TMI Blog2016 (8) TMI 837X X X X Extracts X X X X X X X X Extracts X X X X ..... the manner in which it is to operate and, therefore, seeks to be provided the records of the examination-in-chief of the witnesses whose statements are referred to in the Show Cause Notice dated 06.07.2012 issued to the appellant, so that the appellant could, if necessary, seeks cross-examination of the said witnesses are no longer res-integra and stands decided by a number of authorities, most recently by Hon'ble Punjab and Harayana High High Court in Ambika International & others v UOI [2016 (6) TMI 919 - PUNJAB AND HARYANA HIGH COURT]. Therefore, in view of the above unequivocal expression of law as contained in a plethora of judicial authorities, the present appeal is allowed by setting aside the decision as communicated to the appellant by the impugned letter dated 20.05.2016, and the matter is remanded to the Principal Commissioner with a direction to adjudicate the Show Cause Notice strictly by complying with the mandate of Section 9D of the Act, in accordance with the directions contained in the judgment of Hon'ble High Court of Punjab & Haryana in Ambika International (supra). - Appeal disposed of - E/51793 of 2016 - SM - 52551/2016 - Dated:- 23-6-2016 - Mr. M.V. Rav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Udyog (xix) Shri Liyakat Ali, owner of Godown at 28-A, Sector C, Industrial Area, Sanwer Road, Indore, (xx) Shri Sadhwani, partner of the appellant, (xxi) Shri Amarchand Upadhyay, partner of appellant, (xxii) Shri Nitish Wadhwani and (xxiii) Shri Kishore Wadhwani 3. On receipt of the abovementioned Show Cause Notice, the appellant filed its reply, thereto, vide letter dated 05.04.2016. The attention of the Commissioner was invited, in the said letter, to the provisions of Section 9D of the Act, with the specific averment that any statement, recorded before a gazetted Central Excise officer, under the Act, would be relevant in adjudication proceedings only if the maker of the said statement was examined in chief and his cross examination is allowed. As such, it was requested, vide the said communication, that the records of examination in chief of the persons whose statements were relied upon in the Show Cause Notice dated 06.07.2012 (supra), be provided to the appellants, so that they could request for cross examination of the said persons if need be. 4. The impugned communication dated 20.05.2016 purports to be a response to the said letter dated 05.04. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... states that a decision or order taken by the adjudicating authority can be appealed before the Appellate Tribunal. Adjudicating authority has been defined under the Act to mean any authority competent to pass any order or decision under this Act, but does not include the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), Commissioner of Central Excise (Appeals) or Appellate Tribunal. My attention was also invited to the following decisions in support of the contention that an appeal would lie against the decision rejecting cross-examination: (i) J K Cigarattes Ltd v CCE, 2009 (242) ELT 189 (Del) (ii) Swiber Offshore Construction Pvt Ltd v CC, 2014 (301) ELT 119 7. Countering the arguments of the appellant, the learned DR relied upon following judgements of the Hon ble Tribunal in support of the contention that no appeal lies against the decision rejecting cross examination: (i) Delta Overseas v Commissioner of C.Ex S.T v Delta Overseas, 2016 (333) ELT 126 (T) (ii) Jhaveri Polymers Pvt Ltd v CCE, 2009 (236) ELT 508 (T) 8. I have carefully considered the arguments raised by both the sides on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt s submission, a statement recorded, before a gazetted Central Excise officer under Section 14 of the Act, cannot be relied upon, for proving the truth of the contents thereof, straightaway by the adjudicating authority, unless and until the said statement falls within one of the categories referred to in clause (a) of Section 9D (1) of the Act in all other cases, the maker of the said statement has to be examined in chief before the adjudicating authority, who, thereafter, has to arrive at a reasoned conclusion that the statement deserves to be admitted in evidence, where after he has to offer the maker of the said statement to the assessee, for cross-examination if sought. The appellant emphasises that, in fact, the impugned communication is not only clearly contrary to Section 9D of the Act it, in fact, completely misunderstood the request of the appellant, as it merely communicates rejection of the appellant s request for cross examination of S/Shri Anmol Mishra and Ramesh Kumar Dammani. The appellant submits that its communication, dated 05.04.2016, was not for cross-examination of Anmol Mishra and Ramesh Kumar Dammani but was for being provided copies of the records of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vancy 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 relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, - (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under 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 provisions 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. 9.3 Even without referring to the various judicial a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. What the said clause categorically requires is that the person, whose statement was earlier recorded before a gazetted officer of Central Excise, has to be examined as witness before the adjudicating authority who, thereafter, has to arrive at an opinion that having regarded to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. It is only after both these steps are complied with, that the statement would be eligible for being treated as relevant in the proceedings so that the assessee can, if it so chooses, exercise its option to test the evidence by way of cross examination. 9.6 It may be stated, at this juncture, itself, that there does not appear, at this point of time, to be any uncertainty regarding the requirement of allowing cross examination by an assessee, of the statements upon which the adjudicating authority proposes to rely against it. The law, in this regard, stands settled by the judgement of the Hon ble Supreme Court in Arya AbhushanBhandar v UOI, 2002 (143) ELT 25 (SC) and Swadeshi Polytex Ltd v CCE, 2000 (122) ELT 641 (SC), judgment of the Hon ble High Court in Basudev Garg v CC, 2013 (294) ELT 353. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st (DGH), whose opinion is relied in the show cause notice, is also wholly unjustified. 12 . The appeals are therefore allowed with direction to the Respondent adjudicating authority to follow Section 138B and to forthwith summon the witnesses for examination under intimation to the appellant, and to offer them for cross-examination by the appellant if their statements are to be considered as relevant and admitted in evidence in the interest of justice. The appellant is also entitled for cross-examination of the Chief Chemist (EC), DGH. The Appellant shall also extend its full co-operation in expediting the adjudication process so that it can be completed within the time as directed by the Hon ble High Court. 9.9 Similarly, para 16 of the judgement of the Hon ble Allahabad High Court in CCE v Parmath Iron Pvt Ltd, 2010 (250) ELT 514 (All.) holds in a similar vein thus: 16 . We, therefore, have no hesitation in holding, that there is no requirement in the Act or Rules, nor do the principles of natural justice and fair play require that the witnesses whose statements were recorded and relied upon to issue the show cause notice, are liable to be examined at that stage. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer shall be relevant, for the purpose of proving the truth of the facts contained therein. If the circumstances are absent, therefore, the statement, which has been made during the course of inquiry/investigation, before a gazette Central Excise Officer, cannot be treated as relevant for the purpose of proving the facts contained therein as observed by Hon'ble Delhi High Court in the case of J.k.Cigarettes (supra) wherein hon'ble high court has observed as under:- 12. Bare reading of the above section manifests that under certain circumstances, as stipulated therein, statement made and signed by those persons before any Central Excise Officer of a gazetted rank during the course of inquiry or proceedings under this Act can be treated as relevant and taken into consideration if under the given circumstances such a person cannot be produced for cross-examination. Thus, this provision makes such statements relevant for the purposes of proving the truth of the facts which it contains, in any prosecution for an offence under the Act in certain situations. Sub-section (2) extends the provision of sub-section (1) to any proceedings under the Act other than a proceeding befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of evidence they should place before the Court. But the duty of the court is only to appreciate the case in the proper perspective and on the basis of what is placed before the Court. Even with regard to the prayer for permitting the applicant to cross-examine the plaintiff, the prayer is misconceived as the question of cross examination arises only when a witness has tendered evidence in chief-examination. Under section 138 of the Indian Evidence Act, cross-examination follows chief-examination, but not without chief-examination. If there is no chief-examination, there is no cross examination. It is only witness who is examined in chief who can be cross-examined. Therefore, a prayer for cross-examination of the plaintiff even when the plaintiff has not been examined in chief is ridiculous and not provided for under Section 138 of the Evidence Act. The Trial Court has rightly rejected the application. No scope for interference with an order of this nature. 11. We further find that in the case of Swiber Offshore Construction Pvt.Ltd. (supra), this Tribunal has further observed as under: 6. We therefore have no hesitation in holding that the impugned Order passed by the Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfined to the facts to which the witness testified on his examination-in-chief. Direction for re-examination. - The re-examination shall be directed to the explanation of matters referred to in cross-examination; and if new matter is, by permission of the Court, introduced in re-examination, the adverse party may further cross-examine upon that matter. 10. We therefore find force in the submission of the ld. counsel for the appellant. We find no reason to justify rejection of request made by the appellant to the adjudicating authority in light of Section 138B of the Act, to summon witnesses for examination and to offer them for cross-examination if their statements were to be considered as relevant and admitted in evidence in the interest of justice. 12. We further find in the case of Bussa Overseas Properties Ltd., this Tribunal again observed as under:- 24. The fact that in cases relating to smuggling or indeed any case civil or criminal cannot or need not been proved for degree of mathematical precision or that the department governed by strict rules of evidence is again no answer, The department is certainly bound by the contents of the Customs Act, 1962 and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication and the same has not been considered judicially. 9.13 The judgment in Kuber Tobacco stands reiterated in the subsequent Final Order dated 29.04.2016, passed by this Tribunal in Alliance Alloys Pvt Ltd v CCE [Final Order No:343-347/2016-CHD dated 29.04.16] 9.14 Most authoritatively, perhaps, this position of law is now crystallized by the judgment dated 17.06.2016 of the Hon ble Punjab Haryana High Court in Ambika International (supra). Paras 15 to 34 thereof are reproduced as under: 15. A plain reading of sub-section (1) of Section 9D of the Act makes it clear that clauses (a) and (b) of the said sub-section set out the circumstances in which a statement, made and signed by a person before the Central Excise Officer of a gazetted rank, during the course of inquiry or proceeding under the Act, shall be relevant,for the purpose of proving the truth of the facts contained therein. 16. Section 9D of the Act came in from detailed consideration and examination, by the Delhi High Court, in J.K. Cigarettes Ltd. vs. CCE, 2009 (242) ELT 189 (Del). Para 12 of the said decision clearly holds that by virtue of sub-section (2) of Section 9D, the provisions of sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be judicially exercised is, thus conferred, by Section 9D, on the adjudicating authority, it is self-evident inference that the decision flowing from the exercise of such discretion, i.e. the order which would be passed, by the adjudicating authority under Section 9D, if he chooses to invoke clause (a) of sub-section (1) thereof, would be pregnable to challenge. While the judgment of the Delhi High Court in J K Cigarettes Ltd. (supra) holds that the said challenge could be ventilated in appeal, the petitioners have also invited attention to an unreported short order of the Supreme Court in UOI and another vs. GTC India and others in SLP ( C) No. 2183/1994 dated 03/01/1995 wherein it was held that the order passed by the adjudicating authority under Section 9D of the Act could be challenged in writ proceedings as well. Therefore, it is clear that the adjudicating authority cannot invoke Section 9D(1)(a) of the Act without passing a reasoned and speaking order in that regard, which is amenable to challenge by the assessee, if aggrieved thereby. 22. If none of the circumstances contemplated by clause (a) of Section 9D (1) exists, clause (b) of Section 9D (1) comes into operatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpress stipulation in the Act, it is not open to any adjudicating authority to straightaway rely on the statement recorded during investigation/inquiry before the gazetted Central Excise officer, unless and until he can legitimately invoke clause (a) of Section 9D(1). In all other cases, if he wants to rely on the said statement as relevant, for proving the truth of the contents thereof, he has to first admit the statement in evidence in accordance with clause (b) of Section 9D(1). For this, he has to summon the person who had made the statement, examine him as witness before him in the adjudicating proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice. 26. In fact, Section 138 of the Indian Evidence Act, 1872, clearly sets out the sequence of evidence, in which evidence-in-chief has to precede cross-examination, and cross-examination has to precede re-examination. 27. It is only, therefore, (i) after the person whose statement has already been recorded before a gazetted Central Excise officer is examined as a witness before the adjudicating authority, and (ii) the adjudicating a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal CWP 12615 of 2016 and M/s Jay Ambey Aromatics CWP 12617 of 2016 are concerned, they are allowed by setting aside the Orders-in-Original, dated 19/05/2016 and 01/06/2016, passed by Respondent No 2 and impugned therein. Resultantly, the Show Cause Notices, issued to Ambika and Jay Ambey, are 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 and Jay Ambey in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20.05.2016, and the matter is remanded to the Principal Commissioner with a direction to adjudicate the Show Cause Notice strictly by complying with the mandate of Section 9D of the Act, in accordance with the directions contained in para 33 of the judgment of the High Court of Punjab Haryana in Ambika International (supra) which are, for ready reference, reiterated as under: (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 and Jay Ambey in this case. (iii) Statements recorded during investigation, under Section 14 of the Act, whose makers are not examined in chief before the adjudicating authority, i.e. befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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