GARG FASTENERS Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THE abovementioned Stay Petitions arise out of two common orders dated 2-11-1988 and 3-11-1988 passed by the Additional Collector of Central Excise, Madras and another dated 13-2-1989 passed by the Collector of Central Excise, Madras and the connected appeals have a common issue for determination. Since we propose to dispose of the appeals themselves today on a short question of law, we grant waiver of pre-deposit of the duty and penalty levied, pending disposal of the appeals to-day.

(2.) Proceedings were instituted against the appellants herein on a charge that the appellants manufactured and cleared Bolt and Nuts without payment of excise duty and excisable goods were also cleared without raising invoices in considerable quantities and goods excisable namely Bolts and Nuts were cleared as rivets & the proceedings eventually resulted in the impugned orders referred to supra. During the course of investigation the Department recorded statements from a number of dealers who had purchased the goods from the appellants and sought to place reliance on them. The appellants herein wanted to cross-examine the various persons on whose statements the Department chose to place reliance and in this context the appellants also moved the High Court of Madras in Writ Petition Nos. 10112/88 and 11093/88 and another Writ Petition and the High Court in disposing of the Writ Petitions observed as under .-

(3.) WE have carefully considered the submissions made before us. It is an axiomatic proposition of law and a cardinal facet of principles of natural justice that if reliance is sought to be placed on the statement recorded against a person behind his back, the aggrieved person is entitled to exercise his right of cross-examining the said person to challenge the veracity of the statement made against him. In the present case we note that the crucial question for consideration would be as to whether the various dealers actually purchased Bolts and Nuts or rivets from the appellants and apart from the statements, this could be better substantiated only with reference to the account books kept by the various dealers in the regular course of their business because it would not be possible for any person to recall and speak from memory as to what were the goods he actally purchased serveral years earlier from a particular manufacturer. In this context one should also take note of the statements of some of the dealers who stated that they were only dealing in Bolts and Nuts and not rivets. In these circumstances, when all the dealers are assessees under the Sales Tax Act and are in possession of account books maintained hi the course of regular business transactions in the interests of justice, it would be worthwhile to summon those persons with their account books for purpose of giving evidence so that the veracity of their statements could be tested and ascertained with reference to the same. Therefore, in the factual background of this case, we are inclined to think that the request of the appellants for cross-examination of the persons with reference to their account books would appear to be quite reasonable and in conformity with the principles of natural justice. Therefore, in this view of the matter, without expressing any opinion on the merits of the issue, on a technical ground that the impugned order is violative of the principles of natural justice, for the reasons set out above, we set aside the impugned orders appealed against and remit the appeals for reconsideration by the adjudicating authority in the light of our observations above and in accordance with law after affording the appellants herein a reasonable opportunity of being heard in the matter.