Customs, Excise and Gold Tribunal - Mumbai
Popular Carpet Inds. vs Commissioner Of Customs (P) on 15 February, 1996
Equivalent citations: 1996(84)ELT244(TRI-MUMBAI)
ORDER P.K. Desai, Member (J)
1. Today only the stay petitions were listed for hearing. However, considering the submissions made, we feel that the matter ought to be remanded for limited purpose detailed here below: The appeals are, therefore, taken up for hearing by granting waiver against pre-deposit and are heard on the said issues. The stay petitions had come up for hearing on 21-4-1996 when non-compliance with the principles of natural justice was pleaded. The adv. Dr. Kantawala was heard that day and the matter was kept back for Mr. Puri to seek instructions on the copies of the documents that were filed before the Tribunal on the particular day. Today the matters have been taken up for hearing.
2. Dr. Kantawala, the ld. advocate appearing for M/s. Popular Carpet Inds. submits that there has been a violation of the principles of natural justice in as much as this appellant asked for cross-examination of one Shashikant Shah who is also a co-noticee and on whom the personal penalty has been imposed. The purpose for asking the cross-examinaion was that based on his statement recorded in the year 1991, the appellants have been charged to have diverted the goods imported under the Import and Export passbook scheme and that the version that said Shashikant had given was contrary to the factual position and hence they wanted to cross-examine the said person. He submits that the adjudicating authority, right from the beginning, was not inclined to grant cross-examintion and at the stage of personal hearing, though made a specific enquiry from the said Shashikant, never issued any summons to him nor did he compel him to appear as a witness for the purpose of cross-examination. In his submission when the adjudicating authority has relied upon the statement made by Shri Shashikant Shah, it was incumbent upon him to offer the said person for cross-examination and having not done so he has violated the principles of natural justice and has denied the opportunity to the appellants in providing proper defence against the allegations made. The second point on which Dr. Kantawala has submitted is that when the statement of the Managing Partner of the appellant came to be recorded, he submitted that the goods alleged to have been imported under disputed Bills of Entry had already been used and that they had complete record of consumption in the form of consumption register. The copies thereof were also produced at the time of giving the statement and have been referred to in the reply to the show cause notice. He submits that the said evidence had not been taken into consideration and therefore, the defence available to the appellant, has not been considered which proves that the ld. adjudicating authority has not properly applied his mind to the defence theory and has based his conclusion by holding that no such evidence was available to them. For this purpose he refers to the observations made by the adjudicating authority in his order. He also refers to the fact that the order has been signed on 15th June 1995 and then referring to Para 16 of the said order, he pleads that a reference is made to a letter dated 16-6-1995 which has been received by the Dept. on 19-6-1995. In his submission either the order has not been signed on that day on which it is purported to have been signed or there is non-application of mind and in any case this indicates that the appellants have not been given a proper deal by the adjudicating authority. He also submits that these two aspects taken together, shows that the finding of the authority below has been based on non-appreciation of proper evidence and therefore, either they should be granted unconditional stay and waiver or in the alternative, the matter should go back to the adjudicating authority.
3. Shri Dave appearing for the appellant Shri Shashikant Shah has during the arguments, given a letter duly signed by the appellant Shri Shashikant himself and countersigned by the said advocate, to the effect that Shashikant is prepared to face the cross-examination. As for the purpose of stay and waiver of the pre-deposit, Mr. Dave has submitted that the appellant was merely a broker not directly concerned in following the provisions of the import and export policy and that he was only earning some commission. The penalty is not warranted and in any case, he is able to make a deposit of 10% of the penalty amount.
4. Shri Mondal, the ld. DR however, submits that the cross-examination has not been denied by the adjudicating authority but he could not offer Shashikant for cross-examination because of his own dis-inclination to offer as a witness and compelling him to appear as a witness would have resulted in violation of the provisions contained in Article 20(3) of the Constitution. He submits that the adjudicating authority is not competent to enforce the presence and in any case he could not have compelled a co-noticee to give evidence when he was not willing to do so. So far as the letter submitted by Shri Shashikant is concerned, it is his submission that a change of mind does not bear any explanation and one can only read betwen the lines. In his submission, therefore, such a willingness coming at this stage could not be viewed as a bona fide act on the part of Shashikant. On merits he submits that even assuming that the evidence of Shashikant is ignored there is sufficient evidence available on record to prove involvement of the appellants and to establish the diversion of the goods to the open market. He principally refers to the submission made by the Managing Director of the appellant's firm. So far as the other aspect is concerned, he submits that the adjudicating authority has satisfied himself about the consumption register produced, being not the one covering the subject import and hence though in so many words, he has not expressed about non-accepting of the consumption register, he has impliedly indicated that the defence raised was not a genuine one. He also refers to the admission of the appellants that they have not been able to procure and produce the transport vouchers and other documents showing the transfer or the transport of the goods from Bombay to Varanasi or any other place and there are evidences available on record which show that the goods have been diverted to the market and are disposed of in and around Bombay and other places but have not reached Varanasi. In his submission therefore, not giving any speaking order in relation to the rejection of the documentary evidences that have been produced, would not tantamount to non-compliance with the principles of natural justice or could not be taken as the one of non-application of mind.
5. So far as Shashikant is concerned, he submits that the role played by Shashikant and his knowledge about the diversion of the goods imported under the Import & Export Control Scheme, is evident and penalty imposed on him is fully justified. He has even received Rs. 2 lakhs and therefore, the order of deposit of Rs. 1 lakh would not operate as any financial hardship on him.
6. We have considered these submissions and it is apparent from the observations made by the adjudicating authority that Shashikant was a conoticee and he did not agree to being cross-examined by the appellants Popular Carpet Inds, and it was because of this that he could not be cross-examined by the party. The allegation of the ld. advocate that adjudicating authority had already decided for not offering Shashikant for cross-examination does not appeal to us. If that was so, he would not have inquired from Shashikant who was present and who was required to remain present because of his matter being taken up on the very same day and undertaken an empty formality of getting a denial from Shri Shashikant. Non-permitting of cross-examination of Shashikant by the adjudicating authority clearly appears to be on account of refusal of Shashikant for being cross-examined by anybody. The adjudicating authority under these circumstances could not have compelled him to come as witness for purpose of cross-examination. The observations of the said adjudicating authority are in confirmation to the provisions of law.
7. Shri Shashikant has now filed an application expressing his willingness to be cross-examined. The application filed is slip shod in. nature and does not indicate as to why he has changed his mind and has expressed his willingness to be cross-examined and what were the compelling circumstances then prevailing which necessitated him to oppose to his being cross-examined. Though we are not inclined to make any observations on the issues, we do not accept the proposal as a bona fide one coming from a person who has once denied to be cross-examined before the adjudicating authority as a genuine one and hence we are not impressed with the same and we are not inclined to remand the matter on this aspect.
8. However, there appears to be an arguable case in relation to the documentary evidence adduced by the appellants at the time of recording of the statement on 23-11-1993. The documents are in the nature of consumption, register and other documents. It is true that the direct evidence available in the nature of transport receipts, octroi certificates etc. are not there but then the evidence that is produced could be looked into as a secondary evidence indicating due receipt of the goods under the subject Bs/E and their consumption. This was very much available before the ld. adjudicating authority but it appears that he has not fully examined those and based his considered opinion. Even if he had to reject this evidence, there had to be a speaking order. A passing reference made at one stage on which the ld. DR has relied upon, does not appear to be sufficient to hold that he has examined those documents and have held them as not relating to the subject Bs/E, and it does not convince us to believe that he had gone into the details of those documents and have come to the conclusion that the goods imported under the subject Bs/Es have been shown as consumed. Even for the purpose of rejecting such evidence a speaking order is called for. This exercise could have been undertaken by the Tribunal but for the fact that we feel that the entries in the consumption register as produced with the statement dated 23-11-1993 call for further scrutiny and investigation, which can be done only at the adjudication stage and not by the Appellate Tribunal who cannot sit as a substitute to an adjudicating authority and hence the only alternative that appears is the one of remanding the matter on limited issue of examining the evidence produced by way of defence and for drawing appropraite conclusion as to the acceptability or otherwise thereof. In the result we set aside the order of the authority below and remand the matter with a specific clarification that the remand is ordered only on this particular issue as to the non-examination of the documents produced by way of defence by the appellant.
9. Because the matter of M/s. Popular Carpet Inds. is remanded, it appears fair and reasonable that the order passed against Shashikant Shah should also go for re-examination before the said authority as it is difficult to segregate these two aspects. In the result, the order against Shri Shashikant Shah is also set aside. Both the appeals are, therefore, allowed by way of remand, [where] the opportunity shall [be] offer to the hearing without seeking any adjournment.