TMI Blog2021 (12) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... e statements have been recorded and are referred to in the show-cause notice, even prior to a reply thereto being submitted. Once the show-cause notice is issued, it is for the petitioner to deny and dispute the allegations levelled therein and if he so chooses to raise such defence as he may be advised. Omission and/or failure to reply to a show-cause notice may not, in all cases, amount to an admission of the allegations. In the present case, such question of admission does not arise because the petitioner in his reply dated 23rd October, 2020 has clearly denied and disputed the allegations levelled against him. The only question is at what stage would he be entitled to cross-examine the witnesses. The petitioner is granted liberty to file a final reply to the show-cause-cum-demand notice dated 24th September, 2020 within a fortnight from date - Petition disposed off. - WRIT PETITION NO. 5753 OF 2021 - - - Dated:- 3-12-2021 - DIPANKAR DATTA, CJ M. S. KARNIK, J. Mr. Arshad Hidayatullah, Senior Advocate a/w Mr. Makarand Joshi, Mr. Rakesh Sawant, Shamiyana Hussain i/by MAX Legal for petitioner. Mr. Jitendra B. Mishra a/w Dhananjay B. Deshmukh for respondents. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber, 2020 until the Respondent No. 2 complies with mandatory statutory procedure prescribed under Section 9D of the Act. 5. We have heard Mr. Hidayatullah, learned senior advocate appearing for the petitioner and Mr. Mishra, learned advocate for the respondents. 6. We record that several decisions of the Punjab and Haryana High Court have been relied on by Mr. Hidayatullah, whereas Mr. Mishra has relied on two decisions of the Allahabad High Court. 7. In Commissioner of Central Excise, Meerut-I vs. Parmarth Iron Pvt. Ltd., reported in 2010 (260) E.L.T. 514 (All.), it has been laid down as follows: - 15. The question, however, before us is, does the respondent have a right to call upon the appellants to make available the witnesses for cross-examination even before they being examined or their statements relied upon by the Department in proceedings in adjudication. None of the judgments cited, above were on the issue of making available the witnesses for cross-examination in order to reply to a show cause notice. Those judgments as already explained were in the course of adjudicating proceedings. Is, therefore, an assessee entitled to cross examine the witne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e liable to be examined at that stage. If the Revenue choose not to examine any witnesses in adjudication, their statements cannot be considered as evidence. However, if the Revenue choose to rely on the statements, then in 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. 17. We are, therefore, clearly of the opinion that there is no right, procedurally or substantively or in compliance with natural justice and fair play, to make available the witnesses whose statements were recorded, for cross-examination before the reply to the show cause notice is filed and before adjudication commences. The exercise of cross-examination commences only after the proceedings for adjudication have commenced. (emphasis supplied) 8. The Allahabad High Court while deciding Kanpur Cigarettes Ltd. vs. Union of India, reported in 2016 (344) E.L.T. 82 (All.), heavily relied on the afore-quoted observations from the earlier decision and held that the insistence of the petitioner (Kanpur Cigarettes Ltd.) that it be permitted to cross-examine the witnesses and thereafter it would submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the question of offering the witness to the assessee, for cross-examination, can arise. **** 24. In view of the above facts and circumstances, the impugned Order-in-Original dated 4-4-2016 passed by respondent No.2 stands set aside. Resultantly, the show cause notice issued to the petitioner is remanded to respondent No.2 for adjudication de novo by following the procedure contemplated by Section 9D of the Act and the law laid down by various judicial Authorities in this regard including the principles of natural justice in the following manner: - (i) In the event that the Revenue intends to rely on any of the statements, recorded under Section 14 of the Act and referred to in the show cause notices issued to Ambika and Jay Ambey, it would be incumbent on the Revenue to apply to Respondent No.2 to summon the makers of the said statements, so that the Revenue would examine them in chief before the adjudicating authority, i.e., before Respondent No.2. (ii) A copy of the said record of examination-in-chief, by the Revenue, of the makers of any of the statements on which the Revenue chooses to rely, would have to be made available to the assessee, i.e.,to Ambika ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the circumstances of the case, the Court considers unreasonable; or (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 provision 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. 12. The portion of section 9D underlined above for emphasis are important. A stage prior to issuance of show-cause notice cannot be regarded as an inquiry or proceeding as contemplated in the Act. As per sub-section (1) of section 14 of the Act, power to summon witnesses in any inquiry for purposes specified therein has been conferred on an officer duly empowered by the Central Government and in terms of subsection (3) thereof, any such inquiry shall be deemed to be a judicial proceeding within the meaning of section 193 and 228 of the Indian Penal Code. Prior to the issuance of a show-cause notice, neither any inquiry nor a proceeding can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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