Denial of cross-examination of witnesses is violative of principles of natural justice

[CA Bimal Jain]

The CESTAT, Ahmedabad in INDU OVERSEAS PVT. LIMITED, KD THAKKAR, KETAN H BHANUSHALI, PRAHALADRAI INDERMAL JHANDAR, ANAND PATEL AND NITIN D SINGALA VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, RAJKOT - 2023 (6) TMI 1154 - CESTAT AHMEDABAD  remanded the order passed by the Adjudicating Authority and held that denial of cross-examination of witnesses is violative of principles of natural justice.

Facts:

M/s Indu Overseas Pvt. Ltd. (“the Appellant”) is a 100% export-oriented unit (“EOU”) engaged in the manufacturing of brass parts and accessories and was subsequently undertaking export of manufactured brass parts and accessories, as well as selling them in the domestic tariff area as per the permission received from the authorities.

Based on an investigation by the officers of DRI a Show Cause Notice dated January 17, 2012 (“the SCN”) was issued to the Appellant alleging that the Appellant had inflated the weight of the consignments in export documents to wrongly fulfil the export obligation, the SCN was subsequently confirmed by the Commissioner of Central Excise-Rajkot (Adjudicating Authority) vide order No 57-COMMR-2013 dated March 30, 2013 (“the Impugned Order”).

Aggrieved by the Impugned Order the Appellant filed the present appeal before the CESTAT.

The Appellant contended that the Adjudicating Authority behaved in an arbitrary manner and had not accepted the demand of cross-examination of the witnesses and subsequently confirmed the customs demand as well imposed penalty in gross violation of principles of natural justice.

Issue:

Whether denial of cross-examination of witnesses was violative of principles of natural justice?

Held:

The CESTAT Ahmedabad in INDU OVERSEAS PVT. LIMITED, KD THAKKAR, KETAN H BHANUSHALI, PRAHALADRAI INDERMAL JHANDAR, ANAND PATEL AND NITIN D SINGALA VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, RAJKOT - 2023 (6) TMI 1154 - CESTAT AHMEDABAD  held as under:

• Observed that, the Order in Original passed without providing opportunity of cross-examination of witness whose statement have been used as evidence and relied upon by the authorities.
• Relied on its own judgment in the case of PATIDAR PRODUCTS, MAHASHAKTI SALES AGENCY, TULSIDAS & CO, RADHESHYAM TRANSPORT CO, KIRITBHAI BACHUBHAI FINAVA, BINTU STORES, SHIVAM MARKETING, MILAN TRANSPORT AND ASHWINBHAI PRAGJIBHAI AMBALIYA VERSUS C.C.E. & S.T. -BHAVNAGAR - 2022 (10) TMI 874 - CESTAT AHMEDABAD wherein it held that denial of cross-examination and non-production of witnesses for cross-examination was violative of principles of natural justice.
• Held that, the adjudication order passed without allowing cross-examination is an act of gross violation of natural justice.

Set aside the SCN and the Impugned Order and remanded back the matter to the Adjudicating Authority for passing a fresh order after allowing the opportunity for cross-examination of the witnesses.

(Author can be reached at info@a2ztaxcorp.com)