The Madras High Court, in a recently quashed the Order of the CESTAT, Chennai in which the appellant was denied the right to cross-examine the necessary parties at the time of proceedings under the Excise Act.
An assessment order was passed against the assessee by the additional commissioner of Excise, Salem. Being aggrieved by the Order, the assessee has approached the Commissioner of Excise Appeals). Before the appellate authority, it has been contended that there was a violation of principles of natural justice in not permitting the appellant to cross-examine the persons from whom statements were recorded. By observing that cross-examination is not a matter of right, when the burden of proof had been discharged by the department, the appellate authority rejected the same.
On second appeal, the CESTAT set aside the order of the appellate authority and remanded the matter to the appellate authority for fresh decision, after giving an opportunity of hearing to both sides.
While considering the matter, the appellate authority observed that “The appellant have also argued that cross examination was not allowed. In this regard, it is observed that right to cross-examination is not an absolute right and the question whether the appellant was entitled to cross-examination is a question which may largely depend on the facts of the case.” The authority also cited the decision of The Allahabad High Court [1993 (68) E.L.T. 548 (All) in support of their findings.
The matter was again brought before the CESTAT, Chennai. One of the grounds urged before CESTAT, Chennai is that when the department has mainly relied on the statement of third parties ie., purchasers/buyers of the impugned goods to come to a conclusion of clandestine removal of the goods by the appellant, opportunity ought to have been given. Before CESTAT, Chennai, contention has also been made that when there was a categorical denial of the Managing Director of the appellant, the appellate authority ought to have allowed cross examination to unravel the truth. Reliance has also been placed on the decision reported in 2009 (248) ELT 497 (Tri.Ahemadabad).
The assessee, being aggrieved by this approached the High Court challenging the impugned order. The Court opined that the plea regarding cross examination was not properly answered by the Tribunal in the instant case. The Division Bench comprising of Justice S.Manikumar and Justice D. Krishnakumar, pointed out that “Mr.V.Sundareswaran, learned counsel for the Revenue / 2ndrespondent, is also not in a position to point out as to whether CESTAT, Chennai, has adverted to the said plea. But, sought to justify the orders passed by the authorities including CESTAT, Chennai, contending that when burden is discharged by the department, there is no need to permit cross examination.On the facts and circumstances of the case, we are of the view that when a specific plea regarding violation of principles of natural justice is raised, CESTAT, Chennai, is bound to record a specific finding, which is conspicuously absent.” On this basis, the petition was allowed and the matter was remanded to the CESTAT, Chennai to consider and to record a finding on the specific plea regarding cross examination of the persons from whom statements were recorded / witnesses.
Read the full text of the order below.