Custom, Excise & Service Tax Tribunal
M/S. N. Ranga Rao & Sons Pvt. Ltd vs Commissioner Of Central Excise, ... on 1 December, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Application(s) Involved: E/Stay/20803/2016 in E/21403/2016-SM Appeal(s) Involved: E/21403/2016-SM [Arising out of Order-in-Original No. V/33/15/27/2015.Adjn/6377/16 dated 01/09/2016 passed by the Commissioner of Customs, Central Excise and Service Tax, Mysore] M/s. N. Ranga Rao & Sons Pvt. Ltd. [Formerly known as M/s. Ranga Rao & Sons] No. 1553, Vani Vilas Road [Mahatma Gandhi Road] Mysore 570 004 Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax, Mysore S1/S2, Vinaya Marga, Siddartha Nagar, Mysore 570 011 Karnataka Respondent(s)
Appearance:
Shri B.N. Gururaj, Advocate 22/2, III Main Road, Chamarajpet, Bangalore 560 018 For the Appellant Shri J. Harish, AR For the Respondent Date of Hearing: 29/11/2016 Date of Decision: 01/12/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 21338 / 2016 Per: S.S GARG Today the matter was listed for hearing on the stay petition. I have heard both the counsels at length and with their consent, I proceed to dispose of the main appeal itself.
2. The present appeal is directed against the order passed by the Commissioner dated 01.09.2016 vide which the Commissioner rejected the prayer of the appellant for cross-examination of the witnesses whose statements have been recorded by the Department. Briefly the facts of the case are that the appellant is engaged in the manufacture of agarbathi and incense sticks under the brand name Cycle. Prior to 01.04.2015, the appellant was a partnership firm. But with effect from 01.04.2015, the appellant has been registered as a Private Limited Company under the Companies Act. The issue in the present appeal arises out of pending adjudication of two show-cause notices issued by the respondent. Out of totally 14 show-cause notices issued to the appellant, 12 have been adjudicated and the appeal is pending before this Honble Tribunal. 13th and 14th show-cause notices are pending adjudication. The appellant had requested for opportunity to cross-examine four of the five witnesses relied upon by the Revenue. This appeal is filed against the order of the respondent rejecting the opportunity to cross-examine the said witnesses. The appellant states that the agarbathi manufacture is a handicraft industry, as recognized by the Government of India, Ministry of Commerce. It is for nurturing and encouraging this industry, the Central Government has deemed it fit to charge the fragrant agarbathis to Nil rate of duty. However, the department was of the view that since the agarbathi masala is chargeable to duty, and that the appellant would not be entitled to the benefit of the exemption for captive consumption of agarbathi masala under Notification No. 67/95-CE dated 16.03.1995. Subsequent to March 2014, the Commissioner has issued two periodic show cause notices for the periods between April 2014 to September and October 2014 to February 2015. Since the issues in both the notices are identical, the appellant filed common reply and sought cross-examination of Prof. R. Damodharan, Mr. K.S. Ananthapadmanabha and Mr. V. Prakash, and Mr. H. Gururaja Rao, CMA. The purpose of cross-examination was to elicit clarificatory replies from the witnesses. The appellant also annexed separate list of proposed questions to be put to the witnesses with the reply to the notice, so that the respondent would know the intent and purpose of the request for cross-examination. But the learned Commissioner has rejected the prayer of the appellant for cross-examination. Hence the present appeal.
3. Heard both the parties and perused the records.
4. Learned counsel for the appellant submitted that the impugned order rejecting the prayer of the appellant seeking cross-examination is not sustainable in law as the same is against the precedent decisions decided by various judicial fora. In support of his claim, he relied upon the decision in the case of MSS Food Processors V. CCE, C & ST, 2016-TIOL-2321-CESTAT-Del. wherein the Honble Tribunal has held that a communication rejecting the request for opportunity to cross-examine the witnesses is an appealable order. Hence this appeal against the impugned order is maintainable under Section 35B of the Central Excise Act. He further relied upon the decisions in the case of GKN Sinter Metals P. Ltd. Vs. CCE reported in 2015 (324) E.L.T. 153 (T-Mum.) wherein an order passed under Rule 4(4) of Central Excise Rules, 2002 rejecting application for storage of goods outside the factory was held to be an appealable order. Similarly in the case of CCE Vs. Girish B Mishra reported in 2016 (339) E.L.T. 67 (Guj.) wherein an order rejecting compounding application is an appealable order. Such order is not an administrative order. The learned counsel further submitted that the depositions of witnesses cannot be relied on when they cannot be produced for cross-examination even if the statements are not the sole basis for the proceedings. He also submitted that cross-examination is an integral part of the principles of natural justice. He also submitted that if the Revenue chooses not to examine the witnesses, their statements cannot be considered as evidence. If the Revenue relies on the statements of witnesses, cross-examination must be allowed. In support of his submission, he relied upon the following authorities:
a) Kanan Traders & Anr. V. Jt. CCE 2016-TIOL-1411-HC-Mad-CX.
b) Manek Chemicals Pvt. Ltd. V. UOI 2016 (334) E.L.T. 302 (Guj.)
c) CCE V. Parmarth Iron Pvt. Ltd. 2010 (260) E.L.T. 514 (All.)
d) G-Tech Industries V. UOI 2016 (339) E.L.T. 209 (P&H) 4.1. He also submitted that the stage of considering the relevance arises only when the statements are admitted in accordance with the procedure under Section 9D. Unless and until the adjudicating authority can legitimately invoke the exceptions in Section 9D(1)(a), statements cannot be considered as relevant. For this he relied upon G-Tech Industries (supra).
5. On the other hand the learned AR vehemently opposed the maintainability of this appeal on the ground that the present appeal does not involve any demand of duty or interest or imposition of penalty. He further submitted that as per Section 9, cross-examination can only be sought of a person whose statement has been recorded by the Central Excise Officer and in the present case the statement of an expert, who has only given an opinion, cannot be called for cross-examination.
6. After considering submissions of both the parties and perusal of the various judgments, I am of the view that the present appeal is maintainable against the impugned order denying the opportunity of cross-examination to the appellant. Further I am of the view that the cross-examination only be confined to those witnesses whose statement has already been recorded by the Department under Section 14 and cross-examination of a person whose statement has not been recorded cannot be granted. Accordingly I allow the appeal of the appellant and hold that appellant is entitled to cross-examination of the witnesses whose statement has already been recorded by the Revenue. With this the impugned order is set aside and the appeal is disposed of.
(Order pronounced in Open Court on 01/12/2016) (S.S GARG) JUDICIAL MEMBER iss