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TMI Blog2010 (4) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant. Shri C. Appayya Sarma, SC, for the Respondent. [Order]. - These batch of appeals were directed against the common judgment passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Bangalore (henceforth called 'Tribunal') on 8-3-2005 [2005 (184) E.L.T. 263 (Tribunal)]. We prefer to narrate the facts as were set out in Excise Appeal No. 30 of 2005, which was preferred by the company. The appellant manufactures Man Made Fabrics (for short 'MMF'). It also undertakes processing of grey fabrics for conversion into MMF on job work basis, apart from purchasing grey fabric and processing it and converting into MMF. These goods manufactured by the appellant fall under Heading 5406.00 of the Schedule to the Central Excise and Tariff Act, 1985. The appellant was clearing the goods at its factory gate situated at Shapur village in Shamshabad Mandal, Ranga Reddy District, Andhra Pradesh. 2. On 15-5-1997, the officials of the Commissionerate of Customs and Central Excise, Hyderabad have undertaken search operations at the factory premises, the registered office, godowns, the residence of the Managing Director of the company as well as other bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Rule 209A of Central Excise Rules, 1944, Sri Gopal Gupta, Managing Director has been imposed penalty of Rs. 5 lakhs, while the proprietors of the firms who were said to be the dealers of the appellant were all imposed penalties of Rs. one lakh each. That order was challenged before the Appellate Tribunal. It was importantly contended that the duty has been demanded essentially based on the contents of the statement made by Sri Gopal Gupta, the Managing Director of the appellant without any corroborative material/evidence gathered. It was also contended that the statement of Sri Gopal Gupta has been obtained in an absolutely surcharged atmosphere and under pain of humiliation and duress. It was sought to be projected that Sri Ashok Kumar Agarwal, Director of the appellant company has been so shabbily dealt with that he has been virtually paraded naked and hence Sri Gopal Gupta, came under tremendous pressure to give suitable statement as desired by the inspecting officials. It was further pleaded that statements of Sri Bhavani Kishore, the Accountant of the appellant has been obtained after subjecting him to tactics of intimidation and that when the appellant sought to cross-ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Sri S.R. Ashok, while reiterating the various contentions noticed supra, submits that when an allegation of duty evasion has been thrown against the appellant, the burden lies on the department to bring home the said charge and without there being proper corroborative evidence, conclusions cannot be drawn solely based upon statements said to have been made by the Managing Director or the Accountant of the appellant company. It was further contended that the statement of Sri Gopal Gupta which is full of contradictions is sought to be relied upon without properly and carefully assessing the effect of such contradictions. Further, the statement obtained under extreme duress cannot form the basis for an acute penal action as was done by the respondents. It was also contended that when a statement has been retracted, it is fundamental that the person who made the original statement must necessarily be exposed to cross-examination. Only when such an opportunity is provided, it would be a fair and reasonable one. Any failure to make available the authors of such statements for cross-examination amounts to denial of fair and reasonable opportunity to establish the case of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : "….It need hardly be said that no conclusion can be reached by the Commercial Tax Officer without giving adequate opportunity to the assessee to contradict or rebut the information gathered by the department and without also giving an opportunity to show that the statements of persons if any recorded behind the back of the assessee did not contain truth and should, therefore, be disbelieved. The Commercial Tax Officer failed to do this elementary enquiry. After looking into the evidence placed before him the Commercial Tax Officer rushed to the conclusion that in terms of section 7A of the Act the assessee did not prove that the tax was paid at the first point of sales and, therefore, the sales effected must be deemed to be the first sales…… ……The least that the Commercial Tax Officer should have done in this case was to confront the assessee with the statements recorded from the persons on whom reliance was placed, tender those persons for the cross-examination of the assessee and based on such evidence arrive at a proper conclusion." 7. Per contra, Sri Appayya Sarma, learned counsel would submit that the findings of fact recorded by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential processual propriety being conditioned by facts and circumstances of each situation, no breach of natural justice can be complained of. The conscience of the matter is that, no man shall be hit below the belt. The concept has undergone a great deal of change in recent years, and the dividing line between an administrative and quasi-judicial function has become totally blurred, if not obliterated. 10. In Hira Nath Mishra v. Principal, Rajendra Medical College, (1973) 1 SCC 805 : AIR 1973 (S.C.) 1260, the appellants male students entered quite naked into the compound of the girls' hostel late at night. Thirty-six girl students filed a confidential complaint. A Committee constituted for the said purpose recorded the statements of girl students but not in the presence of the appellants. The photographs of the appellants were mixed up with 20 photographs of other students and the girls 'by and large' identified the appellants. The appellants were then called upon by the Committee and they were told about the charges against them. The appellants denied the charges and stated that they had never left their hostel. The Committee found the appellants guilty and finally they wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsent: they are not absolute and rigid rules having universal application. It was pointed out by this Court in Suresh Koshy George v. The University of Kerala (1969) 1 SCR 317 : (AIR 1969 SC 198) that "the rules of natural justice are not embodied rules" and in the same case this Court approved the following observations from the judgment of Tuker, L. J. in Russell v. Duke of Norfolk, (1949) 1 All ER 109 : "there are, in my view, no words which are of universal application to every kind of inquiry and every kind of domestic tribunal. The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter that is being dealt with, and so forth. Accordingly, I do not derive much assistance from the definitions of natural justice which have been from time to time used, but, whatever standard is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his case." (3) One of the rules which constitutes a part of the principles of natural justice is the rule of audi alteram partem which requires that no man should be condemned unheard. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am v. Commissioner of Income Tax, AIR 1980 SC 2117, the short question which arose for determination is whether there was any material evidence to justify the finding that a sum of Rs. 1,07,350.00 was remitted by the assessee from Madras to Bombay and that it represented the undisclosed income of the assessee. The original assessment of the assessee was completed long back, but it seems that some information was received by the Income Tax Officer that a sum of Rs. 1,07,350.00 was remitted by the assessee from Madras by two telegraphic transfers through the Punjab National Bank Limited. It was pointed out on behalf of the assessee at the hearing of the appeal that Nathirmal who was supposed to have received the amount of Rs. 1,07,350.00 sent by telegraphic transfer from Madras and to have signed the voucher in regard to the receipt of this amount as 'n. B. Bani' had left the service of the assessee long back and a grievance was made that it was not known as to who was the person who was supposed to have made the remittance on behalf of the assessee, because in the absence of this information, it was not possible for the assessee to meet the case of the Revenue. The Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vior convincingly in any other way, are we logically entitled to conclude that he did indeed do it. (31) WADE 'on Administrative Law', 5th Edition at pages 472-475 has observed that it is not possible to lay down rigid rules as to when the principles of natural Justice are to apply : nor as to their scope and extent. Everything depends on the subject-matter, the application of principles of natural justice, resting as it does upon statutory implication, must always be in conformity with the scheme of the Act and with the subject-matter of the case. In the application of the concept of fair play there must be real flexibility. There must also have been some real prejudice to the complainant; there is no such thing as a merely technical infringement of natural justice. The requirements of natural justice must depend on the facts and the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter to be dealt with, and so forth. (32) THE basic concept is fair play in action administrative, judicial or quasi judicial. The concept of 'fair play in action' must depend upon the particular lis, if there be any, between t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be concluded that a particular modus operandi is adopted, by way of shifting the decimal point in the invoices, for securing the clearance of manufactured goods without subjecting them entirely to payment of duty. On both these aspects, according to the learned Senior Counsel Sri S.R. Ashok, Sri Gopal Gupta has retracted from his earlier statement. In such a situation, it becomes inevitable that Sri Gopal Gupta should be made available for cross-examination and the statement made by such an individual during the course of cross-examination has got to be assessed with reference to the contents of the statement made by him originally. Without this exercise being carried out, merely because there were also some other material that has been gathered by the investigating agency which lent support to the statements made by Sri Gopal Gupta, the enquiry ought not to have been concluded. Therefore, we have no hesitation to hold that not making available Sri Gopal Gupta for cross-examination amounts to denying a fair and reasonable opportunity to the appellant to defend itself against the allegation of duty evasion. 16. But, at the same time, there is merit in the contention canvass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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