TMI Blog2022 (1) TMI 1407X X X X Extracts X X X X X X X X Extracts X X X X ..... e right of the parties against whom the show cause notices issued to call those persons to make a request for the defence witnesses of even those witnesses who have been dropped out by the department to be examined as defence witnesses - it was held that the same was impermissible as no one can be cross examined without being examined by one of the parties as the witness. Section 128 of the Customs Act, which is pari materia with Section 14 read with Section 9 D of the Act. Now, Section 14 of the Act provides power to summon person to give evidence and produce evidence in inquiries. This authorizes the Central Excise Officer empowered by the Central Government to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making for any of the purposes of this Act. As per the order which is impugned here, the statement of five persons were found to be relevant in the adjudication proceedings, they were admitted as evidence and therefore, the request for cross examination of those witnesses had been granted - Per se, there cannot be any dispute with regard to the right to exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing authority communicated to the petitioner that there is no genuine reason to ask for the cross examination and accordingly directed the petitioner to submit the final reply to the show cause notice. 7. On 06.09.2019, the petitioner filed a written submissions in support of his request and urged for permitting the defence witnesses, whose statements had been recorded under Section 14 of the Act by the department in terms of Section 9D of the Act and urge to issue the summons under Section 14 of the Act. 8. The original adjudicating authority issued the notice for personal hearing and fixed the final hearing on 11.09.2019 without considering the application cross examination. 9. The petitioner aggrieved by the said denial/rejection of the application for cross examination without assigning the reason preferred Special Civil Application No.20429 of 2019. This Court issued the notice for final disposal and the matter could not be listed because of the spread of COVID-19 virus and the pandemic. 10. On 29.10.2020 pending the Special Civil Application No.20429 of 2019 and despite the undertaking given by the counsel of the respondent, the respondent passed ex-parte order-in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing and then must go on. Since total four Personal hearings have already been granted to the assessee by the present Adjudicating Authority, no further PH was issued. 14. Learned Standing Counsel Mr. Sharma, as we have noted above, has acted very fairly. According to us, this trend of not respecting their own words is unpalatable and untenable, therefore, we quash and set aside the order-inoriginal which has been passed without availing an opportunity of hearing. 14. The petitioner thereafter on 09.11.2021 gave a fresh application for issuance of summons to the defence witnesses and urged for grant of opportunity of personal hearing. This application was rejected and the respondent fixed the final hearing on 10.12.2021. 14.1 According to the respondent, this is in a clear defiance of the Court s direction and hence, the present petition with the following prayers: 10 (A) That Your Lordships may be pleased call for records and proceedings before Respondent No. 2₁ The The Commissioner of CGST and Service Tax, Vadodara -Il Commissionerate at Vadodara to verify the noting of directions on the file; (B) That Your Lordship may please be ordered to set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances, which can be considered proper as the petitioner has approached the department with unfairness and arbitrariness. 15.4 According to the respondent, Section 9 D of the Act is for the purpose of determination of relevancy of the statements already relied upon in the show cause notice. Those witnesses, whose statements have been recorded, they have been offered for cross examination, but at no point of time, prior to passing of the order, the petitioner indicated that they wanted to examine any witness as defence witness. It is further contended that the inquiry revolves on recording of the statements of witnesses and culminates into the completion of inquiry in the foremost show cause notice. To determine the relevancy of the statements relied upon, the witnesses are offered for cross examination. The petitioner had requested for improvisation at every stage and this petition is also nothing but to fill up the lacuna. 16. This Court has heard at length the learned advocate, Mr. Hemant Dharmadhikari appearing for the petitioner with learned advocate, Mr. Dhaval Shah and learned senior standing counsel, Mr. Utkarsh Sharma for the respondent. Since this very issue ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zes 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 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 expect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s examine witnesses, would violate the principles of natural justice. (See also Union of India v. T.R. Varma, Meenglas Tea Estate v. Workmen, Kesoram Cotton Mills Ltd. v. Gangadhar, New India Assurance Co. Ltd. v. Nusli Neville Wadia, Rachpal Singh v. Gurmit Kaur, Biecco Lawrie Ltd. v. State of W.B. and State of U.P. 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 cross examine 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 cross examine, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 witnesses produced against him. The object of supplying statements is that, the Government servant will be able to refer to the previous 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 appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ternative remedy is available to the aggrieved person or the statute under which 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. (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 two pronged 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of some of the panel members was justified. In the light of the above discussion, the petitioner has made out a clear case of gross violation of the principles of natural justice warranting interference by this court in exercise of powers under Article 226 of the Constitution of India. 9. The Courts have thus upheld the rights of cross examination and any denial of the opportunity on that count has been held to be in violation of the principle of natural justice. It is the right of the defence/litigating parties to ask for the examination of defence witnesses who could be from any pool which can include those witnesses whose statements have been recorded and not relied upon by the Department while prosecuting the person. In the instant case, the statements have been recorded of many of the witnesses and some of whom have not been examined as they have not been relied upon in the show cause notice. Surely from the said pool, the defence can make a request for examination of witnesses as defence witnesses and that simply cannot be denied by the authority. We are not in agreement with the respondent department when it disputes that basic proposition that the statements of prose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -examining them without examining them as defence witnesses and that simply is impermissible and hence, the order impugned cannot be interfered with. 12. We need to notice with dismay, the event while this petition was pending. This Court notices the order passed by this Court where the notice for final disposal was issued on 21.11.2019. Thereafter, on 05.01.2021 the following order was passed: - 1. The order passed by this Court on 09.03.2020 reads as follows: Learned advocate Mr. Viral Shah appearing for respondent no.2 requests for time on the ground that affidavit-in-reply is required to be filed, which he ensures to do on or before 19.03.2020 with an advance copy to the other side. The urgency is made out by learned counsel appearing for the petitioner since the adjudicatory authority is in the midst of hearing. According to learned advocate Mr. Shah, till 19.03.2020, no proceedings shall be undertaken before the concerned authority as according to him, no date is fixed for the said purpose. Let this matter be posted on 19.03.2020. 2. According to the learned Advocate, Mr. Dhaval Shah, during the period of pandemic, the respondent authority has already completed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... witnesses till the learned senior standing counsel stepped in. 17.2 However, passing of the order despite the assurance on the part of the learned senior standing counsel was something which was disapproved by the Court. 18. The Court had remanded the matter back to the authority, which passed the order-in-original to hear from the stage where it was when the parties had approached this Court. 19. Noticing the fact that it was at the stage where the application for cross examination had been denied and that had been challenged. It would not be proper on the part of the respondent to say that it will have to be heard at final hearing without even considering request for defence witnesses. 20. We notice that on matter being remitted back to the concerned authority, the petitioner had made an application for issuance of summons to the defence witnesses, where it had asked for all the witnesses (32 in numbers) to be examined as the defence witnesses. 20.1 By its order dated 18.11.2021 the same has been denied on the ground that such a request is to be subject to Section 128 of the Customs Act, which is in pari materia with Section 14 read with Section 9D of the Act. Agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eding under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court. SECTION 14. Power to summon persons to give evidence and produce documents in inquiries under this Act. (1) Any Central Excise Officer duly empowered by the Central Government in this behalf, shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making for any of the purposes of this Act. A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned. (2) All persons so summoned shall be bound to attend, either in person or by an authorised agent, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and to produce such documents and other things as may be required: Provided that the exemptions under Sections 132 and 133 of the Code of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt as they apply in relation to a proceeding before a Court. 21.3 As per the order which is impugned here, the statement of five persons were found to be relevant in the adjudication proceedings, they were admitted as evidence and therefore, the request for cross examination of those witnesses had been granted. Whereas in respect of statement of rest of 31 witnesses, they were not relied upon being not relevant evidence in the show cause notice. The order denies the examination as defence witnesses on the ground that the statements recorded under Section 14 of the Act, if statements are recorded to elicit the truth and in a process some witnesses emerged as key witnesses and they may tell the truth, but the same may not be relevant to the investigation. Therefore, only those who are found relevant should be examined as the witnesses of prosecution and they can be permitted to be cross examined. 22. Noticing the fact that the petitioner had approached this Court on the ground of not permitting the cross examination of those witnesses, who had not been examined as the prosecution witnesses for not having found them relevant for the purpose of adjudication, the Court had clear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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