Opportunity to Cross-Examine Material Witness not provided as per Section 9D of Central Excise Act: CESTAT allows Appeal [Read Order]

The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Chandigarh Bench, allowed an appeal since an opportunity to cross-examine a material witness was not provided to the appellant as per Section 9D of the Central Excise Act, 1944.

The facts of the case are that few manufacturing units in Delhi were engaged in fraudulently passing CENVAT credit of duty to various furnace units of Punjab. After investigations concluded, the Directorate General of GST Intelligence recorded the statements of the land owners and proprietors among other related parties to allege that goods were not manufactured in the four factories.

The counsel for the appellant submits that the orders are not sustainable as they are passed without appreciating the facts, the law and the binding judicial precedents. It was submitted that no opportunity to cross-examine the statements was given to the appellant side, and given the foundation of case being these statements the same had been requested in the reply to the show cause notice (SCN).

The counsel further submits that a similar situation arose in Jindal Drugs Pvt. Ltd. v. UOI (2016) where the matter was remanded to the Adjudicating Authority for the purpose of granting cross-examination of the material witness. It was submitted that the respondent had confirmed the demand on presumption and has not supported it with cogent evidence.

The opposing counsel argued that the right to cross-examine is not an absolute right and that cross-examination will not serve any useful purpose. The tribunal considered that the appellant had requested for cross-examination and the same was denied without giving any sufficient grounds.

The bench of S. S. Garg (Judicial Member) accordingly remanded the case back to the Adjudicating Authority for a fresh decision after affording the opportunity of cross-examination of material witnesses and by following the procedure as prescribed under Section 9D of the Central Excise Act. The appeals were allowed by way of remand.

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