Documents recovered and statement of employee recorded could be relied as evidence in the court, if the same is confirmed by Managing Director or whether the opportunity to cross examine the witness has to be given?

PJ/Case Laws/2011-12/1273

Case: - SHALINI STEELS PVT. LTD. Vs. COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, HYDERABAD

Citation: - 2011 (269) E.L.T. 485 (A.P.)

Issue:- Documents recovered and statement of employee recorded could be relied as evidence in the court, if the same is confirmed by Managing Director or whether the opportunity to cross examine the witness has to be given?

Brief Facts:- Appellant company, its Managing Director, one of its Directors and others were alleged to have been involved in clandestine production and clearance of its final product i.e., CTD bars, and it was alleged that they had suppressed receipt of raw materials i.e., M.S. Ingots. Search of the factory premises was conducted and documentary evidence was collected and statements of several persons were recorded.

The Commissioner passed an order confirming demand under Section 11-A (1) of the Central Excise Act. Penalty was also imposed under Section 11-AB of the Act. In additional, penalty was also imposed under Rule 26 of the Central Excise Rules, 2002.

In appeal before the Tribunal, it was noted that the document recovered from Sri Om Prakash Sharma which reflected a true account of the transaction in MS Ingots and CTD Bars which were clandestinely cleared by the appellant; the contents of the documents, recovered from Sri Om Prakash Sharma, and other employees of the Appellant company, were accepted by the Managing Director of the Appellant Company as being correct. It was held that the evidentiary value of these documents recovered from Sri Om Prakash Sharma was not produced for cross-examination by the appellant and it was noted that he was not a third party witness totally removed from the Transactions of the assessee. It was held that the appellant was a person and its executives and employees could not, appropriately, be labeled as third party witnesses. It was held that Commissioner had rightly relied on the documents recovered from Sri Om Prakash Sharma to find illicit removal of CTD bars on the intervening night of 25/26th September, 2003 and the demand of duty and imposition of equal amount of penalty under Section of 11-AC, was sustainable.

Aggrieved by the order of the Tribunal, the appellant have filed appeal before the High Court.

Appellant’s Contention:- Appellant contend that the Tribunal had erred in law in taking into account, as evidence, the unproved written matter said to have been recovered from Sri Om Prakash Sharma, even though he was not presented for cross examination and other than this statement, there was no supportive or corroborative evidence in support of the allegation levelled against the Appellant company. Appellant placed reliance on Sunder Ispat Limited v. Commissioner of Customs and Central Excise-2002 (141) E.L.T. 24 (A.P.H.C.D.B.); and Lakshman Export Limited v. Collector of Central Excise-2002 (143) E.L.T. 21 (S.C.).

Reasoning of Judgment:- The statement of Sri Om Prakash Sharma was relied upon by the Commissioner of Customs and Central Excise, in demanding payment of excise duty by, and in levying penalty on, the appellant. The statement of Sri Om Prakash Sharma, who was an employee of the Appellant company, was accepted to be true by none other than the managing Director of the Appellant company. It is evident, therefore, that no prejudice was caused to the appellant on their being denied the opportunity of cross-examination Sri Om Prakash Sharma when its Managing Director had himself accepted the said statement to be true. Even otherwise nothing prevented the Appellant Company, if they so chose, from producing Sri Om Prakash Sharma, as a witness in their defence and to examine him on their behalf. It is evident therefore , that this plea of denial of opportunity to cross-examine Sri Om Prakash Sharma is an afterthought, and was raised only to wriggle out of the demand of excise duty and the penalty levied on them.

Decision:- Appeal dismissed.

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PJ/Case Laws/2011-12/1273

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