Commissioner of Central Tax v. M/s Rayalaseema Steel Re-rolling Pvt. Ltd.

Telangana HC4 Sept 2023CEA/68/2019

Case brief

AI extract

What is this about?

This appeal challenges the Customs, Excise and Service Tax Appellate Tribunal's order remanding the matter to the Adjudicating Authority. The High Court held that the Tribunal's remand order was correct, noting that the Department retained its right to defend its case and the Adjudicating Authority's discretion was unchanged despite the delay.

What did the court decide?

The appeal was rejected and no order as to costs passed. The proceedings before the Adjudicating Authority stand revived.

Commissioner of Central Tax Vs M/s Rayalaseema Steel… — Customs and Excise | Telangana HC (2023)

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[³³⁸⁶ l

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IN THE HIGH COURT FOR 1 AT HYDJRIBhTE^{OF TELANGANA}

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Molp.lyrrlE FouRrH DAy oF SEPTEMBER rwo rHousAND AND rwENTv innEE-..

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PRESENT

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THE HON'BLE SRI JUSTICE P.SAM KOSHY rHE H.N,BLE "*,^{rr.r,"=t[?M NARA'ANA *rr=.r,}

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C.E.A.No: 68 of 2019

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Between:

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Commissioner of Centra Bha va n.^-n! rii Jte, ffi * r::', #f*tT#1r.ffi ,^cornm issionera te,^pos nett presenUy: The iomn commisi.ioneiai;, pxJil.jil,B?lllil, r?l Ffl[,t",li;i", fiffi..io#ff#oo,osT

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AND

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...Appe anuAppeflant

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#Ifrif:?fiiT,,:iii:i'ff;!:lli.T["h,i;i,xffiiiiitfl :t*Bi3,1J8i"t,li.

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...RespondenURespondent

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Appeal under Section 35G of the Central Excise Act, 1g44 against the final order No. N3O372t2O1g dt 18-03_2019 (Tagged in common final order No tu30372-30 376t201g dated 18-03-2019 in Appear No. Er30573t2018 0n the file of Customs Excise & Service Tax Appellate Tribunal, Regional Bench, Hyderabad, preferred against the order-in-originar No.HyD_EXCUs_oo4-coM_ 27-17-18' dared 22-01'2018 0n the fire of the commissioner of centrar rax, Rangareddy GST Commissionerate.

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Counset for the Appellant: SRt B NARAYAN REDDY, SC for Customs & Central Excise

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Counsel for the Respondent: SRI V.T. KALYAN

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The Court delivered the following: JUDGMENT

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THE HON'BLE SRI JUSTICE^{P.SAM KOSHY} ,

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AND

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THE HON'BLE SRI JUSTICE LAXMI^{NARAYANAALISHETTY}

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C.E.A. No.68 of 2O19

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JUDGMENT ftier^{Hon'ble SnJu-sllteP.SA', NOSHY,,}

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Heard Mr. V.T. Kalyan, learned^{counsel for the appellant'}

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The instant petition has^{been filed assailingthe order dated} 18.03.2019 passed in^{Appeal No.E/3O628/2018on the file of the} learned Customs,^{Exciseand Service Tax AppellateTribunal(briefly} "Tritrunal' hereinafter).

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Vide the impugned order dated^{I8.03.2O19, the Tribunalhas} remanded back the matter to^{the AdjudicatingAuthority to proceed} further and decide the mattcr on merits^{after the appellants beforethe} Tribunal being given a fair opportunity^{of crosi-examiningthe} witnesses.

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l.earned Senior Counsel for the^{appellantsubmits that the} Tribunal has not properly examined^{the decision of the Hon'ble} Supreme Court in case of Telstar^{Trauels PrioateLimitedand} others us. Enlorcement Directorater^{and, also the recentdecision of} the Division Bench o[ this Court^{in caseof M/s.Manldho;ri Stainless} Wire Prkntc Limited us- Urrion^{of India2.LearnedSeniorCounsel} referring to the findings^{given by the Assessing Authorityin refusing}

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'^{(zor:)s scc sag}

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'(zorz)scc^{ontine uyd :az}

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permission for cross-examination of the witnesses. subrnits that once when the A,ljudicating Authority has given specific reasons for why he had refusecr permission to cross-examine, the Tribunal has not held anything sc far as the said finding of the Assessing Authority to be bad in law. He submits that it was well within the prerogative of the Adjudicatinll Authority to have decided whether permission for cross_ examination of the witnesses ought to have been granted or not and the authoriry for the reasons mentioned in his order. He further submits tha - the impugned order does not warrant any interference.

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A perr:sal of the impugned order passed by the Tribunal would reveal that the Tribunal had taken into co.sideration the decisiorr o[ the Hon'ble High Court of Punjab & Harana in case of M/s.Jind.al Drugs Priv<tte Limited. o:nd rrnother us. (Jnion of Indio. o.nd. dnother3, wherein, the High Court of punjab &, Haryana rclying upor-r the decision of the Hon'ble Supreme Court rendered in case of C.C. us. .Bussc Orlerseas Ptopertles Limited+ at para Nos.25 ancl 26 has held as undet':

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That adjudicating authorities qre bound by lhe general pinciples cJ euidence, s ands affinned in the ludgnlent of the Suprente Court in C.C. u. Bussa Ouer:;eas Properties Limited., 2OO7 (216) ELT 659 (SC), Luhich upheld the deciston- of tie Tribunc! in Bussa Ouerseas properties Liruited u. C.C 2OOl ( 137) ELT 637 (T).

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In the^tight of the aboue, responrlent No.2 is directed to adjuclicate urc Show Cqusc. Norice issued to the uit petiliorters bg fottouing the procedure contemplatetl bg Section 9D of the Act and the law laid down bg uaious

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' 11zoto; 1:+01 err o^z 1eaH1; '2007 (216) ELT 659 (SC)

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ludicial^{authorities in thisregard,including tlrc pinciplesof naturaljustice,in} the folLowtng manner:

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i) In the euent thqt the Reuenue intends to relA on anV oJ the statements, record.ed und.er Section 14 of the Act and reJerred to in the Shou C-ause Notices issued fo Ambika and Jag Ambey, it utould be incumbent on the Reuenue^to applg to Respondent No.2 to summon the makers oJ the said. statements,^so that the Reuenue would examine them in chtef before tlae adjudtcatirlg au*toitg, i.e., before respondent No.2.

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ii) A copy of the said record oJ examination-in-chief, bg the Revenue, of^the makers of ang of the statements on uhich tlrc Reuenue ch(irc.ses to relg, uould haue to be made available to the assessee, i.e., to Ambika and JaA Ambey in this case.

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iii) Statements recorded duing inuestigation, under Section 14 of^{tL@ Act,} whose makers are not examined tn chief before the adjudicating outlarity,^i.e., before Respondent No.2, would tnue to be eschewed Jrom euidence, and it tuould not be permissible for Respondent No.2 to relg on the said evidence tuhile adjudicating the matter. Neither, needless lo sa!/, twuld be open to the Reuenue to relg on the so.id statemetts to supporl the cose sougllt to be^made out in ttle Shotu Cause notice.

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iu) Once examination-in-chief, of the makers of tlle statements, on whom^the Reuenue seeks Io rely in adjudication proceedings, takes place, and a copg thereoJ is made auailabte to the assessee, it would be opet to ,he assessee lo seek permission ,o cross examine the persons LUho haue made the^said stateinents, should it choose to do so. In case ong such request is made bA the cssessee, it would be incumbent on the adjuclicating^quthoritA, i.e.,^on Respondent No.2 to allow the sqid request, as it is tnte and uell-settled ltosition^{in lau that statementsrecordedbehind the back oJ an ossesseecannot} be relied upon, in adjudication proceedings, utithout alloluing the assessee an opportunitg to test the scjd euidence bg cross-exantintng the makers of lhe said statements.

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If at all authoity is required. for this proposition, reference mag be made^to the decisions of the Hon'bte Supreme Court in Arya Abhuslwn Bhandar v- U.O.l.,2002 (143) ELT 25 (SC), Swadeshi Polgtex v. Vollector, 2000⁽¹²²⁾ DL'I 641 (SC)."

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If we look into the observations made by the High Court of Punjab & Haryana in the course of deciding the matter in ilI/s.Jlndal

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Dntgs case (3 supra), we find that the Hon'ble High Court h.ad prima facie^{taken intoconsiderationtheprinciplesofnatural} justice. Coming to the decision o[ Telstar Traoels Pritnte Llmited

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case (1 sul)ra) and one Division Bench of this Court in Manidhari Stainless lVtre Prtrnte Limited (2 supra), if we look into the facts of those cases, it would be clearly evident that they were entirely under differer-rt contextual backdrop, unlike the one in the present case. Moreover, u'hat has also to be seen in the instant case is that, on a query being put to the learned Senior Counsel as to what prejudice woulci be caused if *re Adjudicating Authority proceeds to decide the matter after cross-examining the witnesses sought to be cross-examined by the respondent/ assessee, he fairly concedes as such no preiudice would be caused except that the tactics adopted by the asse ssee are only with an intention of delaying the proceedings.

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7 . Anoth:r fact which needs to be considered is that the Tf ibt-rnal while remar:ding the matter back to the Adjudicating Authority had spccifically reserved the right of both the partics to raise the issue ol law and facts before the Adjudicating Authority anci who in i11111 will decide the rnatter afrcsh following the principles of natural justice, which by itsr:lf means that stand of the Department would still rernain protected and reserved to raise whatever objection and grounds that they intend to raise before this Court in the present appeal.

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Anotht:r fact which needs consideration is that whatever reasons on 'r.hich the Adjudicating Authority had refused to permit cross-examirLation of the witnesses, at the l-rrst instance, rvould still be available fol him to consider and thereafter to discard those

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statements if^he find^{those statementswhich has beenextracted in} the cross-examination^{not beingworthacceptingor appreciating'The} Adjudicating^{Authority has not in any manner got curtailed by the} order of remand^{made by the Tribunal'}

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g. Another fact^{whichcompelsthis Court not to ihterferewith the} impugned order^{is that the order of remand was made on 1B'03'2019} and today^{we are in September,2023,that is almost a gap of fourand} half years in^{betweenthe AdjudicatingAuthority itself and it would} not be proper^{and justihedat this juncture to interfere withthe} proceedings drawn^{by the Adjudicating Authorityafter so longer} period.

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10 In view thereof,^{the Appeatfails and is accordingly rejected'No} order as to costs.

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petitions pending,^{itanY, shall} ConsequentlY,^{miscellaneous}

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stand closed.

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Sd/. B.S.CHIRANJEEVI JOINT REGISTRAR

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//TRUE^COPY//

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SECTI N OFFICER

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To, l.ThecustomsExcise&ServiceTaxAppellateTribunal'RegionalBench,' i;ii6"i, nrtl-wsa euirdi; RLar portion' Khairthabad' Hvderabad' 2. The Commissioner^{of c"n"t"t f i' Rangareddy GST Commissionerate'} ' ;;ii;h;van, Tilak Road, Ramkote' Hvderabad ^. .. H:';tffiRl'e^{NARAVnNn REDDY' Advocate (oPUc)}

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