2016 (8) TMI 845 - 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 18.2.2016 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 11.05.2011 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 18.03.2016, 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.
2. Applicability of Section 9D of the Central Excise Act, 1944.
3. Maintainability of an appeal against the decision rejecting cross-examination.
4. Compliance with the principles of natural justice.

Analysis:

1. Rejection of the Request for Cross-Examination:
The appellant challenged the decision of the Principal Commissioner, communicated via a letter dated 18.03.2016, which rejected their request for cross-examination of Shri J.C. Solanki and other witnesses. The appellant argued that under Section 9D of the Central Excise Act, a statement recorded before a gazetted Central Excise officer is only relevant if the maker of the statement is examined in chief and cross-examination is allowed. The Commissioner’s response indicated that Shri J.C. Solanki, being a co-noticee, could not be compelled for cross-examination, citing the case of A K Jayasankaran Nambiar v. Commissioner of Customs, Cochin.

2. Applicability of Section 9D of the Central Excise Act, 1944:
Section 9D outlines the conditions under which statements made before a gazetted Central Excise officer can be considered relevant. These include situations where the person who made the statement is dead, cannot be found, is incapable of giving evidence, is kept out of the way by the adverse party, or cannot be obtained without unreasonable delay or expense. If none of these conditions are met, the person must be examined in chief before the adjudicating authority, which then decides if the statement should be admitted in evidence. The appellant emphasized that the adjudicating authority must follow this procedure, as supported by multiple judicial precedents, including the judgments in Arya Abhushan Bhandar v. UOI and Swadeshi Polytex Ltd v. CCE.

3. Maintainability of an Appeal Against the Decision Rejecting Cross-Examination:
The appellant argued that the decision rejecting the request for cross-examination is appealable under the Central Excise Act. The Tribunal agreed, referencing the Delhi High Court's judgment in J & K Cigarettes Ltd v. CCE, which stated that decisions under Section 9D could be challenged through statutory appeals. The Tribunal also cited its own decisions in Swiber Offshore Construction Pvt Ltd v. CC and other cases, which upheld the right to appeal against such decisions.

4. Compliance with the Principles of Natural Justice:
The Tribunal noted that the principles of natural justice require that statements relied upon in adjudication must be subject to cross-examination. This is to ensure fairness and transparency in the adjudication process. The Tribunal highlighted that the adjudicating authority must examine the witness in chief and allow cross-examination if the statement is to be used as evidence. This was supported by various judicial authorities, including the judgments in Sukhwant Singh v. State of Punjab and Sharadamma v. Kenchamma.

Conclusion:
The Tribunal allowed the appeal, setting aside the decision communicated by the letter dated 18.03.2016. The matter was remanded to the Principal Commissioner with directions to adjudicate the Show Cause Notice in compliance with Section 9D of the Act. The adjudicating authority must follow the procedure outlined in the judgment of the Punjab & Haryana High Court in Ambika International v. UOI, which includes examining the witnesses in chief, providing records of such examination to the appellant, and allowing cross-examination if requested. The Tribunal emphasized the importance of adhering to the principles of natural justice and the statutory requirements of Section 9D.

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