Customs, Excise and Gold Tribunal - Delhi
B.M. Auto India vs Collector Of C. Ex. on 1 December, 1988
Equivalent citations: 1989(20)ECR364(TRI.-DELHI), 1989(41)ELT69(TRI-DEL)
ORDER Harish Chander, Member (J)
1. M/s. B.M. Auto India, 21, Kasturba Gandhi Marg have filed an appeal, being aggrieved from the order No. V(68)15/67-CE/86/2799, dated the 18th August, 1988. Simultaneously, a stay application duly supported with an affidavit was also presented.
2. Shri D.N. Kohli, the learned Consultant has appeared on behalf of the appellants. He has stated that there was denial of principles of natural justice. He has referred to internal page 22-23 of the Order-in-original where the appellants had requested for the cross-examination of the three witnesses, namely, Shri O.P. Kumar, Supdt. (Preventive), Central Excise, Faridabad, the officer of E.S.L, Faridabad and Superintendent, Central Excise, Sonepat.
3. Shri Kohli, the learned consultant has stated that the appellant's request for the cross-examination was not allowed rather the appellant was asked the points on which the appellant wanted to cross-examine the witnesses. He has argued that it is contrary to the provisions of law. He has stated that there was denial of principles of natural justice. Predeposit of duty and penalty amounting to Rs. 7,77,165.87 and penalty of Rs. 4 lakhs may be dispensed with and the appeal may also be heard and the matter may be remanded to the adjudicating authority for fresh adjudication.
4. Sh. D.M. Borade, the learned Departmental Representative for the Department stated that the appellants were given an opportunity to cross-examine and has referred to page 23 of order-in-original. He has opposed the grant of stay.
5. After hearing both the sides, we are of the view that cross-examination of the witnesses should have been afforded to the appellants as requested. The Supreme Court in the case of Kalra Glue Factory v. Sales-tax Tribunal and Ors. reported in 167 ITR 498 had held that cross-examination should be allowed. We dispense with the predeposit of the duty and penalty amounts. After dispensing with the penalty amount, the Bench had confronted the learned Departmental Representative that the Bench proposes to dispose of the appeal also. To this, Shri Borade stated that he has no objection to the hearing too. On pages 22-23 of the Collector's order, there are observations to the effect that the appellants had made a prayer for the cross-examination of the witnesses. The relevant portion of the order on pages 22-23 is reproduced below -
"The request of the party to cross-examine the three persons was considered and they were requested to identify the specific points on which the three persons were to be cross-examined, to which the party vide their letter dated 20.5.88 submitted a general reply stating that it is difficult for them to give in advance any particular points on which cross-examination is to be done. Thus, it was clear that the party wanted to cross-examine the three persons more in die nature of fishing enquiry/examination to put up their defence and they had really nothing particular requiring any cross-examination. Insofar as the three persons are concerned, their evidence is already part of the show cause notice and is known to the party as a matter of record. Excepting asking for a general cross-examination of three persons, since the party has not specified or even indicated any particular point of fact or law requiring cross-examination in the course of their defence, it is obvious that the party is more trying to enter into a fishing enquiry which is further corroborated from their further reply dated 10th June, 1988 wherein they have stated that their reply cannot be completed without cross-examination of the witnesses. This given an impression that the party really wants to submit a reply to the show cause notice only after cross-examination of the so called three witnesses. At the same time, they claim that their reply dated 11.4.88 was really not an interim reply but a final one. Accordingly, the party was given opportunity for hearing on 13.6.88 when they failed to appear reiterating in their letter dated 10.6.88 that they can make further submissions only after cross-examining the witnesses. The party further wanted a confirmation as to whether witnesses had been called for cross-examination and the advocate had to go to Nepal for a week etc. The chain of events of replies and correspondence in this case clearly indicates that the party has already submitted their defence vide their reply dated 11.4.88 and are really not interested to avail the opportunity of personal hearing granted to them on 13.6.88. Accordingly, I proceed with the case to decide it on the basis of the records available and the defence submitted by the party."
6. The above reproduced extracts will show that there was denial of principles of natural justice and it is against the provisions of Indian Evidence Act. It is a settled law though Indian Evidence Act is strictly not applicable in Revenue proceedings but the principles of Indian Evidence Act are applicable.
7. The Supreme Court in the case of Kalra Glue Factory v. Sales-tax Tribunal and Ors. reported in (1987) 167 ITR 498 had held as under -
"In arriving at the conclusion that the transaction entered into by the appellant firm was in the course of inter-State trade, the Sales-tax Tribunal relied, inter alia on the statement of a partner of another firm which had not been tested by cross-examination. The Supreme Court set aside the order of the Tribunal as well as the order in revision of the High Court therefrom and remitted the matter to the Tribunal giving directions regarding the documents offered by the appellant before the Supreme Court to be produced as well as the documents which the Tribunal had called for and had not been produced."
8. In view of the above discussion, we set aside the impugned order and remand the matter to the Collector having jurisdiction and further order that the adjudicating authority will grant an opportunity of personal hearing and also afford necessary opportunity for the cross-examination of the witnesses in accordance with law.
In the result, the appeal is allowed by way of remand.
Pronounced in open court.