TMI Blog2016 (6) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... f the circumstances contemplated by clause (a) of Section 9D (1) exists, clause (b) of Section 9D (1) comes into operation. The said clause prescribes a specific procedure to be followed before the statement can be admitted in evidence. There is no justification for jettisoning this procedure, statutorily prescribed by plenary parliamentary legislation for admitting, into evidence, a statement recorded before the gazetted Central Excise officer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word “shall” in Section 9D (1), makes it clear that, the provisions contemplated in the sub-Section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. It is clear, from a reading of the Orders-in-original dated 19.05.2016 and 01.06.2016 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 sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, required to pay the duty, whereafter they are entitled to be refunded that amount of the said duty as has been paid otherwise than by way of utilisation of Cenvat Credit, i.e. through their Personal Ledger Account (PLA). 3. Concededly, all the 4 petitioners, claimed, and were granted, the benefit of Notification 56/2002-CE supra, on the clearances, effected by them, of the products stated to have been manufactured in their premises and cleared to SMIL and other downstream manufacturers. 4. Subsequently, Show Cause Notices were issued to all 4 petitioners, by the Commissioner of Central Excise, Jammu, alleging that the petitioners had wrongfully availed the benefit of exemption, under Notification 56/2002-CE supra, as investigations were stated to have revealed that they were not engaged in the manufacture of finished products at all. The said Show Cause Notices were by and large identical, relying on the same evidence, and covered the following periods : i) Show Cause Notice, dated 29/10/2012, issued to M/s Ambika International (hereinafter referred to as Ambika ), covered the period November 2007 to 2010. ii) Show Cause Notice, dated 04.10.2012, issued to M/s Jay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances effected by it during the period December 2006 to February 2010, was also issued, to Ambika, by the Directorate General of Central Excise Intelligence. 8. Replies, to the above-mentioned Show Cause Notices, were filed by all the 4 petitioners. 9. The above-mentioned Show Cause Notices were initially answerable to the Commissioner of Central Excise, Jammu. However, subsequently, Corrigenda were issued, in each case, making the Commissioner of Central, Chandigarh-II (i.e. Respondent No. 2 herein) the adjudicating authority in each case. 10. In exercise of the power conferred on him by the said Corrigenda, Respondent No. 2 has, by Orders-in-Original dated 19/05/2016 and 01/06/2016, adjudicated the Show Cause Notices issued to Ambika and Jay Ambey. The said Orders-in-Original confirm, against Ambika and Jay Ambey, the entire duty demand proposed in the Show Cause Notices issued to them, with interest, and also imposed equivalent amounts as penalties on the said assessees. 11. These Orders-in-Original, dated 19/05/2016 in the case of Ambika and 01/06/2016 in the case of Jay Ambey, form subject matter of challenge in CWP 12615 of 2016 and CWP 12617 of 2016 which pray fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision requires mandatory pre-deposit of 7 % of the duty demand confirmed against an assessee to appeal thereagainst to the Tribunal, in its judgment in Ganesh Yadav vs. U.O.I., 2015 (320) ELT 711 (All), was cautious enough to keep open the avenue of the writ jurisdiction of the High Court conferred by Article 226 of the Constitution of India, in appropriate cases. Ambika and Jay Ambey seeks to contend that the present case is one such case, in which they ought to be permitted to move this Court under Article 226 of the Constitution of India, instead of relegating them to the remedy of appeal available under Section 35B of the Act and the burden of mandatory pre-deposit which would inevitably follow an which, as they point out, is prohibitive. 14. In view of the fact that the case of the petitioners is essentially premised on Section 9D of The Central Excise Act, 1944, it would be appropriate to reproduce the said provision, in extenso, thus : 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 course of any inquiry or proceeding under this Act shall be rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontained therein. In other words, in the absence of the circumstances specified in Section 9D(1), the truth of the facts contained in any statement, recorded before a gazetted Central Excise Officer, has to be proved by evidence other than the statement itself. The evidentiary value of the statement, insofar as proving the truth of the contents thereof is concerned, is, therefore, completely lost, unless and until the case falls within the parameters of Section 9D(1). 18. The consequence would be that, in the absence of the circumstances specified in Section 9D(1), if the adjudicating authority relies on the statement, recorded during investigation in Central Excise, as evidence of the truth of the facts contained in the said statement, it has to be held that the adjudicating authority has relied on irrelevant material. Such reliance would, therefore, be vitiated in law and on facts. 19. Once the ambit of Section 9D (1) is thus recognized and understood, one has to turn to the circumstances referred to in the said subsection, which are contained in clauses (a) and (b) thereof. 20. Clause (a) of Section 9D (1) refers to the following circumstances : i) when the person wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word shall in Section 9D (1), makes it clear that, the provisions contemplated in the sub-Section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. 24. The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the gazetted Central Excise officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudicating authority, as, in such an atmosphere, there would be no occasion for any trepidation on the part of the witness concerned. 25. Clearly, therefore, the stage of relevance, in adjudication proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Ltd, 2010 (250) ELT 514 (All), which, too, unequivocally expound the law thus: If the Revenue choose (sic chose?) not to examine any witnesses in adjudication, their statements cannot be considered as evidence. 30. That adjudicating authorities are bound by the general principles of evidence, stands affirmed in the judgement of the Supreme 13 of Court in C.C. V Bussa Overseas Properties Ltd, 2007(216) ELT 659 (SC), which upheld the decision of the Tribunal in Bussa Overseas Properties Ltd v C.C., 2001 (137) ELT 637 (T). 31. It is clear, from a reading of the Orders-in-original dated 19.05.2016 and 01.06.2016 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 contemplated by clause (b) of the said sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to cross-examine the persons who have made the said statements, should it choose to do so. In case any such request is made by the assessee, it would be incumbent on the adjudicating authority, i.e. on Respondent No2 to allow the said request, as it is trite and well- settled position in law that statements recorded behind the back of an assessee cannot be relied upon, in adjudication proceedings, without allowing the assessee an opportunity to test the said evidence by cross-examining the makers of the said statements. If at all authority is required for this proposition, reference may be made to the decisions of the Hon'ble Supreme Court in Arya Abhushan Bhandar v U.O.I., 2002(143)ELT 25 (SC), Swadeshi Polytex v Vollector, 2000 (122) ELT 641 (SC). 34. In the case of M/s Fine Aromatics CWP 12616 of 2016 and M/s Shiva Mint Industries CWP 12618 of 2016 , identical to those which had been issued to Ambika and Shiva Mint and which stand adjudicated by Respondent No.2 vide Orders-in-Original dated 19.05.2016 and 01.06.2016 supra, have been issued, and are presently pending adjudication before Respondent No.2. No further orders would be required to be passed, in the said w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
