2024-VIL-1178-TEL-CE
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CENTRAL EXCISE High Court Cases

Central Excise - Section 9D of Central Excise Act, 1944, Statements under Certain Circumstances, Cross-Examination of Witnesses - Confirmation of duty demand and penalty imposed by the adjudicating authority against assessee-Respondent for clandestine clearance of excisable goods without payment of duty - The Commissioner passed a detailed order based on the statements of 12 witnesses, but the CESTAT set aside the demands and penalties - Whether the statements recorded by the Gazetted Central Excise Officer during the investigation can be relied upon in the adjudication proceedings without producing the witnesses and providing an opportunity to the assessee to cross-examine them – HELD – The case revolves around the interpretation and application of Section 9D(1)(b) of the CEA, 1944 -The ld. counsel for the appellant-Revenue has taken pains to highlight that the word ‘prosecution’ is employed in Section 9D and therefore, it cannot be stretched to be applied on ‘adjudication proceedings’ - the statement recorded by the Gazetted Central Excise Officer during enquiry or investigation is in a quasi criminal proceeding. In this view of the matter, the word ‘prosecution’ needs to be understood - The proceeding may lead into imposition of penalty. In some cases, it may also result into ‘prosecution’. Thus, the line of argument of revenue that because of use of the word ‘prosecution’ in Section 9D of the Excise Act, the requirement of producing evidence in adjudication proceeding can be done away with, is not tenable - the Section 9D(1)(b) of the CEA, 1944 is applicable in both prosecution and adjudication proceedings. The incriminating statements recorded during the investigation cannot be used against the assessee unless the witnesses are produced in the adjudication proceedings and the assessee is given a reasonable opportunity to cross-examine them. - the failure to produce the witnesses and provide cross-examination opportunity would render the statements inadmissible - the incriminating material/statements recorded behind the back of the petitioner cannot be used against him, unless, such witnesses are produced in adjudication proceedings and they were permitted to be cross-examined by the petitioner – The revenue appeal is dismissed and the order of the CESTAT setting aside the demands and penalties is upheld
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