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TMI Blog2016 (8) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... he manner in which it is to operate and, therefore, seeks to be provided the records of the examination-in-chief of the witnesses whose statements are referred to in the Show Cause Notice dated 16.02.2012 issued to the appellant, so that the appellant could, if necessary, seeks cross-examination of the said witnesses are no longer res-integra and stands decided by a number of authorities, most recently by Hon'ble Punjab and Haryana High High Court in Ambika International & others v UOI [2016 (6) TMI 919 - PUNJAB AND HARYANA HIGH COURT]. Therefore, in view of the above unequivocal expression of law as contained in a plethora of judicial authorities, the present appeal is allowed by setting aside the decision as communicated to the appellant by the impugned letter dated 03.06.2016, and the matter is remanded to the Principal Commissioner with a direction to adjudicate the Show Cause Notice strictly by complying with the mandate of Section 9D of the Act, in accordance with the directions contained in the judgment of Hon'ble High Court of Punjab & Haryana in Ambika International (supra). - Appeal disposed of - E/51876/2016 - SM - 52571/2016 - Dated:- 23-6-2016 - Mr. M.V. Ravindr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra, father of Shri Ashish Ajmera, owner of godown situated at plot No. 165/A, Sector F, Industrial Area, Indore. (xii) Shri B.K. Shukla, M/s Venkatesh Traders, Kanpur (xiii) Shri Rajat Gupta, Proprietor, M/s Babu Brothers, 51/104, Lal Phatak, Sakarpatti, Nayaganj, Kanpur (xiv) Shri Ajay Kumar Gupta, Proprietor, M/s Ajay Zarda, 78/268 Pan Dariba, Latouche Road, Kanpur (xv) Shri Mohanlal, Proprietor of M/s. Matheshwari Agency, AVM Complex, RG Street, Coimbatore (xvi) Shri Pawan Gupta, Proprietor, M/s Pawan Gupta, 51/104, Lal Pyatak, Sakarpatti, Nayaganj, Kanpur (xvii) Shri Chaganlal Dharmaram, Proprietor of M/s Ashapuri Marketing, 330/A, RG Street, Coimbatore (xviii) Shri P Abdul Latheef, Proprietor of M/s Harshin Enterprises, 9/419-K, Poonthala Building, Pan Bazar, Mavumkunnu Road, Tirur (xix) Shri Mangal Ram Rajm Purohit, proprietor of M/s Sri Samunda Trading Co 907, R G Street, Coimbatore and owner of M/s Samundra Trading Co 916/5, Richwell Complex, R G Street, Coimbatore (xx) Shri Satish Chandra Gupta, proprietor of M/s Prem Agency, (xxi) Shri Rajat Gupta, proprietor of M/s Babu Brothers, (xxii) Shri Anil Khurana, proprietor of M/s Khurana Broth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d subject, the appropriate authority has observed that Shri Shiv Narayan Kushwha, Shri Goyal Agarwal and Shri Ashish Ajmera are also the co-noticees, and hence this authority cannot direct them to be present for cross examination which may cause them to incriminate themself and therefore, the request for their cross-examination is not granted. In this regard, reliance is placed on the following case law: (i) In the case of A K Jayasankaran Nambir, J N S Mahesh Versus Commissioner of Customs, Cochin [2016 (331) ELT 402 (Ker.)] where the Tribunal observed further as Shri Reji Cherian is a co-noticee, this authority cannot direct him to be present for proceedings that may cause him to incriminate himself and therefore the request for cross-examination of Sri Reji Cherian cannot be acceded to The aforesaid request of cross examination of Noticee No.3 and 4 is hereby disposed off. This issue with the approval of the appropriate authority. 5. The present appeal is directed against the said letter 03.06.2016, issued to the appellant by the Superintendent (Adjudication) purporting to communicate, to the appellant, the decision of the Commissioner, reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cigarettes v CCE, 2009 (242) ELT 189 (Del), which reads as under: 32 .Thus, we summarize our conclusions as under :- (v) it is always open to the affected party to challenge the invocation of provisions of Section 9D of the Act in a particular case by filing statutory appeal, which provides for judicial review. 8.1 This Tribunal has also, in Swiber Offshore Construction Pvt Ltd v CC, 2014 (301) ELT 119 (T), entertained an appeal against the decision rejecting the prayer of the appellant in that case for permission to cross examine witness as an when the revenue was seeking to place reliance. Para 12 of the judgement of this Tribunal in the said case reads as under: 12. The appeals are therefore allowed with direction to the Respondent adjudicating authority to follow Section 138B and to forthwith summon the witnesses for examination under intimation to the appellant, and to offer them for cross-examination by the appellant if their statements are to be considered as relevant and admitted in evidence in the interest of justice. The appellant is also entitled for cross examination of the Chief Chemist (EC), DGH. The appellant shall also extend its full co- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 03.06.2016 is completely silent on the actual request of the appellant as contained in its letter dated 24.05.2016. The appellant in support of their contention has handed over a compilation of judgments on the issue of examination in chief and cross examination. My attention was specifically drawn to the recent judgement dated 17.06.2016 of the Hon ble Punjab and Harayana High High Court in Ambika International others v UOI, on the issue of examination in chief and cross-examination as per Section 9D of the Act. The learned DR on the other side supported the decision taken by the adjudicating authority. 9. I have carefully considered the submissions made by both the parties. 9.1 A comparison of the request made by the appellant, in the said letter dated 24.05.2016, with the response of the Commissioner as communicated vide the impugned communication dated 03.06.2016, does indeed reveal that the appellant is right in its contention that the impugned letter dated 24.05.2016 does not answer, in terms, the appellants request as contained in the letter dated 05.04.2016, but purports to reject indeed, the request of cross examination of S/Shri Narayan Kushwha, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d officer of Central Excise (under Section 14 of the Act) can be treated as relevant for the purposes of proving the truth of the contents thereof and is pari materia with Section 138B of the Customs Act, 1962. Sub-Section (1) of Section 9D states that a statement, recorded before a gazetted officer of Central Excise, can be treated as relevant for the purposes of proving the truth of the contents thereof, if the case falls either under clause (a) or clause (b) thereof. Sub-Section (2) of the said Section makes the provision of sub-Section (1) applicable to adjudicatory proceedings under the Act as well, as also held by the Hon ble Delhi High Court in para 12 of its judgment in J K Cigarettes (supra), in the following words: Sub-section (2) extends the provision of sub-section (1) to any proceedings under the Act other than a proceeding before the Court. In this manner, Section 9D can be utilized in adjudication proceedings before the Collector as well. Clause (a) of sub-section (1) of Section 9D deals with a case in which (i) the person who made the statement is dead (ii) the person who made the statement cannot be found, (iii) the person who made t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied upon by the appellant, which delineated the contours of Section 9D of the Act, as under: (i) In Sukhwant Singh V State of Punjab (1995) 3 SCC 367, referring to Section 138 of the Evidence Act, 1872, clearly held as under: Section 138. Evidence Act envisages that a witness would first be examined in-chief and then subjected to cross-examination and for seeking any clarification, the witness may be re-examined by the prosecution. There is no meaning in tendering a witness for cross-examination only. Tendering of a witness for cross examination, as a matter of fact, amounts to giving up of the witness by the prosecution as it does not choose to examine him in chief . 9.8 The same principle is to be found in para 9 of the judgment of the Hon ble High Court of Karnataka in Sharadamma v Kenchamma, MANU/KA/8690/2006 (equivalent-2006 (4) KCCR 2221) which holds as under: Even with regard to the prayer for permitting the applicant to cross-examine the plaintiff, the prayer is misconceived as the question of cross-examination arises only when a witness has tendered evidence in chief examination. Under Section 138 of the Indian Evidence Act, cross-examination follows c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that event, the persons whose statements are relied upon have to be made available for cross-examination for the evidence or statement to be considered. 9.10 That the principles of evidence are applicable to adjudicatory proceedings under the Act, has also been settled by the judgement of the Hon ble Supreme Court in CC v Bussa Overseas Properties Ltd, 2007 (216) ELT 659 (SC) by upholding the order of this Tribunal in Bussa Overseas Properties Ltd v CC, 2001 (137) ELT 637 (T). 9.11 That any official action has to be done in the manner prescribed, or not at all, is a well settled axiom of administrative law, which was first expostulated in Taylor v Taylor LR1 Ch.D 426, adopted by the Privy Coucil in Nazir Ahmed v King Emperor AIR 1936 PC 253 and thereafter followed by the Hon ble Supreme Court in a catena of authorities, including most recently, the judgment of the Hon ble Supreme Court in Mohinuddin Jamal Alvi v UOI JT 2016 (5) SC 214. 9.12 The above interpretation of Section 9D was also accepted by this Hon ble Tribunal in its recent orders in CCE v Kuber Tobacco Ltd v CCE [Final Order No:5038-50942/2016-CHD dated 4.03.15], paras 8 to 14 of which merit reproduction as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Collector holding that it was not possible to procure the attendance of some of the witnesses without undue delay or expense. Whether such a finding was otherwise justified or not can be taken up in the appeal. 9. In other words, in the absence of the circumstances specified in section 9D(1), the truth of the facts contained in any statement, recorded before a gazetted Central Excise officer, has to be proved by evidence other than the statement itself. The evidentiary value of the statement, in so far as proving the truth of the contents thereof is concerned, therefore, completely lost, unless and until the case falls within the parameters of section 9D(1). Therefore, two steps are required to be followed by the adjudicating authority, under clause (b) of section 9D(1) (t) the person who made the statement has to first be examined as a witness in the case before the adjudicating authority, and (ii) the adjudicating authority has, thereafter, to form the opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. The same view has been taken by hon'ble Allahabad High Court in the case of Parmar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been denied and the witnesses have not been examined despite specific reliance by the appellant on Section 138B without there being any objective formation of opinion based on any material on record to come to the conclusion that any specified circumstance mentioned in Section 138B(1)(a) exists. These circumstances mentioned in Section 138B(1)(a) are also contained in pan materia Section 9D(1)(a) and were recorded as follows in J.K. Cigarettes Ltd., 2009 (242) E.L.T. 189 (Del.) 25. Section 9D of the Act stipulates following five circumstances, already taken note of, under which statements previously recorded can be made relevant. These are:- (a) when the person who had given the statement is dead; (b) when he cannot be found; (c) when he is incapable of giving evidence; (d) when he is kept out of the way by the adverse party; and (e) when his presence cannot be obtained without an amount of delay or expense, which the Officer considers unreasonable. These circumstances show that if witness cannot be examined for any of these five reasons, the statement previously recorded would be relevant. The adjudicating authority was therefore bound to fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been observed as under:- 8. It will be pertinent at this stage to refer to section 138 of the Evidence Act which provides: 138. Order of examinations. - Witnesses shall be first examined-in-chief then (if the adverse party so desires) cross- examined, then (if the party calling him so desires) re-examined. The examination and cross-examination must relate to relevant facts but the cross-examination need not be confined to the facts to which the witness testified on his examination-in-chief. Direction for re-examination. - The re-examination shall be directed to the explanation of matters referred to in cross-examination; and if new matter is, by permission of the Court, introduced in re-examination, the adverse party may further cross-examine upon that matter. 9. It would, thus be seen that Section 138 (supra) envisages that a witness would first be examined-in-chief and then subjected to cross-examination and for seeking any clarification, the witness may be re-examined by prosecution. There is, in our opinion, no meaning in tendering a witness for cross-examination only. Tendering of a witness for cross-examination, as a matter of fact, amounts to givin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9D is required to be scrupulously followed, as much in adjudication proceedings as in criminal proceedings relating to prosecution. 17. As already noticed herein above, sub-section (1) of Section 9D sets out the circumstances in which a statement, made and signed before a gazetted Central Excise Officer, shall be relevant for the purpose of proving the truth of the facts contained therein. If these circumstances are absent, the statement, which has been made during inquiry/investigation, before a gazetted Central Excise Officer, cannot be treated as relevant for the purpose of proving the facts contained therein. In other words, in the absence of the circumstances specified in Section 9D(1), the truth of the facts contained in any statement, recorded before a gazetted Central Excise Officer, has to be proved by evidence other than the statement itself. The evidentiary value of the statement, insofar as proving the truth of the contents thereof is concerned, is, therefore, completely lost, unless and until the case falls within the parameters of Section 9D(1). 18. The consequence would be that, in the absence of the circumstances specified in Section 9D(1), if the adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating authority, under clause (b) of Section 9D (1), viz. i) the person who made the statement has to first be examined as a witness in the case before the adjudicating authority, and ii) the adjudicating authority has, thereafter, to form the opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. 23. There is no justification for jettisoning this procedure, statutorily prescribed by plenary parliamentary legislation for admitting, into evidence, a statement recorded before the gazetted Central Excise officer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word shall in Section 9D (1), makes it clear that, the provisions contemplated in the sub-Section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. 24. The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the gazetted Central Excise officer, has every chance of having been recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, for cross-examination, can arise. 28. Clearly, if this procedure, which is statutorily prescribed by plenary Parliamentary legislation, is not followed, it has to be regarded, that the Revenue has given up the said witnesses, so that the reliance by the CCE, on the said statements, has to be regarded as misguided, and the said statements have to be eschewed from consideration, as they would not be relevant for proving the truth of the contents thereof. 29. Reliance may also usefully be placed on para 16 of the judgment of the Allahabad High Court in C.C.E. V Parmarth Iron Pvt Ltd, 2010 (250) ELT 514 (All), which, too, unequivocally expound the law thus: If the Revenue choose (sic chose?) not to examine any witnesses in adjudication, their statements cannot be considered as evidence. 30. That adjudicating authorities are bound by the general principles of evidence, stands affirmed in the judgement of the Supreme Court in C.C. V Bussa Overseas Properties Ltd, 2007(216) ELT 659 (SC), which upheld the decision of the Tribunal in Bussa Overseas Properties Ltd v C.C., 2001 (137) ELT 637 (T). 31. It is clear, from a reading of the Orders-in-original dated 19.05.2016 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , would have to be eschewed from evidence, and it would not be permissible for Respondent No 2 to rely on the said evidence while adjudicating the matter. Neither, needless to say, would be open to the Revenue to rely on the said statements to support the case sought to be made out in the Show Cause Notice. (iv) Once examination-in-chief, of the makers of the statements, on whom the Revenue seeks to rely in adjudication proceedings, takes place, and a copy thereof is made available to the assessee, it would be open to the assessee to seek permission to cross-examine the persons who have made the said statements, should it choose to do so. In case any such request is made by the assessee, it would be incumbent on the adjudicating authority, i.e. on Respondent No2 to allow the said request, as it is trite and well-settled position in law that statements recorded behind the back of an assessee cannot be relied upon, in adjudication proceedings, without allowing the assessee an opportunity to test the said evidence by cross-examining the makers of the said statements. If at all authority is required for this proposition, reference may be made to the decisions of the Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dless to say, would be open to the Revenue to rely on the said statements to support the case sought to be made out in the Show Cause Notice. (iv) Once examination-in-chief, of the makers of the statements, on whom the Revenue seeks to rely in adjudication proceedings, takes place, and a copy thereof is made available to the assessee, it would be open to the assessee to seek permission to cross-examine the persons who have made the said statements, should it choose to do so. In case any such request is made by the assessee, it would be incumbent on the adjudicating authority, i.e. on Respondent No2 to allow the said request, as it is trite and well-settled position in law that statements recorded behind the back of an assessee cannot be relied upon, in adjudication proceedings, without allowing the assessee an opportunity to test the said evidence by cross-examining the makers of the said statements. If at all authority is required for this proposition, reference may be made to the decisions of the Hon'ble Supreme Court in Arya AbhushanBhandar v U.O.I., 2002(143)ELT 25 (SC), Swadeshi Polytex v Collector, 2000 (122) ELT 641 (SC). 9.16 A reading of the last para of the jud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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