2017 (4) TMI 33 - HC - Central Excise

Maintainability of petition - Principles of natural justice - non-grant of opportunity to cross examine the signatory of the CRCL report - non-grant of any opportunity of personal hearing to deal with the contents of the CRCL report - Held that - while it is true that the central issue involved in the case before the adjudicating authority relates to a classification dispute, however, it is equally true that none of the questions raised before this court relate to classification of the subject goods. The questions before this court relate only to the breach of principles of natural justice and hence, the availability of an alternative statutory remedy will not act as a bar in exercising writ jurisdiction under Article 226 of the Constitution of India. Reliance was placed upon the report of the CRCL in respect of which the petitioner was not granted any opportunity of hearing, it is manifest that there is a breach of principles of natural justice warranting interference by this court. Additionally, the petitioner has set out several grounds in the communication dated 10.02.2016 stating the reasons as to why it seeks to crosse-xamine the signatory of the CRCL report. However, the request has fallen on deaf ears. It is settled legal position that the right to crosse-xamine ought or to have opportunity to effectively exercise that right is an essential part of principles of natural justice. Under the circumstances, the adjudicating authority was required to give fair opportunity to the petitioner to not only deal with the report of the CRCL, which was received subsequently but also to give an opportunity to the petitioner to crosse-xamine the Director (Revenue Laboratories) in respect of the contents of the report and the inferences drawn therein. Non-grant of opportunity to crosse-xamine the Director (Revenue Laboratories) in respect of the report on which reliance has been placed by the adjudicating authority, also amounts to breach of principles of natural justice. Matter is restored to the file of the adjudicating authority from the stage of furnishing of the report of the chemical analyzer to the petitioner, to decide the same afresh in accordance with law, after affording the petitioner an opportunity to cross-examine - petition allowed by way of remand.

Issues Involved:
1. Breach of principles of natural justice.
2. Non-grant of opportunity to cross-examine the signatory of the CRCL report.
3. Non-grant of personal hearing to deal with the CRCL report.
4. Maintainability of the petition under Article 226 of the Constitution of India.

Issue-wise Detailed Analysis:

1. Breach of Principles of Natural Justice:
The petitioner challenged the Order-In-Original dated 19.02.2016, claiming it breached principles of natural justice. The adjudicating authority obtained a CRCL report after the personal hearing stage was over and did not provide the petitioner an opportunity to cross-examine the Director (Revenue Laboratories) or a personal hearing to address the report. The court cited several precedents emphasizing that cross-examination is an integral part of natural justice. The court concluded that the adjudicating authority's actions constituted a breach of natural justice principles.

2. Non-grant of Opportunity to Cross-examine the Signatory of the CRCL Report:
The petitioner requested to cross-examine Dr. Y.K.S. Rathore, Director (Revenue Laboratories), who signed the CRCL report. The adjudicating authority did not respond to this request and proceeded to pass the final order. The court referenced multiple judgments underscoring the necessity of cross-examination as part of natural justice. The court found that the adjudicating authority's failure to allow cross-examination violated the principles of natural justice.

3. Non-grant of Personal Hearing to Deal with the CRCL Report:
The petitioner also sought a personal hearing to address the CRCL report's contents. The adjudicating authority did not grant this request either. The court noted the petitioner's detailed communication dated 10.02.2016, which outlined reasons for disputing the CRCL report and requested both cross-examination and a personal hearing. The adjudicating authority's reliance on the CRCL report without granting a personal hearing was deemed a violation of natural justice principles.

4. Maintainability of the Petition under Article 226 of the Constitution of India:
The respondents argued that the petition should be dismissed on the grounds of maintainability, suggesting that the petitioner should have appealed to the Customs, Excise and Service Tax Tribunal. The court, however, held that issues of natural justice fall within exceptions where alternative remedies do not bar the exercise of writ jurisdiction under Article 226. The court found that the breach of natural justice principles warranted interference despite the availability of an alternative remedy.

Conclusion:
The court allowed the petition, quashing the impugned order dated 19.02.2016. The matter was restored to the adjudicating authority to decide afresh after providing the petitioner an opportunity to cross-examine the Director (Revenue Laboratories) and a personal hearing. The court emphasized that the right to cross-examine and to have an effective opportunity to exercise that right is essential to the principles of natural justice.

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