2013 (3) TMI 498 - HC - Central Excise

Evasion of Central Excise Duty - search operations conducted - petitioner vehemently contended that neither the Investigation Officer nor any of the members of the Investigating team shall be present during cross-examination proceedings and they shall not do re-examination, since the same would influence the entire proceedings in favour of the Department & the Investigation Officer and the Adjudication Officer shall not be one and the same - Held that - Not able to understand as to how the presence of the Investigation Officer in the cross-examination proceedings or re-examinations of witnesses would amount to abdication of authority by the second respondent. In fact, if the second respondent refused to permit the presence of Investigation Officer during cross-examination of the witnesses and refused permission to Investigation Officer for re-examination of witnesses, the same would amount to abdication of its authority, particularly in view of judgements relied on by the Department of Sanghi Textiles Processors Pvt. Ltd. vs. C.C. Excise (1990 (8) TMI 160 - HIGH COURT OF ANDHRA PRADESH AT HYDERABAD) wherein a similar objection made by the petitioner was rejected stating that the Excise Department which had initiated the proceedings before the Collector against the petitioner has aright to have the assistance of the Investigating Officers who gathered the material on the basis of which the proceedings had been initiated. Also see Lakhanpal National Ltd. Vs. U.O.I. 1992 (9) TMI 94 - HIGH COURT OF JUDICATURE AT BOMBAY . Failure to understand as to how the presence of Investigation Officer in the cross-examination proceedings and re-examination of witnesses by the Investigation Officer would be described as bias causing prejudice to the petitioner as the Investigation Officer collected statements from a witness commencing from 07.00 p.m. on 05.06.2006 and ended at 02.30 hours on the next day. The next witness was examined for half an hour from 2.30 a.m. on 06.12.2006. Hence, such an Investigation Officer shall not be allowed to be present before the adjudication authority for conducting re-examination of witnesses is unable to be appreciated the submissions made by the petitioner. If the petitioner has any grievance about the alleged irregular investigation, the same could be advanced before the second respondent and he could not ask on that pretext the exclusion of Investigation Officer in the adjudication proceedings. The Investigation Officer and the Adjudication Officer shall not be one and the same has no basis as here the Adjudication Authority is totally different from the Investigation Officer. In fact, if the Investigation Officer did not participate in the proceedings, then the petitioner could make such an allegation that the Adjudicating Authority acted as prosecutor and judge to himself. In the judgements relied on by the petitioners the investigation Authority also acted as Adjudicating Authority. Therefore, the same was disapproved by the Court. Hence those decisions have no application to the facts of the present case - writ petition dismissed.

Summary

Issues Involved:
1. Legality of the presence and participation of the Investigation Officer during cross-examination proceedings.
2. Allegation of bias due to the presence of the Investigation Officer.
3. Separation of roles between the Investigation Officer and the Adjudicating Authority.

Detailed Analysis:

1. Legality of the Presence and Participation of the Investigation Officer During Cross-Examination Proceedings:
The petitioner, a Mini Cement Plant, was subjected to a search operation by the first respondent's officers, resulting in the recovery of incriminating documents and issuance of a show cause notice demanding Central Excise duty and education cess. The petitioner sought to quash the cross-examination proceedings conducted in the presence of the Investigation Officer, arguing that this would influence the witnesses and abdicate the authority of the adjudicating officer. The respondents countered that the Investigation Officer's presence was necessary for re-examination due to the voluminous records and the officer's familiarity with the evidence. The court found no merit in the petitioner's argument, citing precedents from the Andhra Pradesh High Court and the Bombay High Court, which supported the presence of the Investigation Officer to assist in complex cases and ensure no prejudice to the department.

2. Allegation of Bias Due to the Presence of the Investigation Officer:
The petitioner argued that the presence of the Investigation Officer during cross-examination would result in bias. The court dismissed this argument, stating that the mere presence of the Investigation Officer does not constitute bias or prejudice. The court referenced several judgments (e.g., Rattan Lal Sharma v. Managing Committee, Dr. Hari Ram (Co-Education) Higher Secondary School) to illustrate that bias requires a direct influence or personal interest, which was not evident in this case. The court emphasized that the adjudicating authority's independence was not compromised by the Investigation Officer's presence.

3. Separation of Roles Between the Investigation Officer and the Adjudicating Authority:
The petitioner contended that the roles of the Investigation Officer and the Adjudicating Authority should be separate, citing the principle that no one should be a judge in their own cause. The court clarified that in this case, the Investigation Officer and the Adjudicating Authority were distinct entities. The court referenced judgments where the same individual acted as both investigator and adjudicator, which were disapproved by the courts. However, in this case, the adjudicating authority was different from the Investigation Officer, and thus, the petitioner's argument was found baseless.

Conclusion:
The court dismissed the writ petition, affirming that the presence of the Investigation Officer during cross-examination was lawful and did not constitute bias or abdication of authority. The adjudicating and investigating roles were appropriately separated, ensuring a fair process. Consequently, the connected miscellaneous petitions were also closed.