Gujarat High Court
Commissioner Of Central ... vs Gujarat Cypromet on 28 March, 2013
Author: Akil Kureshi
Bench: Akil Kureshi
COMMISSIONER OF CENTRAL EXCISEAHMEDABAD II....Appellant(s)V/SGUJARAT CYPROMET LTD....Opponent(s) O/TAXAP/269/2013 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 269 of 2013 TO TAX APPEAL NO. 273 of 2013 ================================================================ COMMISSIONER OF CENTRAL EXCISEAHMEDABAD II....Appellant(s) Versus GUJARAT CYPROMET LTD....Opponent(s) ================================================================ Appearance: MR DARSHAN M PARIKH, ADVOCATE for the Appellant(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MS JUSTICE SONIA GOKANI Date : 28/03/2013 COMMON ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI) These Tax Appeals arise out of the judgment of the Customs Excise and Service Tax Appellate Tribunal, Ahmedabad (hereinafter referred to as 'the Tribunal') dated September 04, 2009.
The short issue pertains to the question whether the respective respondent in each Tax Appeal was entitled to cross-examine various witnesses whose statements the Department had relied upon during the course of adjudication proceedings. In the case of adjudication proceedings for evasion of duty, the Department had recorded a large number of statements of various transporters, suppliers and other agencies, including those of the manufacturers, to establish that no goods were genuinely transported or received by the respondents. The attempt on the part of the Department was that various agencies through which the materials were alleged to have been transported did not support the version of the assessee. It was sought to be established that the vehicles were not the transport vehicles. Some of the vehicles never entered the State borders from outside. On such and other similar grounds, the Department desired to establish the case of a large-scale evasion of duty.
Once the adjudicating authority confirmed the duty and penalty, the issue reached the Tribunal. The question that the Tribunal considered for itself at the stage of requirement of pre-deposit was whether the assessees were entitled to cross-examination of the various important witnesses relied upon by the Revenue. There was a difference of opinion between two members forming the Bench. The learned Member (Technical) opined that the respondent should be asked to deposit certain sums by way of pre-deposit to enable them to pursue their appeals on merits. He gave detailed reasons why the cross-examination of different witnesses was not necessary. The learned Member (Judicial), however, held a different opinion. She expressed the view that the cross-examination of transporters and other witnesses was essential. She, therefore, held and observed as under :
6. I find no reason to discriminate the present appellant from the other appellants similarly situate. Even if there is other evidence on record to uphold the findings of adjudicating authority, the fact that the principles of natural justice have been violated, is sufficient for the impugned order to be set aside. I may, here observe that, where even the impugned order is passed by the adjudicating authority without affording opportunity of personal hearing, the matters are being remanded, even though there may be sufficient evidence against the appellant to come to a conclusion against them. As such, without going to the merits of the case, I am of the view that impugned order is liable to be set aside on the ground of violation of principles of natural justice and the matters need to be remanded for de-novo consideration after observing principles of natural justice.
The matters were, therefore, placed before the third Member, who in his opinion dated July 17, 2012 concurred with the view of the Member (Judicial) and held and observed as under :
12. In my view, the Revenue's case in both these sets of appeals is mostly based upon the statements recorded of various persons and not on any corroborative evidences, as has been claimed.
13.
In view of the foregoing, in my considered opinion, the conclusion reached by the ld.Member (Judicial) in these cases is correct and I concur with the same.
Having heard the learned counsel Shri Darshan Parikh for the Revenue and having perused the documents on record, it emerges that in this set of cases, the majority opinion was that the duty could not have been confirmed and penalty could not have been imposed without offering cross-examination of the important witnesses. The ld.Member (Judicial) had held that from the beginning the stand of the respondents was that the cross-examination was necessary. It was this opinion, which the third Member agreed to. He, therefore, held that the conclusion of the ld.Member (Judicial) was correct. We have already reproduced the relevant portion of the decision of the Member (Judicial), who earlier formed a Bench of the Tribunal. By virtue of such orders, the appeals should be placed before the adjudicating authority for de novo consideration for observing principles of natural justice.
In the facts and circumstances of the case, we are of the opinion that the Tribunal committed no error. Learned counsel Mr.Darshan Parikh was unable to counter the observations of the Tribunal that such cross-examination was asked for during the course of adjudication proceedings itself. If that be the position, when the Revenue is placing heavy reliance on certain statements of the witnesses recorded during the course of investigation, without there being anything peculiar, the noticees were well within their right to seek cross-examination.
In the case of Telestar Travels Pvt. Ltd. v. Special Director of Enforcement, (289) E.L.T. 3 (SC), the Apex Court even while observing that in the proceedings under the Foreign Exchange Regulation Act, 1973, the Rules of procedure did not apply to such adjudication proceedings, observed that that does not mean that in a given situation, the cross-examination may not be permitted to test the veracity of deposition sought to be issued against a party against whom action is proposed to be taken. It was further observed that it was only when a deposition goes through the fire of cross-examination that a Court or a statutory authority may be able to determine and assess its probative value. Using a deposition that is not so tested, may therefore amount to using evidence, which the party concerned has had no opportunity to question. Such refusal may in turn amount to violation of the rule of a fair hearing and opportunity implicit in any adjudicatory process, affecting the right of the citizen.
The reasons given by the adjudicating authority for refusing to grant cross-examination are simply not acceptable. He recorded the following reasons to reject the request of the respondents :
37.2 The said request for cross-examination was considered by the undersigned and it was observed that the reasons given for cross-examination of the above persons, in the letter dated 28-5-2008 of the Advocate, did not appear to be justifiable and proper, inasmuch, as the persons listed at Sl. No.3, 4, 5, 7, 8, 17 and 18 are owners/ drivers/ authorized persons of Transport Co. and remaining persons are either suppliers of raw materials or are engaged in business of cheque discounting. The statements of the above persons were recorded during the course of investigation and based on the evidence brought on record, the impugned show cause notice was issued. Further, case records indicate, that at no point of time, they have retracted their statements. Moreover, the statements of the concerned persons have been recorded without threat, duress or coercion. Thus, the department has brought out the facts with corroborative evidences on record.
Merely because the statements, according to the adjudicating officer, were recorded without threat, duress or coercion or that the witnesses at no stage retracted their statements, cannot be a ground for rejecting the request for cross-examination.
Under the circumstances, in our opinion, the Tribunal Committed no error. These Tax Appeals are, therefore, dismissed.
(AKIL KURESHI, J.) (MS SONIA GOKANI, J.) Aakar Page 7 of 7