2015 (9) TMI 571 - HC - Central Excise

Duty demand - Violation of principle of natural justice - Denial of Opportunity of cross examination of officer who have allegedly conducted surveillance of the petitioner factory - Held that - It is not the case of the revenue that Sohanraj Mehta who made the statements in the enquiry is examined as a witness in the case before the Court and that the court was of the opinion that having regard to the circumstances of the case his submission should be admitted in evidence, in the interest of justice - it is too farfetched for the revenue to contend that the statements made by Sohanraj Mehta in the course of the investigation would tantamounts to statements made in a court. Be that as it may, if Sohanraj Mehta is examined as a witness for the revenue, it is needless to state that the said witness should be tendered for cross examination by the petitioner. - Merely because Sohanraj Mehta allegedly implicated the petitioner by making a statement in writing does not necessarily mean that proof of implication of the petitioner, in the transaction. It is for the revenue to establish such implication if at any time Sohanraj Mehta is examined as a witness for the revenue to prove the implication of the petitioner, it is needless to state that he ought to be tendered for cross examination by the petitioner. - there is no justification, in law, for the petitioner to seek a direction to the revenue to tender/or cross examination the persons who have not been examined in the case. - Decided against assessee.

Summary

Issues: Denial of right to cross-examine Manoj Mitulal, Sohanraj Mehta, Srinivasan, and officers conducting surveillance.

In this case, the petitioner contested the denial of the right to cross-examine individuals crucial to the investigation under the Central Excise Act, 1944. The petitioner argued that Manoj Mitulal, who was raided by investigating authorities, should have been cross-examined due to the significance of loose sheets found at his house. However, since Manoj Mitulal did not make a statement or act as a witness for the revenue, the court rejected the contention. The petitioner also sought to cross-examine Sohanraj Mehta, who had written a letter implicating the petitioner. The revenue relied on this statement, but the court emphasized that unless Sohanraj Mehta was examined as a witness, his statements during an inquiry could not be considered as evidence. The court clarified that the term "court" in the statutory provision referred to a court where a witness is examined, not to statements recorded during an inquiry. Therefore, the revenue's argument that Sohanraj Mehta's statements during the investigation should be admitted as evidence was deemed invalid.

Furthermore, the court highlighted that merely because Sohanraj Mehta did not retract his letter implicating the petitioner does not automatically render his statements as undeniable truth. The burden of proof lies with the revenue to establish the implication of the petitioner. The court emphasized that if Sohanraj Mehta were to be examined as a witness for the revenue, he should be made available for cross-examination by the petitioner. Additionally, the petitioner aimed to cross-examine Srinivasan, the Accountant of Champion Packaging. The court noted that if there were no legal restrictions, the petitioner could apply for summons to examine Srinivasan as a witness.

Moreover, regarding the officers who allegedly conducted surveillance at the petitioner's factory premises, the court ruled that it was the petitioner's responsibility to prove this surveillance by examining the officers. Therefore, the demand for cross-examination of these officers did not hold ground. The correspondence from the revenue stated that no statements were recorded from the individuals requested for cross-examination by the petitioner, and they were not listed as witnesses in the case. Consequently, the court found no legal justification for the petitioner to demand the cross-examination of individuals not examined in the case. Ultimately, the court dismissed the petition as lacking merit, subject to the aforementioned observations.