TMI Blog2016 (8) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 16.02.2012 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 03.06.2016, 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/51875/2016-SM - 52552/2016 - Dated:- 23-6-2016 - Mr. M.V Ravindran Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jat Gupta, Proprietor, M/s Babu Brothers, 51/104, Lal Phatak, Sakarpatti, Nayaganj, Kanpur (xiv) Shri Ajay Kumar Gupta, Proprietor, M/s Ajay Zarda, 78/268 Pan Dariba, Latouche Road, Kanpur (xv) Shri Mohanlal, Proprietor of M/s. Matheshwari Agency, AVM Complex, RG Street, Coimbatore (xvi) Shri Pawan Gupta, Proprietor, M/s Pawan Gupta, 51/104 Lal Pyatak, Sakarpatti, Nayaganj, Kanpur (xvii) Shri Chaganlal Dharmaram, Proprietor of M/s Ashapuri Marketing, 330/A, RG Street, Coimbatore (xviii) Shri P Abdul Latheef, Proprietor of M/s Harshin Enterprises, 9/419-K, Poonthala Building, Pan Bazar, Mavumkunnu Road, Tirur (xix) Shri Mangal Ram Rajm Purohit, proprietor of M/s Sri Samunda Trading Co 907, R G Street, Coimbatore and owner of M/s Samundra Trading Co 916/5, Richwell Complex, R G Street, Coimbatore (xx) Shri Satish Chandra Gupta, proprietor of M/s Prem Agency, (xxi) Shri Rajat Gupta, proprietor of M/s Babu Brothers, (xxii) Shri Anil Khurana, proprietor of M/s Khurana Brothers, 52/44, Nayaganj, Kanpur (xxiii) Shri Ajay Kumar Gupta, proprietor of M/s Ajay Zarda, 78/268, Pan Dariba Latouche Road, Kanpur (xxiv) Statement of Shri Pawan Gupta Proprietor of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SM Altaf Alam and Shri Kotha Venkateshwarlu are also the co-noticees, and hence this authority cannot direct him to be present for cross examination which may cause him to incriminate himself and therefore, the request for their cross-examination is not granted. In this regard, reliance is placed on the following case law: (i) In the case of A K Jayasankaran Nambir, J N S Mahesh Versus Commissioner of Customs, Cochin [2016 (331) ELT 402 (Ker.)] where the Tribunal observed further as Shri Reji Cherian is a co-noticee, this authority cannot direct him to be present for proceedings that may cause him to incriminate himself and therefore the request for cross-examination of Sri Reji Cherian cannot be acceded to The aforesaid request of cross examination of Noticee No.3 and 4 is hereby disposed off This issue with the approval of the appropriate authority. 5. The present appeal is directed against the said letter 03.06.2016 issued to the appellant by the Superintendent (Adjudication) purporting to communicate, to the appellant, the decision of the Commissioner, rejecting the request contained in the appellant's earlier letter dated 24.05.2016 (supra). As the adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under : (v) it is always open to the affected party to challenge the invocation of provisions of Section 9D of the Act in a particular case by filing statutory appeal, which provides for judicial review. 8.1 This Tribunal has also, in Swiber Offshore Construction Pvt Ltd v CC, 2014 (301) ELT 119 (T), entertained an appeal against the decision rejecting the prayer of the appellant in that case for permission to cross examine witness as an when the revenue was seeking to place reliance. Para 12 of the judgement of this Tribunal in the said case reads as under: 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 Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the impugned communication dated 03.06.2016 reveals that letter dated 06.06.2016 was received in the office of the Principal Commissioner only after passing the impugned communication. The letter dated 06.06.2016 quite categorically, sets out the contention of the appellant regarding Section 9D of the Act and 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 16.02.2012 (supra) issued to the appellant, so that the appellant could, if necessary, seeks cross-examination of the said witnesses. 9.2 In fact, the issues raised by the appellant, in its letter dated 06.06.2016 and argued before this Tribunal, are no longer res-integra. They stand decided by a number of authorities, most recently, by the judgement dated 17.06.2016 of the Hon'ble Punjab Haryana High Court in Ambika International v UOI. Section 9D of the Act reads as under: SECTION 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who made the statement is incapable of giving evidence, (iv) the person who made the statement is kept out of the way by the adverse party, and (v) the presence of the person who made the statement cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable. 9.4 In case none of the above circumstances contemplated in clause (a) of Section 9D(1) applies, then clause (b) categorically mandates that the statement shall be treated as relevant for the purposes of proving the truth of the facts which contains only when the person who made the statement is examined as a witness in the case before the Court (or adjudicating authority) and the Court (or adjudicating authority) is of the opinion that having regard to the circumstance of the case the statement should be admitted in evidence in the interest of justice. 9.5 It does not appear that there is any ambiguity in the drafting of clause (b) of Section 9D(1) of the Act. 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 befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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.' Sukhwant Singh (supra) was followed by this Hon'ble Tribunal in Swiber Offshore Construction Pvt Ltd v State of Punjab (supra), which reproduces paras 8, 9 and 18 of the judgement in Sukhwant Singh (supra), where after paras 10 to 12 of the judgement set out the operative portion thereof in the following words: 10 . We therefore fmd force in the submission of the Id. 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. 11 . We also find that the denial of request to permit cross-examination of the Chief Chemist (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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich merit reproduction as under: 8. The main contention of the appellant is that the deponents whose statements have been relied upon by the adjudicating authority were not put to examination-in-chief before providing an opportunity of cross examination. A plain reading of sub-section (l) of section 9D 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 gazette 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. Therefore, there is no doubt about the legal position that the procedure prescribed in sub-section (1) of section 9D is required to be scrupulously followed, as much as in adjudication proceedings as in criminal proceedings relating to prosecution. Therefore, sub-section (1) of section 9D set out the circumstances in which a statement, made and signed by a person before the Central Excise Officer shall be relevant, for the purpose of proving the truth of the facts contained therein. If the circumstances are absent, therefore, the statement, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of Parmarth Iron Pvt. Ltd. (supra) wherein the High Court has observed as under:- 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. 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. 10. We further find that in the case of Smt. Sharadamma (supra), hon'ble Karnataka High Court has observed as under:- 9. It is not the duty of the Court to direct the parties or compel the parties as to in what manner they should conduct their case before the Court or also what quality 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant. The adjudicating authority was therefore bound to follow the binding precedent and in absence of any specified circumstance to consider the statement relevant without examining the witnesses, erred in rejecting the request of the appellant to examine the witnesses and to offer them for cross-examination. 8. The appellant has also relied on the judgment of Hon'ble Apex Court in Sukhwant Singh v. State of Punjab, (1995) 3 SCC 367 to give emphasis on his submission that examination of witness is mandatory unless specified exceptional circumstances mentioned in clause (a) of Section 138B(l) exist. The Hon'ble Apex Court was pleased to hold that - 8. It will be pertinent at this stage to refer to Section 138 of the Evidence Act which provides: 138. Order of examinations. - Witnesses shall be first examined-in-chief then (if the adverse party so desires) cross-examined, then (if the party calling him so desires) re-examined. The examination and cross-examination must relate to relevant facts but the cross-examination need not be confined to the facts to which the witness testified on his examination-in-chief Direction for re-examination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a witness for cross-examination, as a matter of fact, amounts to giving up of the witness by prosecution as it does not choose to examine him in chief. However, the practice of tendering witness for cross-examination in session trials had been frequently resorted to since the enactment of the code of Criminal Procedure, 1898. 14. In view of the above anaylsis, it is clear that during adjudication, the adjudicating authority is required to first examine the witness in chief and also to form an opinion that having regard to the facts and circumstances of the case, the statements of the witness are admissible in evidence. Thereafter, the witness is offered to be cross examined. In the absence of examination in chief, allowing the cross examination, is a futile exercise. We further find that the appellant have challenged the impugned order on the ground that the evidence in the form of statements gathered have no link of the appellant to the activities took at Sandeep Poultry Farm which is required to be examined on the basis of records available during the course of adjudication and the same has not been considered judicially. 9.13 The judgment in Kuber Tobacco stands rei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at, 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 who made the statement is dead, ii) when the person who made the statement cannot be found, iii) when the person who made the statement is incapable of giving evidence, iv) when the person who made the statement is kept out of the way by the adverse party, and v) when the presence of the person who made the statement cannot be obtained without unreasonable delay or expense. 21. Once discretion, to be judicially exercised is, thus conferred, by Section 9D, on the adjudicating authority, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry/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, of the statement, recorded before a gazetted Central Excise officer during inquiry or investigation, would arise only after the statement is admitted in evidence in accordance with the procedure prescribed in clause (b) of Section 9D(1). The rigour of this procedure is exempted only in a case in which one or more of the handicaps referred to in clause (a) of Section 9D(1) of the Act would apply. In view of this express stipulation in the Act, it is not open to any adjudicating authority to straightaw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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-section. The Orders-in-Original, dated 19/05/2016 and 01/06/2016, having been passed in blatant violation of the mandatory procedure prescribed by Section 9D of the Act, it has to be held that said Orders-in-Original stand vitiated thereby. 32. The said orders-in-Original, dated 19/05/2016 and 01/06/2016, passed by Respondent No.2 are, therefore, clearly liable to be set aside. 33. Insofar as the writ petitions filed by M/s Ambika International CWP 12615 of 2016 and M/s Jay Ambey Aromatics CWP 12617 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 writ petitions, apart from directing that Respondent No.2 would adjudicate the said Show Cause Notices by following the procedure prescribed in para 33 supra. Therefore, CWP 12616 of 2016 and 12618 of 2016 stand disposed of accordingly. 9.15 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 03.06.2016, and the matter is remand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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