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2015 (12) TMI 1267 - GUJARAT HIGH COURT

2015 (12) TMI 1267 - GUJARAT HIGH COURT - 2016 (334) E.L.T. 302 (Guj.) - Claim of exemption - Washing natural clay - use / non use of acid - sale of the product under trade name "Bleach-9 - activated clay/activated earth - Maintainability of petition - Alternate remedy - breach of principles of natural justice - Opportunity of cross examination not granted - Conflicting chemical test reports of different chemical examiners - Held that:- directions relate to sending the matter for the opinion of .....

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mist, which opportunity has been denied by the adjudicating authority under the specious plea that the petitioner does not want to pay the excise duty. - The petitioner also requested for a personal hearing before taking any final decision in the matter. However, the adjudicating authority has proceeded to adjudicate the show-cause notice without affording any opportunity to cross-examine the Chief Chemist as well as without affording any further opportunity of hearing. Therefore, there is a cle .....

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stances, the Chief Chemist has not applied his mind to the matter in the light of the directions issued by the Commissioner (Appeals). The adjudicating authority, having regard to the directions issued by the Commissioner (Appeals) was required to furnish the operative part of the order passed by the Commissioner (Appeals) to the extent of the directions issued by him as well as the supporting documents, namely, the two reports of the different chemical examiners of the same laboratory as well a .....

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ef Chemist, the report does not appear to have been prepared keeping the said parameters in mind.

With a view to bring finality to the proceedings, the matter is once again required to be referred to the adjudicating authority to ensure that the matter is once again referred to the Chief Chemist together with the directions issued by the Commissioner (Appeals) and the supporting documents as referred to hereinabove, for a fresh opinion on the question as to whether on the parameters .....

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is only after affording a reasonable opportunity of hearing to the petitioner that the final order may be passed by the adjudicating authority. - Decided in favour of assessee. - Special Civil Application No. 7302 of 2015 - Dated:- 23-10-2015 - Harsha Devani And A. G. Uraizee, JJ. For the Appellants : Mr Paresh M Dave, Adv For the Respondent : Mr RJ Oza, Adv JUDGMENT ( Per : Honourable Ms. Justice Harsha Devani ) 1. By this petition under Article 226 of the Constitution of India, the petitioners .....

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writ, direction or order, completely and permanently prohibiting the respondents, their servants and agents from taking any action against the Petitioner Company pursuant to OIO No.AHM-CEX-003-JC-18 to 32-14-15 dated 30.03.2015 passed by the Joint Commissioner of Central Excise, Ahmedabad-III. (C) That Your Lordships may be pleased to issue a Writ of Mandamus or any other appropriate writ, direction or order, directing the 2nd Respondent herein to strictly follow the directions issued by the Co .....

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selling the product under the trade name "Bleach-9" claiming exemption from payment of excise duty. On 7th November, 1998, the Central Excise officers visited the petitioner's factory, drew a panchnama and commenced inquiry in respect of the petitioner's manufacturing activities on the basis that washing of clay with acid resulted into "activated clay" which was chargeable to excise duty. With effect from November, 1998, due to the above inquiry, the petitioner compa .....

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ble to excise duty. By an order dated 21st May, 2002, the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as "the Appellate Tribunal") allowed the appeal preferred by the petitioner against the above adjudication order on the ground that the demands were barred by limitation but upheld the Department's case about activation of earth upon use of acid. During the period June, 2001 to May, 2003, in all, six adjudication orders were passed by the Assistant C .....

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report on the samples tested by him to the effect that there was no activation as a result of washing of clay with water by the petitioner company. Subsequently, a request was made by the Assistant Commissioner to another Chemical Examiner for a second opinion and the other Chemical Examiner, viz., Chemical Examiner Grade I gave a report dated 3rd September, 2004 to the effect that the product was activated earth. By an order dated 28th January, 2005 made in all the six appeals, the Commissioner .....

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ia observed thus:- "... ... ... I, therefore, observe that Department should examine if it would be appropriate to sent the both reports of the Chemical Examiner, Vadodara to Chief Chemist Central Revenue Control Laboratory, New Delhi for his opinion if on these parameters it could be said if it is activated earth and then if he desires afresh samples be provided to him and then decide the issue of demand/classification of "Bleach,9" for the entire period w.e.f. 15.4.99 (the date .....

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Chemist with chemical examiner report." 3. On 21st October, 2007, the petitioner company obtained a report and opinion from IIT, Bombay on parameters of raw clay used as the initial material and Bleach-9, according to which, Bleach-9 was not activated clay. Another report of Vaibhav Enviro Consultant, a GPCB recognised laboratory, was also obtained according to which also, Bleach-9 was not activated earth. These reports were submitted by the petitioner before the excise authorities who wer .....

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pre-deposit. The petitioner company, therefore, approached the Appellate Tribunal, Ahmedabad, which by an order dated 7th August, 2009 allowed the appeal at the time of hearing of the stay application itself and remanded the case with a direction to the original adjudicating authority to follow the directions of remand issued by the Commissioner (Appeals) in the previous round. In the remand proceedings, the Additional Commissioner by an order dated 8th December, 2011 once again took the same vi .....

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evidence or any new facts relating to the case. The petitioner, therefore, approached the Appellate Tribunal, which by an order dated 17th October, 2012 criticized the approach of the lower authorities in not following the directions given by the Commissioner (Appeals) in OIA dated 12th July, 2006 and allowed the appeal and stay application and directed the adjudicating authority to strictly follow the directions given by the first appellate authority vide OIA dated 12th July, 2006. 5. On 2nd Ma .....

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ls) in OIA dated 12th July, 2006 and emphasized that the directions of the Commissioner (Appeals) were not strictly followed even though the Appellate Tribunal had directed to do so. It was also stated that it was not clear from the letter of the Chief Chemist whether all the details like reports of IIT and Vaibhav Enviro Consultant, the petitioners' defence etc. were sent to the Chief Chemist, CRCL or not. On 19th March, 2015, a personal hearing was held before the Joint Commissioner at whi .....

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en the petitioners' advocate pointed out from this letter that the evidence led by the petitioners was apparently not sent to the Chief Chemist and an opinion of the Chief Chemist was not requested for on the precise issue whether the parameters of natural clay and Bleach-9 reported by both the Chemical Examiners indicated any activation of natural clay or not and also that cross-examination of the Chief Chemist, CRCL was also required for knowing various relevant facts from him about his re .....

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ng for cross-examination of the Chief Chemist, and for personal hearing before taking any final decision in the matter. By the impugned order dated 30th March, 2015, the Joint Commissioner straightaway passed an adjudication order confirming the demand of excise duty with interest and penalty without affording any opportunity to the petitioners to cross-examine the Chief Chemist or for personal hearing. Being aggrieved, the petitioners have filed the present petition seeking the reliefs noted he .....

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e Chief Chemist, Central Revenue Control Laboratory, New Delhi for his opinion if on those parameters it could be said if it is activated earth and then if he desires, fresh samples be provided to him and that the issue of demand/classification of "Bleach-9" for the entire period with effect from 15th April, 1999 be decided accordingly. It was pointed out that the Commissioner (Appeals) has specifically stated that if any adverse report of the Chief Chemist is received, the same should .....

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stage of the Tribunal and the Tribunal remanded the matter to the adjudicating authority for a fresh decision. It was submitted that even thereafter, the adjudicating authority did not properly comply with the directions issued by the Commissioner (Appeals) and the matter once again travelled up to the stage of the Tribunal which once again remanded the matter to the adjudicating authority to strictly follow the directions given by the first appellate authority in para 8 of the Order-in-Appeal .....

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t may be sent to the Chief Chemist, CRCL, New Delhi for his opinion and the report of the Chief Chemist may also be made available to him. It was pointed out that the Department referred the matter to the Chief Chemist, New Delhi by a letter dated 19th January, 2015 pursuant to which the Director (Revenue Laboratories) submitted a report vide letter dated 25th February, 2015. It was submitted that a copy of the report of CRCL, New Delhi was furnished to the petitioner under letter dated 2nd Marc .....

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ether the report of IIT, Mumbai and Vaibhav Enviro Consultant of Ahmedabad and the defence reply of the petitioners were sent to CRCL, New Delhi or not. It was pointed out that as recorded in the impugned order, personal hearing was held on 19th March, 2015 on which date, a copy of the letter dated 18th January, 2015 addressed to the Chief Chemist was furnished to the learned counsel and he was given time till 28th March, 2015 to submit his response to the letter. It was submitted that by a lett .....

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there was no activation on the basis of such parameters was correct. It was pointed out that after a report/opinion is received from the Chief Chemist, CRCL, the petitioner had requested for an opportunity to crossexamine him in case it is found that the opinion/report was still not proper and adequate. That the petitioner had also sought for an opportunity of personal hearing before taking any final decision in the matter. It was pointed out that despite the aforesaid position, the adjudicating .....

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e was made to the decision of this court in the case of Arunodaya Mills Ltd. And Another v. Union of India and Another, 1985 (21) E.L.T. 390 (Guj.), for the proposition that it is settled law that in case of report of an expert, request to cross-examine has to be given. Reliance was placed upon the decision of the Delhi High Court in the case of Lachhman Das, Tobacco Dealers v. Union of India, 1978 (2) E.L.T. (J 500) (Del.), wherein the court had held that denial of an opportunity to examine the .....

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ed that when the petitioners prayed for crossexamination and reasonably expected that the same would be granted, they cannot be expected to participate in the adjudication proceedings up to the final stage. In other words, without dealing with and disposing of the petitioners' application for cross-examination, the adjudicating authority could not have finally adjudicated the issues. 6.2 Reference was made to the decision of this court in the case of Milcent Appliance Pvt. Ltd. v. Union of I .....

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d by the adjudicating authorities, therefore, suffers from the vice of being violative of the principles of natural justice, inasmuch as, the petitioner has not been afforded an opportunity of cross-examining the Chief Chemist as well as has been denied the opportunity of a personal hearing prior to passing of the impugned order. It was submitted that, therefore, despite there being an alternative remedy available to the petitioner, the present writ petition against the order of the adjudicating .....

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be of universal application. The rule of exclusion of writ jurisdiction due to availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of the availability of an alternative remedy, a writ court may still exercise its discretionary jurisdiction of judicial review, in at least three contingencies, namely, (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of nat .....

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t in the case of Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and others, AIR 1999 SC 22, for the proposition that under Article 226 of the Constitution, the High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alte .....

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tion is maintainable before this court and that the impugned order passed by the adjudicating authority is required to be quashed and set aside and the matter is required to be remanded to the adjudicating authority for referring the matter to the Chief Chemist in terms of the directions issued by the Commissioner (Appeals) in the order dated 12th July, 2006 in letter and spirit and to thereafter render a fresh decision after affording a reasonable opportunity of hearing to the petitioner, inclu .....

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he Commissioner (Appeals), for this purpose, it is not necessary to approach this court and that such directions could also be obtained by filing an appeal before the Commissioner (Appeals). On the merits of the impugned order, the learned counsel referred to the directions issued by the Commissioner (Appeals) in the order dated 12th July, 2006, to submit that the same stand substantially complied with. The attention of the court was invited to the impugned order and more particularly, paragraph .....

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ces, there is no warrant for interference by this court. In support of his submissions, the learned counsel placed reliance upon the decision of the Supreme Court in the case of Commissioner of Income-Tax v. Chhabil Dass Agarwal, (2014) 1 SCC 603, for the proposition that it is settled law that non-entertainment of petitions under writ jurisdiction by the High Court when an efficacious remedy is available is a rule of self-imposed limitation. It is essentially a rule of policy, convenience and d .....

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rule of alternative remedy and that the present case does not fall within any of the excepted categories. Reliance was also placed upon the decision of the Supreme Court in the case of M/s. Kanungo and Co., v. The Collector of Customs, Calcutta and others, AIR 1972 SC 2136, wherein the complaint of the appellant therein was that all persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it to crossexamine them. The court was of the opini .....

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, therefore, not amount to breach of the principles of natural justice. Reference was also made to the decision of the Supreme Court in the case of Union of India v. Zalcon Electronics, 2010 (255) E.L.T. 490 (S.C.), wherein the court had expressed the view that the writ petition was not maintainable before the High Court as the facts required detailed adjudication. The court observed that the assessee did not carry the matter in appeal to the Commissioner but straightway proceeded with the writ .....

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he Constitution of India. 8. In rejoinder, Mr. Paresh Dave, learned advocate for the petitioners invited attention to the impugned order to submit that after the directions were issued to the petitioner to file its response to the letter dated 18th January, 2015, no opportunity to file a reply on merits had been given. It was pointed out that in June, 2014, when the written submissions were furnished, the petitioners could not have given any reply till further directions were carried out. It was .....

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t was argued that the case has been going on for at least a decade and hence, the least that could be done was that an opportunity of hearing could have been given to the petitioners. Referring to the impugned order, it was pointed out that the entire order is based on the report of the Chief Chemist and it is for this reason that the petitioners have placed reliance upon the decision of this court in the case of Mahek Glazes Pvt. Ltd. v. Union of India (supra). It was submitted that the petitio .....

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d that the petitioners have twice approached the Commissioner (Appeals) as well as the Tribunal and that in the meanwhile, the provisions of section 35F have been amended and in the first appeal, the petitioners are required to deposit 7.5% of the demand regardless of merits. Therefore, undue prejudice would be caused to the petitioners if they are relegated to avail of the alternative remedy of appeal. It was submitted that the impugned order being in breach of the principles of natural justice .....

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case without following the directions of the Commissioner (Appeals) and confirmed the duty demand. By an order dated 17th October, 2012, the Commissioner (Appeals) dismissed the appeals preferred by the petitioner against the order passed by the adjudicating authority. Against the order of Commissioner (Appeals), the petitioner went in appeal to the Tribunal which, by an order dated 15th January, 2014, remanded the matter to the adjudicating authority with the following observations: "5.1 .....

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made available to the appellant. This order dt. 12.07.2006 has not been appealed against by the Revenue and has become final. However lower authorities at this stage cannot say that opinion of Chief Chemist is not necessary or required when specific directions were given by the first appellate authority. The matter is, therefore, again remanded back to the adjudicating authority to strictly follow the directions given by the first appellate authority in para 8 of the OIA dt. 12.07.2006 and give .....

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or the report of the Chief Chemist by strictly following the directions of the first appellate authority and then give proper opportunity of personal hearing to the appellant after getting the report from the Chief Chemist. 11. It appears that pursuant to the order of the Tribunal, by a letter dated 19th January, 2015, the Joint Commissioner called for the report of the Chief Chemist in respect of the two different test reports from the Central Excise and Customs Laboratory, Vadodara pertaining .....

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ioner in the order dated 12th July, 2006. 12. Subsequently, by a communication dated 2nd March, 2015, a copy of the report dated 25th February, 2015 was furnished to the petitioner and personal hearing was fixed on 18th March, 2015. In response thereto, the petitioner addressed a communication dated 9th March, 2015 to the adjudicating authority inter alia stating thus: "2. ... ... ... Thus, in addition to the direction to send both reports of the Chemical Examiner, Vadodara to Chief Chemist .....

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pport of our claim that the item manufactured by us was not activated. We have also submitted detailed notes and replies in support of our claim that the item was not activated. But, our defence and the reports of IIT, Mumbai and Vaibhav Enviro Consultant do not appear to have been sent to the Chief Chemist, CRCL along with two reports of Chemical Examiners of Vadodara Laboratory. There is no reference In the letter dated 25.02.2015 sent by the Director, CRCL to the reports of above referred two .....

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ra-8 of OIA dated 12.07.2006 are strictly followed in this case or not; in other words, we would like to know whether the reports of IIT, Mumbai and Vaibhav Enviro Consultant of Ahmedabad and also our defence replies were sent to the Chief Chemist, CRCL or not. Therefore, at this stage of the adjudication proceedings, our above referred request may be allowed and details and documents of the correspondence made between the Central Excise Department and the Chief/Director, CRCL, New Delhi in resp .....

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sked to submit its comments thereon. It may be necessary to refer to the contents of the said letter which reads thus:- Sub: Request for opinion in respect of two different test reports from Central Excise and Customs laboratory, Vadodara pertaining to M/s Manek Chemicals Pvt. Ltd. M/r M/s Manek Chemicals Pvt. Ltd, Opposite ONGC colony, Palavasana, District Mahsana are engaged in the manufacture and clearance of Activated Earth/clay/Betonies falling under chapter 3802 of the schedule to the CETA .....

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ETA 1985 and confirmed the demand against the said assessee. The matter is subjudice and CESTAT, Ahmedabad has directed to send two conflicting reports for your opinion. In addition, the defense reply dated 25.11.2011 along with its Annexure is also enclosed for your ready reference. 14. By a communication dated 23rd March, 2015, the petitioner submitted its comments on the letter dated 19th January, 2015 raising various objections and requesting the adjudicating authority to send to the Chief C .....

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ural clay and also the reports/opinions of IIT, Bombay and Vaibhav Enviro Consultant, Ahmedabad were not considered properly, and if the report of the Chief Chemist was at variance with the report of the above referred two esteemed bodies on chemical analysis. The petitioner also requested for a personal hearing before taking any final decision in the matter. After receipt of the above communication, the adjudicating authority proceeded to pass the impugned order without informing the petitioner .....

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s concluded that the directions issued by the Commissioner (Appeals) have been strictly followed by the Department and that the assessee's attitude is because of the fact that the test report from the final authority is not in their favour and they do not want to pay central excise duties. The adjudicating authority has also noted that the assessee has asked for cross-examination of the Chief Chemist, which according to him was nothing but an attempt to keep away from the liability to pay ce .....

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ion of India on the ground of availability of an efficacious alternative statutory remedy is required to be examined. 17. As is evident from the facts as recorded in the Order-in-Original, on behalf of the petitioner, a request had been made for cross-examination of the Chief Chemist, which has been specifically turned down by the adjudicating authority. In the present case, this is the third round in the very same proceedings and right from the first round, the matter revolves around compliance .....

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time of preparing such report. Under the circumstances, it cannot be said that the petitioner was not justified in seeking to cross-examine the Chief Chemist, which opportunity has been denied by the adjudicating authority under the specious plea that the petitioner does not want to pay the excise duty. 18. At this juncture, reference may be made to the following decisions:- 18.1 In Lachhman Das, Tobacco Dealers v. Union of India, (supra), the Delhi High Court held thus:- "4. The main atta .....

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e three main orders have to be quashed." 18.2 In Mahek Glazes Pvt. Ltd. v. Union of India (supra), this court has held thus:- "6. Having heard learned counsel for the parties, we are inclined to interfere on the short ground of serious breach of principles of natural justice in the process of passing final order of adjudication. We say so because the adjudicating authority, though categorically informed by the representative of the petitioners that the petitioners are serious about exe .....

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thority's reluctance to grant it. What we, however, find is that the petitioners had atleast a right to be told whether such application is being granted or refused before final order was passed. When the petitioners prayed for crossexamination and reasonably expected that the same would be granted, they cannot be expected to participate in the adjudicating proceedings up to the final stage. In other words, without dealing with and disposing of the petitioners' application for cross-exam .....

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Commissioner was of the opinion that the petitioners had made such a request somewhat belatedly, would not permit him to, in the facts of the present case, deal with such an application only in the final order itself. Sum total of this discussion is that we are inclined to set-aside the impugned order and request the adjudicating authority to pass a separate order on the petitioners' application/request letter for granting crossexamination of the named witnesses. We are conscious that the C .....

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rs to show relevance for seeking cross-examination of the witnesses." 18.3 The Supreme Court in the case of Ayaaubkhan Noorkhan Pathan v. State of Maharashtra and others, (2013) 4 SCC 465, has held thus:- "24. A Constitution Bench of this Court in State of M.P. v. Chintaman Sadashiva Waishampayan held that the rules of natural justice require that a party must be given the opportunity to adduce all relevant evidence upon which he relies, and further that, the evidence of the opposite p .....

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v. Saroj Kumar Sinha.) 25. In Lakshman Exports Ltd. v. CCE, this Court, while dealing with a case under the Central Excise Act, 1944, considered a similar issue i.e. permission with respect to the cross-examination of a witness. In the said case, the assessee had specifically asked to be allowed to crossexamine the representatives of the firms concerned, to establish that the goods in question had been accounted for in their books of accounts, and that excise duty had been paid. The Court held t .....

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he witness who intends to prove the said fact has the right to cross-examine the witness. This may not be provided by under the statute, but it being a part of the principles of natural justice should be held to be indefeasible right." In view of the above, we are of the considered opinion that the right of cross-examination is an integral part of the principles of natural justice. 27. In K.L. Tripathi v. SBI, this Court held that, in order to sustain a complaint of the violation of the pri .....

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and there was no dispute regarding the veracity of the statement. (See also Union of India v. P.K. Roy and Channabasappa Basappa Happali v. State of Mysore.) In Transmission Corpn. of A.P. Ltd. v. Sri Rama Krishna Rice Mill, this Court held: "9. In order to establish that the cross-examination is necessary, the consumer has to make out a case for the same. Merely stating that the statement of an officer is being utilised for the purpose of adjudication would not be sufficient in all cases. .....

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." 28. The meaning of providing a reasonable opportunity to show cause against an action proposed to be taken by the Government, is that the government servant is afforded a reasonable opportunity to defend himself against the charges, on the basis of which an inquiry is held. The government servant should be given an opportunity to deny his guilt and establish his innocence. He can do so only when he is told what the charges against him are. He can, therefore, do so by cross-examining the .....

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e correctness or otherwise of the report, if the contents of them were proved. The principles analogous to the provisions of the Evidence Act as also the principles of natural justice demand that the maker of the report should be examined, save and except in cases where the facts are admitted or the witnesses are not available for cross-examination or similar situation. 14. The High Court in its impugned judgment proceeded to consider the issue on a technical plea, namely, no prejudice has been .....

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tice. In the absence of such an opportunity, it cannot be held that the matter has been decided in accordance with law, as cross-examination is an integral part and parcel of the principles of natural justice. 19. On a conspectus of the above decisions, it clearly emerges that cross-examination is an integral part and parcel of the principles of natural justice. In State of U.P. v. Mohd. Nooh, AIR 1958 SCR 86, the Supreme Court after referring to various authorities in this regard, has held that .....

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nce, even if an appeal to another inferior court or Tribunal was available and recourse was not had to it. In C.I.T. v. Chhabil Dass Agarwal (supra) on which reliance had been placed by the learned counsel for the respondent, the Supreme Court held thus:- "15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defianc .....

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the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation." Thus, breach of principles of natural justice and defiance of fundamental principles of judicial procedure falls within the exceptions noticed by the Supreme Court in the above decision, wherein the availability of a .....

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e ground that this was nothing but an attempt to avoid the liability to pay central excise duties. The petitioner had also sought for an opportunity of personal hearing after receipt of the report. A perusal of paragraph 22.5 of the impugned order makes it clear that at the time of personal hearing on 19th March, 2015, when the letter dated 18th January, 2015 was furnished to the learned advocate for the petitioner, the petitioner was granted time till 28th March, 2015 to file its response to th .....

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basis of such parameters was correct or not. A request was also made to request the Chief Chemist, CRCL to specifically state whether there was any "steam activation" in respect of Bleach-9, that is to say, whether any activation was brought about by applying steam/heat to natural clay because the specific case of the revenue while passing two adjudication orders previously had been that the petitioner had applied steam and Bleach-9 was activated earth obtained by steam activation. The .....

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ginal dated 12th July, 2006. The petitioner had further stated that after a report/opinion is received from the Chief Chemist, CRCL in this regard, they may have to crossexamine him in case it was found that the opinion/report was not proper and adequate, or that the parameters of the product and natural clay and also the reports/opinions of IIT, Bombay and Vaibhav Enviro Consultant, Ahmedabad were not considered properly, and if the report of the Chief Chemist was at variance with the report of .....

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that the petition should not be entertained on the ground of availability of an alternative remedy under the statute, does not merit acceptance. 21. On the merits of the impugned order, the challenge to the same is only required to be examined on the anvil of breach of principles of natural justice on account of not following the directions issued by Commissioner (Appeals) as well as on account of non-grant of opportunity of crossexamination of the Chief Chemist and non-grant of opportunity of p .....

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efore any final decision in the matter. The adjudicating authority has thereafter referred to the directions issued by the Commissioner (Appeals) and has concluded that the directions given by the Commissioner (Appeals) have been strictly followed by the Department and that the assessee's attitude to dictate the Department as well as the Chief Chemist, CRCL, New Delhi is not correct and justified. The adjudicating authority was of the opinion that such attitude of the assessee is because of .....

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s proceeded to confirm the payment of duty. Thus, the request of the petitioner to refer the matter to the Chief Chemist to submit a report keeping in view the parameters as referred to hereinabove as well as the request to cross-examine the Chief Chemist has been turned down on the ground that it was an attempt to evade the liability to pay central excise duty and the request for personal hearing has also been ignored. As discussed hereinabove, nongrant of opportunity of cross-examination is vi .....

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e not acceptable and thereupon an opportunity of filing reply/submission and personal hearing for discussing merits of the case was also required to be extended to the petitioners in all fairness and propriety. 22. Having regard to the chequered history of the case and the number of rounds of litigation, one would expect the adjudicating authority to ensure that all proceedings are conducted strictly in accordance with the procedure as required in law so as to bring finality to the proceedings b .....

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ued by the Commissioner (Appeals) in true letter and spirit and by not complying with the principles of natural justice has needlessly given rise to another round of proceedings. 23. At this juncture, reference may be made to the contents of the communication dated 19th January, 2015 addressed by the Joint Commissioner, Central Excise, Ahmedabad - III to the Chief Chemist, CRCL which reads thus:- Sub: Request for opinion in respect of two different test reports from Central Excise and Customs la .....

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T M dated 02.07.04, 19.05.04 and 06.07.04 and sent to the central excise laboratory, Vadodara. The samples drawn were examined by the two different examiners of same laboratory which were conflicting. The department had then classified the product under chapter heading 3802 of CETA 1985 and confirmed the demand against the said assessee. The matter is subjudice and CESTAT, Ahmedabad has directed to send two conflicting reports for your opinion. In addition, the defense reply dated 25.11.2011 al .....

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sioner (Appeals) has not been conveyed to the Chief Chemist. Under the circumstances, the Chief Chemist has not applied his mind to the matter in the light of the directions issued by the Commissioner (Appeals). The adjudicating authority, having regard to the directions issued by the Commissioner (Appeals) was required to furnish the operative part of the order passed by the Commissioner (Appeals) to the extent of the directions issued by him as well as the supporting documents, namely, the two .....

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s issued by the Commissioner (Appeals) being brought to the notice of the Chief Chemist, the report does not appear to have been prepared keeping the said parameters in mind. In these circumstances, in the opinion of this court, the directions issued by the Commissioner (Appeals) have not been observed in letter and spirit by the adjudicating authority. 24. In the light of the above discussion, the court is of the view that with a view to bring finality to the proceedings, the matter is once aga .....

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