2013 (7) TMI 245 - HC - Central Excise

Cross- examination of witnesses Held that - In a given situation, the cross-examination may not be permitted to test the veracity of deposition sought to be issued against a party against whom action is proposed to be taken - It was only when a deposition goes through the fire of cross-examination that a Court or a statutory authority may be able to determine and assess its probative value. Merely because the statements, according to the adjudicating officer, were recorded without threat, duress or coercion or that the witnesses at no stage retracted their statements, cannot be a ground for rejecting the request for cross-examination. - Decision in Telestar Travels (P.) Ltd. v. Special Director of Enforcement 2013 (2) TMI 396 - SUPREME COURT followed - Decided in favor of Assessee.

Summary

Issues:
- Whether the respondents were entitled to cross-examine various witnesses relied upon by the Department during adjudication proceedings.

Analysis:
The case involved Tax Appeals arising from a judgment of the Customs Excise and Service Tax Appellate Tribunal. The central issue was whether the respondents had the right to cross-examine witnesses whose statements were relied upon by the Department to establish evasion of duty. The Department had recorded statements of various individuals to prove that no goods were genuinely transported or received by the respondents, alleging a large-scale duty evasion. The Tribunal had to determine if the respondents were entitled to cross-examination before confirming duty and penalty.

The Tribunal faced a difference of opinion between its members regarding the necessity of cross-examination. While one member believed it was unnecessary, another member emphasized the importance of cross-examining witnesses for upholding principles of natural justice. The third member concurred with the latter's view, stating that the Revenue's case relied heavily on witness statements without corroborative evidence. The majority opinion was that duty confirmation and penalty imposition required cross-examination of key witnesses for a fair adjudication process.

The Tribunal held that the respondents were justified in seeking cross-examination during the adjudication proceedings. The judgment referenced a Supreme Court case emphasizing the importance of cross-examination to test the veracity of depositions and assess probative value. The adjudicating authority's reasons for denying cross-examination were deemed unacceptable, as the mere absence of threat or coercion during witness statements did not justify refusal of cross-examination.

Ultimately, the Tribunal found no error in its decision to allow cross-examination and dismissed the Tax Appeals. The judgment highlighted the importance of upholding principles of natural justice and providing opportunities for cross-examination to ensure a fair adjudicatory process.