TMI Blog2017 (4) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... mmunication dated 10.02.2016 stating the reasons as to why it seeks to crosse-xamine the signatory of the CRCL report. However, the request has fallen on deaf ears. It is settled legal position that the right to crosse-xamine ought or to have opportunity to effectively exercise that right is an essential part of principles of natural justice. Under the circumstances, the adjudicating authority was required to give fair opportunity to the petitioner to not only deal with the report of the CRCL, which was received subsequently but also to give an opportunity to the petitioner to crosse-xamine the Director (Revenue Laboratories) in respect of the contents of the report and the inferences drawn therein. Non-grant of opportunity to crosse-xamine the Director (Revenue Laboratories) in respect of the report on which reliance has been placed by the adjudicating authority, also amounts to breach of principles of natural justice. Matter is restored to the file of the adjudicating authority from the stage of furnishing of the report of the chemical analyzer to the petitioner, to decide the same afresh in accordance with law, after affording the petitioner an opportunity to cross-examine - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944 and confirming the duty demanded with interest and penalties. Being aggrieved, the petitioner has filed the present petition. (4) Mr. Devan Parikh, Senior Advocate, learned counsel with Mr. S.N. Thakkar, learned advocate for the petitioner, submitted that the adjudicating authority had obtained the report of the Director (Revenue Laboratories), CRCL, dated 30.12.2015, after the personal hearing was over and that a copy of such report was supplied to the petitioner under letter dated 25.01.2016, pursuant to which the petitioner had immediately addressed a letter dated 10.02.2016 to the adjudicating authority and in addition to disputing the contents of the report, had requested for cross-examination of the concerned chemical analyzer and had also requested the authorities to visit the factory of the petitioner to verify the manufacturing process and to grant a further opportunity of personal hearing. It was submitted that without responding to such request, the adjudicating authority passed the final order of adjudication, confirming the huge demand of excise duties with interest and penalties. It was argued that insofar as the adjudicating authority has not granted an oppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be said that any prejudice has been caused to the petitioner warranting interference in exercise of powers under article 226 of the Constitution of India. (5.1) It was next submitted that the petitioner has challenged an Order-In-Original passed by the adjudicating authority, against which a statutory appeal lies to the Customs, Excise and Service Tax Tribunal (hereinafter referred to as the Tribunal ). It was further submitted that the dispute involved in the case before the adjudicating authority relates to a classification dispute and that against any order that may have been passed by the Tribunal in an appeal preferred against the Order-In-Original, an appeal would lie to the Supreme Court and not to the High Court and therefore, the petition deserves to be dismissed on the ground of maintainability alone. In support of his submissions, the learned counsel has placed reliance upon the decision of the Bombay High Court in the case of Patel Engineering Limited V. Union of India , 2014 (307) E.L.T. 862 (Bom.) wherein the court, did not accept the argument on behalf of the appellant therein that any prejudice had been caused to the assessee by not permitting the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners that the petitioners are serious about exercise of their right to cross-examination and further that any meaningful participation in the adjudication proceedings can take place only after such cross-examination is granted, the authority proceeded to decide such request only along with the final order of adjudication. Whether the petitioners had a right to seek cross-examination in the facts of the present case, is not our brief at the moment. We, therefore, refuse to comment on the petitioners insistence for cross-examination or authority s reluctance to grant it. What we, however, find is that the petitioners had at least a right to be told whether such application is being granted or refused before final order was passed. When the petitioners prayed for cross-examination 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. If he was of the opinion that the request for cross-examination was not tenable, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 crosse-xamine the representatives of the firms concerned, to establish that the goods in question had been accounted for in their books of account, and that excise duty had been paid. The Court held that such a request could not be turned down, as the denial of the right to crosse-xamine, would amount to a denial of the right to be heard, i.e., audi alteram partem. 26. In New India Assurance Co. Ltd. v. Nusli Neville Wadia , this Court considered a case under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 and held as follows: 45. If some facts are to be proved by the landlord, indisputably the occupant should get an opportunity to crosse-xamine. The witness who intends to prove the said fact has the right to crosse-xamine 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 vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vious statements of the witnesses proposed to be examined against him. Unless the said statements are provided to the Government servant, he will not be able to conduct an effective and useful cross-examination. 29. In Rajiv Arora v. Union of India , this Court held : 13. ... Effective cross-examination could have been done as regards the 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 caused to the appellant by such non-examination. If the basic principles of law have not been complied with or there has been a gross violation of the principles of natural justice, the High Court should have exercised its jurisdiction of judicial review. 30. The aforesaid discussion makes it evident that, not only should the opport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntertained ignoring the statutory dispensation. (20) 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 an alternative remedy will not act as a bar in exercising writ jurisdiction under Article 226 of the Constitution of India. (7) In the opinion of this court, the above decision would be squarely applicable to the facts of the present case inasmuch as the twopronged attack against the impugned Order-In-Original is based upon the breach of principles of natural justice, firstly on the ground of non-grant of opportunity to cross examine the signatory of the CRCL report, and secondly on the ground of non-grant of any opportunity of personal hearing to deal with the contents of the CRCL report. In the facts of the present case, while it is true that the central issue involved in the case before the adjudicating authority relates to a classification dispute, however, it is equally true that none of the questions raised before this court relate to classification of the subject goods. The questions before this cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .12.2015, no opportunity of hearing whatsoever, has been granted to the petitioner to deal with the contents thereof. (10) On behalf of the respondents a contention has been advanced that the adjudicating authority has merely placed reliance on the findings recorded in the said report and not on the inferences drawn therein and hence, non-grant of an opportunity of personal hearing does not cause any prejudice to the petitioner and that the petitioner should be relegated to the alternative remedy of filing an appeal before the Customs, Excise and Service Tax Tribunal. (11) A perusal of the impugned order reveals that the adjudicating authority in Paragraph No.23.5 of its order has recorded that it has mainly relied on the test result of Dr. Y.K.S. Rathore, Director (Revenue Laboratories) wherein the actual chemical composition of the product under consideration has been analyzed. Thus, it is evident that conclusions arrived at by the adjudicating authority are based upon the findings recorded in the report submitted by Dr. Y.K.S. Rathore, Director (Revenue Laboratories), CRCL, but no opportunity of hearing has been granted to the petitioner to deal with the said report nor ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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