirements for admitting statements in evidence.

Issue-wise Detailed Analysis:

1. Rejection of the Request for Cross-Examination:
The appellant challenged the decision of the Principal Commissioner rejecting the request for cross-examination of Shri CSM Altaf Alam and Shri Kotha Venkateshwarlu, communicated via a letter dated 03.06.2016. The rejection was based on the reasoning that both individuals were co-noticees and their cross-examination could cause them to incriminate themselves, citing the case of A K Jayasankaran Nambir, J N S Mahesh Versus Commissioner of Customs, Cochin [2016 (331) ELT 402 (Ker.)]. The Tribunal, however, found that an appeal is maintainable against such a decision, referencing J & K Cigarettes Ltd v CCE, 2009 (242) ELT 189 (Del) and Swiber Offshore Construction Pvt Ltd v CC, 2014 (301) ELT 119. The Tribunal overruled the preliminary objection and proceeded to analyze the merits of the case.

2. Applicability and Interpretation of Section 9D of the Central Excise Act, 1944:
Section 9D specifies the circumstances under which statements recorded before a gazetted Central Excise officer can be admitted as evidence. The Tribunal emphasized that the statements are admissible only if the conditions under Section 9D(1)(a) are met, or if the person who made the statement is examined as a witness before the adjudicating authority, as per Section 9D(1)(b). The Tribunal referred to multiple judicial precedents, including the recent judgment of the Punjab & Haryana High Court in Ambika International & others v UOI, which clarified the mandatory nature of these provisions.

3. Admissibility and Relevance of Statements Recorded under Section 14 of the Act:
The Tribunal noted that statements recorded under Section 14 cannot be used to prove the truth of their contents unless they fall within the exceptions listed in Section 9D(1)(a) or are admitted following the procedure in Section 9D(1)(b). The Tribunal highlighted the necessity of examining the maker of the statement in chief before the adjudicating authority, who must then decide if the statement should be admitted in evidence in the interest of justice. This ensures that the statements are not admitted without proper scrutiny and the opportunity for cross-examination.

4. Procedural Requirements for Admitting Statements in Evidence:
The Tribunal reiterated the procedural requirements mandated by Section 9D(1)(b). The adjudicating authority must first examine the person who made the statement as a witness and then decide if the statement should be admitted in evidence. Only after these steps can the statement be considered relevant, and the assessee must be given the opportunity to cross-examine the witness. The Tribunal cited several judicial authorities, including Sukhwant Singh v State of Punjab (1995) 3 SCC 367 and CCE v Parmath Iron Pvt Ltd, 2010 (250) ELT 514 (All.), to support this interpretation.

Conclusion:
The Tribunal allowed the appeal, setting aside the decision communicated by the letter dated 03.06.2016. The matter was remanded to the Principal Commissioner with instructions to adjudicate the Show Cause Notice in compliance with Section 9D of the Act, following the directions from the Punjab & Haryana High Court in Ambika International. The Tribunal emphasized the necessity of examining witnesses in chief and allowing cross-examination to ensure the statements' admissibility and relevance in evidence.