2017 (6) TMI 852 - AT - Central Excise

Natural justice - denial of cross-examination - CENVAT credit - fake invoices - it was alleged that only on the basis of input invoices without receiving goods mentioned against those invoices in their factory premises - Held that - the adjudicating authority ought to have allowed cross-examination of these witnesses - it has been held in a series of cases including in the case of Andaman Timber Industries Vs. C.C.E., Kolkata II 2015 (10) TMI 442 - SUPREME COURT that the statement of the persons relied upon in confirming the demand be allowed to be cross-examined - appeals are allowed by way of remand to the adjudicating authority for deciding the issue afresh after allowing cross-examination witnesses - appeal allowed by way of remand.

Summary

Issues: Cross-examination of witnesses denied in a case involving alleged wrongful CENVAT credit availed by a manufacturer of copper articles.

Cross-examination of witnesses:
The appeal was filed against the Order-in-Appeal passed by the Commissioner (Appeals) regarding the denial of CENVAT credit on copper ingots by the appellants. The appellants requested cross-examination of witnesses, including brokers and concerned persons, whose statements were relied upon in confirming the demand. The adjudicating authority denied the cross-examination without a valid reason. The appellant cited the decision of the Hon'ble Supreme Court in Andaman Timber Industries Vs. C.C.E., Kolkata II, emphasizing the importance of allowing cross-examination of relied-upon witnesses. The Tribunal found that the denial of cross-examination was unjustified, and the impugned order was set aside. The appeals were allowed, and the case was remanded to the adjudicating authority for a fresh decision after allowing cross-examination of the witnesses and providing a reasonable opportunity of hearing to the appellants. The denovo proceeding was instructed to be completed within four months, with the appellants directed to cooperate without seeking unnecessary adjournments.

This detailed analysis of the judgment highlights the crucial issue of cross-examination of witnesses in a case involving the denial of CENVAT credit, emphasizing the importance of procedural fairness and adherence to legal principles in such matters.