Violation of principles of natural justice - opportunity for ...

Taxman must allow cross-examination of witnesses whose statements were relied upon in excise duty case.

Case Laws     Service Tax

October 11, 2024

Violation of principles of natural justice - opportunity for cross-examination. Evidentiary value of statements recorded u/s 14 of the Central Excise Act, 1944 cannot be relied upon unless the procedure prescribed u/s 9D is followed. Section 9D(1)(b) provides conditions for admitting such statements as evidence. Courts have consistently held that if a statement is used against the appellant, the right to cross-examine the individual who made the statement is fundamental. If the person is available, they should be presented for cross-examination when requested. Failing to provide this opportunity would violate principles of natural justice. The Delhi High Court clarified that if the department relies on a previously recorded statement during an inquiry, the opposing party must be allowed to cross-examine that person to challenge the statement's veracity. In the instant case, the appellant did not seek cross-examination at the original adjudication stage, but requested it before the Tribunal. Cross-examination u/s 9D(1)(b) is a right that cannot be denied. The matter is remanded to the Commissioner (Appeals) to re-adjudicate, giving the appellant an opportunity to cross-examine all witnesses whose statements were relied upon.

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