JMC Projects India Ltd @Hash C.S.T.-Service Tax – Ahmedabad

This Appeal is directed against the order of Principal Commissioner communicated by the Superintendent whereby the request of the appellant for

granting of cross-examination of the witnesses has been denied in the proceeding of Show Cause notice No DGCEI/AZU/36-58/2015-16 dated

20.10.2015.

Shri Jigar Shah, Learned Counsel appearing on behalf of the appellant submits that in the Show Cause Notice various statements of various persons

were relied upon. Some of the witnesses are third parties. The demand in the show cause notice was issued relying on those statements without any

documentary evidence. He further submits that the Adjudicating authority denied the cross â€"examination without any proper basis. In support of his

submission, he placed reliance on this tribunal’s judgment in the case of Kudrat Corporation final order No A/11131/2020 dated 29.07.2020.

On the other hand, Shri Sharad Airan, Learned Assistant Commissioner (Authorized Representative) appearing on behalf of the revenue submits

that the Adjudicating Authority rejected the request for cross- examination by giving proper reason. He further submits that the statements which

were relied upon in the show cause notice were not retracted. Therefore, the appellant cannot be allowed cross-examination of witnesses. He placed

reliance on following judgments: Â

· 2010 (261) ELT (Mad)- AL Jalaludeen Vs. Dy Dir. Of Enforcement Directotrate, Chennai. Â

· 2006, (194) ELT 290(Tri-Del) â€" Jagdish Shanker Trivedi Vs.CC, Kanpur Â

· 1997 (89) ELT 646 (SC)- Surjeet Singh Chhabra Vs. Union of India. Â

· 2001(138) ELT 556 (Tri-Kol)- Fortune Impex Vs. CC, Calcutta. Â

· 1996 (81) ELT 320 (Tri) â€" Calicut Rubber Company Vs. CCE,Cochin Â

· 2001 (142) ELT 224 (GOI)- G Subramanian Â

· 2018 (15) GSTL 298 (Tri- Bang)- Paragon Steels P Ltd Vs. CCE, Calicut Â

· 2020 (371) ELT 814 (Tri- Mum)- Spenta Multimedia P Ltd Vs. CC, Nhava Sheva-II

We have heard both sides and perused the records. We find that there is no dispute that the witnesses of which cross-examination has been sought

for by the appellant have given their statements during investigation and such statements were relied upon in the Show cause notice. Some of the

statements given by the third parties. The appellant for making their effective defence wish to cross-examine the witnesses. In our view the appellant

should be given all the opportunity for making their defence including the cross- examination. Denial of cross- examination will amount to unfair justice

in the case and also violation of principles of natural justice. The identical issue has been considered by this tribunal in the case of Kudrat Corporation

(Supra) were in the following judgments was passed:

“4. We have heard both sides and perused the records. We find that the Adjudicating Authority has given precisely the reasoning for the

rejection of the request of the cross examination of the witnesses in para 6 of the order which is reproduced below: “6. The request for

cross examination of SIO who recorded the statements of the witnesses and who obtained technical opinion on the subject issue, I find that

the relied upon documents have already been 3 | P a g e C / 1 0 2 5 2 / 2 0 2 0 provided alongwith Show Cause Notice and the cross

examination of the SIO shall not bring out any new facts other than the facts which have already been recorded in the statements and in the

technical opinions. The request for cross examination of 11 persons is not maintainable as nothing new is likely to come out and will only

delay adjudication proceedings. In this regard, I refer to the judgment of Hon’ble High Court of Kerala in the case of N.S. Mahesh

reported as 2016 (331) ELT 402 (Ker.) wherein the Hon’ble Court upheld the denial of cross examination of the departmental

officers.†From the above finding, the Adjudicating Authority has stated that the request for cross examination of 11 persons is not

maintainable as nothing new is likely to come out and will only delay adjudication proceedings. We do not agree with the Adjudicating

Authority that only due to likelihood of delay in adjudicating proceeding, the cross examination can be denied. There is no shortcut in the

adjudication process. It is a fact on record that except SIO, all other persons have either given the statements under section 108 of the

Customs Act, 1962 or taken their stand by way of letters. Shri Ashok Prasad and Shri Bipin Kumar have admittedly given the technical

opinions which have been taken on record as evidence in the Show Cause Notice. Therefore, these evidences were used against the

appellant. During the adjudication proceeding, any evidence can be admitted only when the witness is cross examined under section 138 B

which is reproduced below: SECTION 138B. Relevancy of statements under certain circumstances. â€" (1) A statement made and signed

by a person before any gazetted officer of customs 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. From the plain reading of the above section, particularly, clause (b) of sub

section 1 of section 138(b), it is clear that the statement made and signed by person before the Custom Officer can be admitted as evidence

when the person 4 | P a g e C / 1 0 2 5 2 / 2 0 2 0 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. In the above section, no exception is provided or any discretion is provided for the Adjudicating Authority to allow or not to allow the

cross examination. Particularly, in the present case, when the appellant have vehemently requested the cross examination of the witnesses.

The Adjudicating Authority cannot have his own assumption and presumption that whether anything will come out from the process of cross

examination. It is up to the defendant that whether the cross examination will help for his defence. The cross examination is a vital part of

principles of natural justice. Therefore, we are of the view that the appellant should be allowed cross examination, the witnesses except the

SIO. The SIO is part of the investigation and the Show Cause Notice has relied upon various statements, letters and opinions. Therefore, the

cross of SIO is unwarranted. As per our above discussion, we hold that the learned Principal Commissioner being adjudicating authority

shall grant cross examination of witnesses as requested by the appellant. Accordingly, the appeal is allowed in the above terms.â€​

In view of the above judgment which is self explanatory, when the noticee seeks for cross examination of witnesses, in the interest of justice and as

mandated in section 9D of Central Excise Act, 1944, the Adjudicating Authority is under legal obligation to grant cross-examination of witnesses to the

noticee. Therefore, the appellant’s prayer for seeking cross- examination of witness is just and proper and the same is allowed.

Consequently the impugned order is set aside. Appeal is allowed.

(Pronounced in the open court on 17.11.2020)