2018 (9) TMI 821 - AT - Central Excise

Principles of Natural Justice - Request of the appellant to cross examining the person declined - Held that - The Department has just issued a Show Cause Notice which is based on prima facie material and is nothing more than constituting a prima facie opinion. At the stage of Show Cause Notice, there is no adjudication. It is only a step in process of adjudication because the Show Cause Notice in itself is not an order of assessment. The said order has to be passed post issuance of Show Cause Notice after affording an opportunity of hearing the parties and after considering the evidence and material which is placed before the adjudicating authority, the Central Excise Commissioner in the present case. The question of cross examination of such persons who are not yet been classified as witness or have not yet been summoned even by the adjudicating authority, does not at all arise. The findings of the Commissioner that the persons for whom cross examination was sought have not even tendered any factual statement, the cross examination is not needed and therefore the same is denied are therefore held to have no infirmity - The appellant is first required to submit his reply to the Show Cause Notice received. No doubt, the absence of his reply will not debar him from cross examining the witnesses but the stage of cross examination is post the examination in chief of a person who has been summoned by the adjudicating authority, in his discretion after satisfying himself qua his requirement to be examined as a witness to prove the allegations of the Show Cause Notice. The request of the appellant in question was a premature request before the Commissionerate hence the Order under challenge needs no interference - The adjudicating authority below/ Commissioner is required to reconsider the request of the appellant at the appropriate stage - appeal disposed off.

Summary

Issues Involved:
1. Denial of cross-examination request.
2. Compliance with principles of natural justice.
3. Timing and procedure for cross-examination in adjudication proceedings.

Detailed Analysis:

1. Denial of Cross-Examination Request:
The appellant challenged the order of the Commissioner, which denied their request to cross-examine certain individuals as per their application dated 20.12.2017. The appellant argued that the denial violated principles of natural justice, as the Show Cause Notice relied on various letters and reports. The appellant sought to cross-examine the authors to verify the veracity of these documents. The Tribunal noted that the request was premature, as the adjudication process had not yet begun, and the individuals in question had not been summoned or examined in chief.

2. Compliance with Principles of Natural Justice:
The Tribunal emphasized that the principles of natural justice and fair play are paramount. Cross-examination is a vital tool for ensuring fairness and extracting truth. However, the right to cross-examine arises only after the examination in chief of a witness. The Tribunal cited various legal precedents, including the Supreme Court's ruling in Sukhwant Singh Vs. State of Punjab, which held that cross-examination cannot occur before a witness has been examined in chief.

3. Timing and Procedure for Cross-Examination in Adjudication Proceedings:
The Tribunal clarified that the right to cross-examine witnesses is contingent upon the commencement of adjudication proceedings. According to Section 14 of the Central Excise Act, 1944, and relevant provisions of the Civil Procedure Code (CPC) and Criminal Procedure Code (Cr.PC), the examination of witnesses follows specific procedural stages. The appellant's request for cross-examination was deemed premature as it was made before the adjudication process had begun and before the witnesses had been examined in chief. The Tribunal upheld the Commissioner's decision, noting that the appellant must first submit a reply to the Show Cause Notice. The adjudicating authority is required to reconsider the request for cross-examination at the appropriate stage, ensuring adherence to principles of fairness and natural justice.

Conclusion:
The Tribunal dismissed the appeal, affirming that the request for cross-examination was premature. The Commissioner was directed to follow proper adjudication procedures, including the examination and cross-examination of witnesses, at the appropriate stage. The Tribunal emphasized the importance of fair play and the discretionary power of the adjudicating authority, exercised with reasonable care and caution. The appeal was disposed of accordingly.