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TMI Blog2025 (1) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 9D of the Excise Act has no application. The judgment of Jharkhand High Court in Bihar Foundry Casting Ltd s [ 2022 (3) TMI 694 - JHARKHAND HIGH COURT] makes it clear that the statement recorded by the Gazetted Central Excise Officer during enquiry or investigation is in a quasi criminal proceeding. In this view of the matter, the word prosecution needs to be understood. The proceeding may lead into imposition of penalty. In some cases, it may also result into prosecution . The view taken by Division Bench of Jharkhand High Court in Bihar Foundry Casting Ltd. Thus, it is unable to persuade ourselves with the line of argument of revenue that because of use of the word prosecution in Section 9D of the Excise Act, the requirement of producing evidence in adjudication proceeding can be done away with. It is clear like noon day that the incriminating material/statements recorded behind the back of the petitioner cannot be used against him, unless, such witnesses are produced in adjudication proceedings and they were permitted to be cross-examined by the petitioner. Conclusion - In the teeth of Section 9D (1) (b) of the Excise Act, unless, the incriminating material and witnesses ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Dharmendra Kumar Goel, who are brothers were Managing Partners running sister concerns M/s. Geetha Synthetics and M/s. Shakthi Traders respectively. 4. Sri Rama Krishna Reddy, learned counsel for the revenue submitted that the modus operandi of respondent is clear from the statements of Sri Ramakrishna Rao, Manager of respondent and Sri Srinivasa Rao, Accountant-in-charge of M/s. Geetha Synthetics and Sri Babulal, Accountant of M/s. Shakthi Traders that they receive the goods only from respondent without central excise invoices and turnover with and without the cover of invoices was 50:50 % on their average monthly turnover of Rs. 10,00,000/- that the goods received with proper bills were sold under printed cash/credit bills and such sales were properly accounted for in records and goods received without central excise documents were sold without using printed bill books and used for the bill books. For these sales, note pad books having folios in triplicate with printed serial numbers were used. He further explained that on preparing three folios note pad book at the time of sales of unaccounted goods, the originals were handed over to the party and remaining two will be retaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent case if modus operandi of both the cases are examined in juxtaposition. Secondly, reliance is placed on the judgment of Collector of Customs, Madras v. D. Bhoormall (1974) 2 SCC 544 , to bolster the submissions that burden in a case of this nature to show innocence was on the respondent. The reliance is lastly placed on the judgment of Supreme Court in the case of Surjeet Singh Chhabra vs. Union of India (1997) 1 SCC 508 , to submit that in a case where there exists a clear confession the production of witness and cross-examination was not necessary. 9. In addition, Sri Rama Krishna Reddy, learned counsel for the appellant submits that Sri Babulal is a crucial witness. Although, he was not produced as witness before adjudicating authority and was not subjected to cross-examination, the relevant document of his deposition from the file was sent to Government Examiner for questioned documents. The said authority opined that the signature on the document in question is indeed of Babulal. Thus, if Babulal was not produced for cross-examination, it will make no difference or cause prejudice to the other side. Stand of Respondent: 10. Sri B. Chandrasen Reddy, learned Senior Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the respondent placed reliance on the statement of N.K. Prasada, Assistant Commissioner of Central Excise. The adjudicating authority in paragraph No. 65 recorded that during cross-examination, Sri N.K. Prasada, in response to the specific question stated that document GS/55/70, did not carry the signatures of panch witnesses, did not indicate the period for which it is related and did not indicate whether the particulars mentioned therein represented Rupees or linear meters. It was not possible on seeing the said document to conclude that it was prepared by Babulal. 14. In this view of the matter, even otherwise, the statement of Babulal is not trustworthy and cannot form basis of the impugned action and order. 15. The parties confined their arguments to the extent indicated above. We have bestowed our anxious consideration on rival contentions of the parties and perused the record. FINDINGS:- 16. Before dealing with rival contentions, it is apposite to reproduce Section 9D of the Excise Act, which reads as under: 9D. Relevancy of statements under certain circumstances.-- (1) A statement made and signed by a person before any Central Excise Officer of a gazetted rank during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance by the Commissioner of Central Excise, 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. 21. That adjudicating authorities are bound by the general principles of evidence, stands affirmed in the judgment of the Supreme Court in Commissioner of Customs v. Bussa Overseas Properties Ltd., (2007) 216 ELT 659 (SC), which upheld the decision of the Tribunal in Bussa Overseas Properties Ltd. v. Commissioner of Customs 2001 (137) ELT 637 (Trib._Mum)). 22. It is clear, from a reading of the Order-in-original dated 04.04.2016 supra, that Respondents No. 2 has, in the said Orders-in-Original, placed extensive reliance on the statements, recorded during investigation under Section 14 of the Act. He has not invoked clause (a) of sub-section (1) of Section 9D of the Act, by holding that attendance of the makers of the said statements could not be obtained for any of the reasons contemplated by the said clause. That being so, it was not open to Respondent No. 2 to rely on the said statements, without following the mandatory procedure contempla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 to 28]. Para 23, 24, 25 and 27 thereof. (Emphasis Supplied) 20. The Chhattisgarh High Court in High Tech Abrasives Ltd., v. Commissioner of C.Ex. Cus., Raipur (2018) 362 ELT 961 (Chhattisgarh) held as under: A rational, logical and fair interpretation of procedure clearly spells out that before the statement is treated relevant and admissible under the law, the person is not only required to be present in the proceedings before the adjudicating authority but the adjudicating authority is obliged under the law to examine him and form an opinion that having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. Therefore, we would say that even mere recording of statement is not enough but it has to be fully conscious application of mind by the adjudicating authority that the statement is required to be admitted in the interest of justice. The rigor of this provision, therefore, could not be done away with by the adjudicating authority, if at all, it was inclined to take into consideration the statement recorded earlier during investigation by the Investigation officers. Indeed, without examination of the person as requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the court considers unreasonable; or 1. Subs. by Act 36 of 1973, s. 8, for under clause (i) of section 135 (w.e.f. 1-9-1973). 2. Ins. by s. 9, ibid. (w.e.f. 1-9-1973). 106 (b) when the person who made the statement is examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a court, as they apply in relation to a proceeding before a court.] 24. After considering this provision, the findings are recorded in para No. 44, which reads thus: ..material witnesses not produced for cross-examination, through asked for, amounts to a clear breach of natural justice. In Union of India v. TR Varma {(1958) 1 SCR 499} the Court held: it may be observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the appellant is of no assistance for twin reasons:- i) in the said judgment, there is no discussion or analysis in the light of Section 9D of the Excise Act. ii) para No. 25 of the said judgment shows that the Managing Director voluntarily came forward to sort out the issue and paid excise duty to the tune of Rs. 11.00 lakhs on different dates. The said act of Managing Director was treated to be of confessional act/statement . There is no similar situation present in the instant matter. The facts of case cannot be a binding precedent. What is binding precedent is the ratio decidendi of a matter ( see Ram Prasad Sarma v. Mani Kumar Subba {2003 (1) SCC 289}, Rekha Mukherjee v. Ashis Kumar Das {2005 (3) SCC 427}, Jayant Verma v. Union of India {2018 (4) SCC 743} and Shanti Bhushan v. Supreme Court of India {2018 (8) SCC 396}). A peculiar different fact or a different legal provision may make a world of difference. ( See Bhavanagar University v. Pallitana Sugar Mills Pvt Ltd {2003 (2) SCC 111}). As rightly highlighted by respondent the so called confession statement of Babulal does not inspire confidence. The adjudicating authority himself found the discrepancy, which was r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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