Telangana High Court
Commissioner Of Customs vs M/S. Venkateswara Silk Mills on 22 October, 2024
*THE HON'BLE SRI JUSTICE SUJOY PAUL
AND
*THE HON'BLE SRI JUSTICE NAMAVARAPU
RAJESHWAR RAO
+CENTRAL EXCISE APPEAL No.148 of 2006
% 22-10-2024
#Commissioner of Customs and Central Excise, Hyderabad-IV.
...Appellant
vs.
$M/s. Venkateswara Silk Mills.
... Respondent
!Counsel for the Appellant: Sri A. Rama Krishna Reddy.
^Counsel for Respondent: Sri B. Chandrasen Reddy, Senior Counsel.
Head Note :
? Cases referred
1. (2011) 12 SCC 243
2. (1974) 2 SCC 544
3. (1997) 1 SCC 508
4. 2016 SCC OnLine P&H 5038
5. 2017 SCC OnLine Bom 8811
6. 2021 SCC OnLine Bom 13137
7. 2022 SCC OnLine Jhar 165
8. (2018) 362 ELT 961 (Chattisgarh)
9. AIR 1963 SC 375
10. 1961 SCC OnLine Bombay 5
11. (2013) 3 SCC 801
2
SP, J & RRN, J
CEA_148_2006
IN THE HIGH COURT FOR THE STATE OF TELANGANA
HYDERABAD
****
CENTRAL EXCISE APPEAL No.148 of 2006
(Per Hon'ble Sri Justice Sujoy Paul)
Between:
Commissioner of Customs and Central Excise, Hyderabad-IV.
...Appellant
vs.
M/s. Venkateswara Silk Mills.
... Respondent
JUDGMENT PRONOUNCED ON: 22.10.2024
THE HON'BLE SRI JUSTICE SUJOY PAUL
THE HON'BLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO
1. Whether Reporters of Local newspapers
may be allowed to see the Judgments? :
2. Whether the copies of judgment may be
Marked to Law Reporters/Journals? :
3. Whether His Lordship wishes to
see the fair copy of the Judgment? :
___________________
SUJOY PAUL, J
_____________________________________
NAMAVARAPU RAJESHWAR RAO, J
3
SP, J & RRN, J
CEA_148_2006
THE HONOURABLE SRI JUSTICE SUJOY PAUL
AND
THE HONOURABLE SRI JUSTICE NAMAVARAPU
RAJESHWAR RAO
CENTRAL EXCISE APPEAL No.148 of 2006
JUDGMENT (Oral): (Per Hon'ble Justice Sujoy Paul)
This appeal filed under Section 35 (G) of the Central Excise
Act, 1944 (for short ‘Excise Act’) against order of reversal passed
by CESTAT on 20.12.2005 was admitted on the following
substantial questions of law:
“1. Whether the CESTAT is justified in setting aside the
demands of duty confirmed and the penalties imposed by the
adjudicating authority by passing a well reasoned order
wherein the facts of the case and the circumstantial evidence
are clearly brought out and the evasion of duty is clearly
established beyond doubt? and more so whether the Tribunal
can ignore binding admissions made by the managing partner
of the respondent firm and its sole distributors and various
other traders?
2. Whether the appellant herein is still obligated to prove the
clandestine manufacture and clearance of excisable goods
when the Managing Partner of the respondent firm and its sole
distributors and various other traders admitted the facts and
more so admitted facts need not be proved?”
FACTUAL BACKGROUND AND REVENUE’S STAND:
2. Sri A. Rama Krishna Reddy, learned counsel for the
appellant submits that a search took place in the premises of
respondent firm on 29.08.1996. The firm was found to be
indulging in clandestine transfer of finished goods without paying
excise duty through its sister concerns namely M/s. Geetha
4
SP, J & RRN, J
CEA_148_2006Synthetics and M/s. Shakthi Traders. The search was conducted
in the presence of two witnesses and recovered certain goods and
lastly, ‘punchanama’ dated 29.08.1996 was prepared. The man
made material (MMF) and raw material i.e., grey fabric were found
in excess for the stock reflected in statutory records and excess
stock was seized. The ‘punchanama’ was drafted and named as
GS/55/70.
3. The case of the revenue was that during the course of search
the sister concerns received goods without raising central excise
invoices. Sri Narendra Kumar Goel is the Managing Partner of
M/s. Venkateshwara Silk Mills, Sri Mahendra Kumar Goel and Sri
Dharmendra Kumar Goel, who are brothers were Managing
Partners running sister concerns M/s.Geetha Synthetics and M/s.
Shakthi Traders respectively.
4. Sri Rama Krishna Reddy, learned counsel for the revenue
submitted that the modus operandi of respondent is clear from the
statements of Sri Ramakrishna Rao, Manager of respondent and
Sri Srinivasa Rao, Accountant-in-charge of M/s. Geetha
Synthetics and Sri Babulal, Accountant of M/s. Shakthi Traders
that they receive the goods only from respondent without central
excise invoices and turnover with and without the cover of
5
SP, J & RRN, J
CEA_148_2006
invoices was 50:50 % on their average monthly turnover of
Rs.10,00,000/- that the goods received with proper bills were sold
under printed cash/credit bills and such sales were properly
accounted for in records and goods received without central excise
documents were sold without using printed bill books and used
for the bill books. For these sales, note pad books having folios in
triplicate with printed serial numbers were used. He further
explained that on preparing three folios note pad book at the time
of sales of unaccounted goods, the originals were handed over to
the party and remaining two will be retained by them at the time
of receiving the payment, which was strictly in cash, the original
was taken back and the cash along with triplicate sent to Sri
Mahendra Kumar Agarwal, the proprietor of M/s. Geetha
Synthetics or to Sri Narendra Kumar Goel, according to their
availability, generally the bills will be destroyed by party on
making payment and or by receiving the same and those
transactions were not reflected in any of the account.
5. The appellant in support of its case examined the brothers of
the Managing Partner, accountants of firms and purchasers and
distributors and recorded their statements and incorporated in
GS/55/70. It is jointly urged that GS/55/70 is crucial
6
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CEA_148_2006
file/document wherein all the real incriminating material was
prepared and kept in single file namely GS/55/70.
6. Learned counsel for the revenue further submits that the
learned Commissioner passed a detailed order after marshalling
the entire evidence on 25.09.2001, which is running nearly in 219
pages. The said findings are based on the evidence of 12
witnesses and such findings of fact which are based on correct
appreciation of evidence should not have been disturbed by
CESTAT by the impugned order dated 20.12.2005.
7. The stand of the revenue is that Section 9D (2) of the Excise
Act is not applicable. The learned Tribunal has not given cogent
reasons why the findings of the Commissioner cannot sustain
judicial scrutiny despite the fact that it is founded upon the
statement of 12 witnesses. If they were not produced during the
adjudication proceedings and were not permitted to be cross
examined by the respondent, it will not cause any dent on the
case of the revenue. Heavy emphasis is laid on the word
‘prosecution’ employed in Section 9D of the Excise Act. It is
submitted that said provision is applicable in cases of
‘prosecution’ and necessity to cross-examine can be pressed into
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SP, J & RRN, J
CEA_148_2006
service only when the case reached to the stage of ‘prosecution’
and not for adjudicating proceedings.
8. Sri Rama Krishna Reddy by placing reliance on the judgment
of Supreme Court in the case of Commissioner of Central
Excise, Mumbai v. Kalvert Foods India Private Limited 1
submits that a plain reading of this judgment will show that the
facts of that case are almost similar to the case in hand. The
clandestine manner which was adopted in the case before the
Supreme Court is almost similar to present case if modus operandi
of both the cases are examined in juxtaposition. Secondly,
reliance is placed on the judgment of Collector of Customs,
Madras v. D. Bhoormall 2, to bolster the submissions that burden
in a case of this nature to show innocence was on the respondent.
The reliance is lastly placed on the judgment of Supreme Court in
the case of Surjeet Singh Chhabra vs. Union of India 3, to submit
that in a case where there exists a clear ‘confession’ the
production of witness and cross-examination was not necessary.
9. In addition, Sri Rama Krishna Reddy, learned counsel for the
appellant submits that Sri Babulal is a crucial witness. Although,
he was not produced as witness before adjudicating authority and
1
(2011) 12 SCC 243
2
(1974) 2 SCC 544
3
(1997) 1 SCC 508
8
SP, J & RRN, J
CEA_148_2006
was not subjected to cross-examination, the relevant document of
his deposition from the file was sent to Government Examiner for
questioned documents. The said authority opined that the
signature on the document in question is indeed of Babulal.
Thus, if Babulal was not produced for cross-examination, it will
make no difference or cause prejudice to the other side.
Stand of Respondent:
10. Sri B. Chandrasen Reddy, learned Senior Counsel for the
respondent supported the order impugned and urged that Section
9D of the Excise Act will be applicable whether or not it is a case
relating to prosecution. If any incriminating material is sought to
be used against the appellant, appellant as per principles of
natural justice deserves an effective opportunity to rebut the same
and cross-examine the witnesses. By placing reliance on the
judgment of Punjab and Haryana High Court in G-Tech
Industries v. Union of India 4, it is submitted that clause (b) of
Section 9D (1) would be applicable. The Punjab and Haryana
High Court in clear terms held that if the person whose statement
is recorded before the Gazetted Central Excise Officer is not
produced before the adjudicating authority and he was not
4
2016 SCC OnLine P&H 5038
9
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CEA_148_2006
subjected to cross examination, such statement has to be
eschewed from consideration.
11. The Division Bench judgment of Bombay High Court in
Ciabro Alemao v. Commissioner of Customs 5 was referred to
submit that almost a similar substantial question cropped up for
consideration i.e., whether in the teeth of Section 138B of the
Customs Act, 1962 (for short ‘Customs Act’), which is pari materia
provision, in departmental adjudication the witness is required to
be produced. It is submitted that the Division Bench clearly held
that without producing such witnesses in the adjudication
proceedings and without subjecting them to cross-examination,
those statements cannot be used against the assessee. It is
further highlighted that there is no unconditional, unequivocal,
admission or confession on the part of the Managing Partner. The
reliance is placed on paragraph S 5.1 of the order of adjudicating
authority wherein he opined that the Sri Narendra Kumar Goel,
Managing Partner of VSM has not admitted or ‘confessed’
anything.
12. Learned Senior Counsel for the respondent placed reliance
on another judgment of Bombay High Court in the case of
5
2017 SCC OnLine Bom 8811
10
SP, J & RRN, J
CEA_148_2006
Prakash Raghunath Autade v. Union of India 6, wherein Section
9D of the Excise Act was considered and it was held that during
adjudication proceedings, the relevant witnesses needs to be
summoned and in absence thereof, such statements shall not be
relied upon against the assessee unless he has been given suitable
and reasonable opportunity to cross-examine such witnesses.
13. Furtherance, learned Senior Counsel for the respondent
placed reliance on the statement of N.K.Prasada, Assistant
Commissioner of Central Excise. The adjudicating authority in
paragraph No.65 recorded that during cross-examination, Sri N.K.
Prasada, in response to the specific question stated that document
GS/55/70, did not carry the signatures of ‘panch’ witnesses, did
not indicate the period for which it is related and did not indicate
whether the particulars mentioned therein represented Rupees or
linear meters. It was not possible on seeing the said document to
conclude that it was prepared by Babulal.
14. In this view of the matter, even otherwise, the statement of
Babulal is not trustworthy and cannot form basis of the impugned
action and order.
6
2021 SCC OnLine Bom 13137
11
SP, J & RRN, J
CEA_148_2006
15. The parties confined their arguments to the extent indicated
above. We have bestowed our anxious consideration on rival
contentions of the parties and perused the record.
FINDINGS:-
16. Before dealing with rival contentions, it is apposite to
reproduce Section 9D of the Excise Act, which reads as under:
9D. Relevancy of statements under certain
circumstances.– (1) A statement made and signed
by a person before any Central Excise Officer of a
gazetted rank during the course of any inquiry or
proceeding under this Act shall be relevant, for the
purpose of proving, in any prosecution for an offence
under this Act, the truth of the facts which it
contains,–
(a) when the person who made the statement is dead
or cannot be found, or is incapable of giving evidence,
or is kept out of the way by the adverse party, or
whose presence cannot be obtained without an
amount of delay or expense which, under the
circumstances of the case, the Court considers
unreasonable; or
(b) when the person who made the statement is
examined as a witness in the case before the
Court and the Court is of opinion that, having
regard to the circumstances of the case, the
statement should be admitted in evidence in the
interests of justice.
(2) The provisions of sub-section (1) shall, so far as
may be, apply in relation to any proceeding under
this Act, other than a proceeding before a Court, as
they apply in relation to a proceeding before a Court.
(Emphasis Supplied)
17. So far Section 9D (1) (a) of the Excise Act is concerned, it has
no application in the instant case. Sub-section (1) (a) can be
12
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CEA_148_2006
pressed into service (a) when person who had given the statement
is dead, (b) when he cannot be found, (c) when he is incapable of
giving evidence, (d) when he is kept out of the way by the adverse
party and (e) when his presence cannot be secured without an
amount of delay or expense, which officer considers unreasonable.
In the considered opinion of this Court, this provision is based on
doctrine of necessity. Admittedly, in the instant case, sub-section
1 (a) of Section 9D of the Excise Act has no application.
18. This case revolves around the interpretation and application
of Section 9D (1) (b) of the Excise Act. It is pertinent to remember
that learned counsel for the appellant 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 argument at the threshold appears to be
attractive but lost much of its shine when examined minutely with
the aid of various judgments. The Punjab and Haryana High
Court in G-Tech Industries (supra) held as under:
“19. Clearly, if this procedure, which is statutorily
prescribed by plenary Parliamentary legislation, is
not followed, it has to be regarded, that the Revenue
has given up the said witnesses, so that the reliance
by the Commissioner of Central Excise, on the said
statements, has to be regarded as misguided, and the
said statements have to be eschewed from
consideration, as they would not be relevant for
proving the truth of the contents thereof.
13
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CEA_148_2006
21. That adjudicating authorities are bound by the
general principles of evidence, stands affirmed in the
judgment of the Supreme Court in Commissioner of
Customs v. Bussa Overseas Properties Ltd., (2007)
216 ELT 659 (SC), which upheld the decision of the
Tribunal in Bussa Overseas Properties Ltd. v.
Commissioner of Customs 2001 (137) ELT 637
(Trib._Mum)).
22. It is clear, from a reading of the Order-in-original
dated 04.04.2016 supra, that Respondents No.2 has,
in the said Orders-in-Original, placed extensive
reliance on the statements, recorded during
investigation under Section 14 of the Act. He has not
invoked clause (a) of sub-section (1) of Section 9D of
the Act, by holding that attendance of the makers of
the said statements could not be obtained for any of
the reasons contemplated by the said clause. That
being so, it was not open to Respondent No.2 to rely
on the said statements, without following the
mandatory procedure contemplated by clause (b) of
the said sub-section. The Orders-in-Original, dated
04.04.2016, having been passed in blatant violation
of the mandatory procedure prescribed by Section
9D of the Act, it has to be held that said Orders-in-
Original stand vitiated thereby.”
(Emphasis Supplied)
19. The Division Bench of Jharkhand High Court in Bihar
Foundry & Casting Ltd., v. CCE 7 opined as under:
” The person summoned is bound to state the truth
as there is a threat of prosecution since such enquiry
is deemed to be a “judicial proceeding” within the
meaning of Section 193 and 228 of the Penal Code,
1860. However, such statements recorded before a
Gazetted Central Excise Officer during inquiry or
investigation would be relevant only after the
statement is admitted in evidence in accordance with
the procedure prescribed under Section 9D (1)(b). The
rigors of this procedure is exempted only in case in
which one or more of the handicaps referred to in
clause (a) of Section 9D (1) would apply. The
7
2022 SCC OnLine Jhar 165
14
SP, J & RRN, J
CEA_148_2006proceedings for recording of the statements
during search and seizure operation under C.E.A.
1944 are quasi criminal in nature because it
results in imposition of not only duty but also a
penalty and in some cases, it may also lead to
prosecution. Therefore the statement recorded before
a Gazetted Central Excise officer during inquiry or
investigation, would be relevant only after the
statement is admitted in evidence in accordance with
the procedure prescribed under Clause (b) of Section
9D(1). The rationale behind the precaution contained
in Section 9D (1) (b) is obvious as the statement
recorded during inquiry/investigation by the Gazetted
Central Excise Officer has every chance of having
been recorded under coercion or compulsion.
Therefore, the provisions contained in Section 9D
have to be construed strictly and held as mandatory
and, non-compliance would result in rendering the
statement as irrelevant piece of evidence that cannot
be used by the Adjudicating Authority to arrive at its
finding. (See: Flevel International v. Commissioner
of Central Excise, [(2016) 332 ELT 416 (Del.) Para
40-46); Jindal Drugs Pvt. Ltd. v. Union of India,
[(2016) 340 ELT 67 (P & H), para 9 to 25]; High Tech
Abrasives Ltd. v. Commissioner of C. Ex. & Cus,
Raipur, [(2018) 362 ELT 961 (Chhattisgarh) Para 9.3-
9.5 and Ambika International v. Union of India,
[(2018) 361 ELT 90 (P & H) Para 17 to 28]. Para 23,
24, 25 and 27 thereof.”
(Emphasis Supplied)
20. The Chhattisgarh High Court in High Tech Abrasives Ltd.,
v. Commissioner of C.Ex.&Cus., Raipur 8 held as under:
“A rational, logical and fair interpretation of procedure
clearly spells out that before the statement is treated
relevant and admissible under the law, the person is not
only required to be present in the proceedings before the
adjudicating authority but the adjudicating authority is
obliged under the law to examine him and form an
opinion that having regard to the circumstances of the
case, the statement should be admitted in evidence in the
interest of justice. Therefore, we would say that even8
(2018) 362 ELT 961 (Chattisgarh)
15
SP, J & RRN, J
CEA_148_2006mere recording of statement is not enough but it has to
be fully conscious application of mind by the adjudicating
authority that the statement is required to be admitted in
the interest of justice. The rigor of this provision,
therefore, could not be done away with by the
adjudicating authority, if at all, it was inclined to take
into consideration the statement recorded earlier during
investigation by the Investigation officers. Indeed, without
examination of the person as required under Section 9D
and opinion formed as mandated under the law, the
statement recorded by the Investigation Officer would not
constitute the relevant and admissible evidence/material
at all and has to be ignored. We have no hesitation to
hold that the adjudicating officer as well as Customs,
Excise and Service Tax Appellate Tribunal committed
illegality in placing reliance upon the statement of
Director Narayan Prasad Tekriwal which was recorded
during investigation when his examination before the
adjudicating authority in the proceedings instituted upon
show cause notice was not recorded nor formation of an
opinion that it requires to be admitted in the interest of
justice.”
(Emphasis Supplied)
21. A conjoint reading of these judgments, more particularly, the
judgment of Jharkhand High Court in Bihar Foundry & Casting
Ltd’s (supra) makes it clear that 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’. We are in respectful agreement with the view
taken by Division Bench of Jharkhand High Court in Bihar
Foundry & Casting Ltd. (supra). Thus, we are unable to persuade
ourselves with the line of argument of revenue that because of use
16
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CEA_148_2006
of the word ‘prosecution’ in Section 9D of the Excise Act, the
requirement of producing evidence in adjudication proceeding can
be done away with.
22. The Bombay High Court in Ciabro Alemao (supra) has
framed question which reads thus:
“(b) Could the Tribunal legitimately have relied on Section
138B of the Customs Act and applied to it departmental
adjudication proceedings when the section specifically and
clearly applies only to prosecution for offences under the
Customs Act?”
23. It was rightly highlighted that Section 138(B) of the Customs
Act is almost analogous to Section 9(D) of the Excise Act. Section
138(B) reads as under:
138B. Relevancy of statements under certain
circumstances.–
“(1) A statement made and signed by a person before any
gazetted officer of customs during the course of any
inquiry or proceeding under this Act shall be relevant, for
the purpose of proving, in any prosecution for an offence
under this Act, the truth of the facts which it contains,–
(a) when the person who made the statement is dead or
cannot be found, or is incapable of giving evidence, or is
kept out of the way by the adverse party, or whose
presence cannot be obtained without an amount of delay
or expense which, under the circumstances of the case,
the court considers unreasonable; or 1. Subs. by Act 36 of
1973, s. 8, for ―under clause (i) of section 135‖ (w.e.f. 1-9-
1973). 2. Ins. by s. 9, ibid. (w.e.f. 1-9-1973). 106 (b) when
the person who made the statement is examined as a
witness in the case before the court and the court is of
opinion that, having regard to the circumstances of the
case, the statement should be admitted in evidence in the
interests of justice. (2) The provisions of sub-section (1)
shall, so far as may be, apply in relation to any proceeding
17
SP, J & RRN, J
CEA_148_2006under this Act, other than a proceeding before a court, as
they apply in relation to a proceeding before a court.]”
24. After considering this provision, the findings are recorded in
para No.44, which reads thus:
“..material witnesses not produced for cross-examination,
through asked for, amounts to a clear breach of natural
justice. In Union of India v. TR Varma {(1958) 1 SCR
499} the Court held:
” it may be observed that rules of natural justice require
that a party should have the opportunity of adducing all
relevant evidence on which he relies, that the evidence
of the opponent should be taken in his presence,
and that he should be given the opportunity of
cross-examining the witnesses examined by that
party, and that no materials should be relied on against
him without his being given an opportunity of
explaining them.”
(Emphasis Supplied)
25. In para Nos.57 and 58 of above judgment in clear terms, it
was held that Section 138(B) of the Customs Act applies to
‘prosecution’ as well as ‘departmental adjudication proceedings’.
26. Justice Dipankar Datta (as His Lordship then was) speaking
for the Division bench in case of Prakash Raghunath Autade
(supra) while considering Section 9D of the Excise Act poignantly
held:
“13. In such view of the matter, we dispose of this writ
petition with the following order:
(a) to (c)…
(d) if in the course of adjudication proceedings before the
relevant authority any witness is summoned in terms of
the power conferred by section 14 of the Act and his
statement is recorded and found relevant, such
18
SP, J & RRN, J
CEA_148_2006statement shall not be relied upon against the
petitioner unless he has been given suitable and
reasonable opportunity to cross examine such
witness;
(e) the evidence of the witness, as above, shall be
recorded in the presence of the petitioner; and
(f) based on the evidence and other materials on record,
the relevant authority shall proceed to pass a final order
in accordance with law.”
(Emphasis Supplied)
27. Apart from this, in State of Mysore v. S.S.Makapur 9, the
Apex Court (Constitution Bench) ruled that the purpose of an
examination in the presence of a party against whom an enquiry is
made, is sufficiently achieved, when a witness who has given a
prior statement is recalled, the statement is put to him, and made
known to the opposite party, and the witness is tendered for
cross-examination by that party.
28. In the light of aforesaid judgments, it is clear like noon day
that 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.
29. The judgment of Kalvert Foods India Private Limited
(supra) on which heavy reliance is placed by learned Standing
9
AIR 1963 SC 375
19
SP, J & RRN, J
CEA_148_2006
Counsel for the appellant is of no assistance for twin reasons:- i)
in the said judgment, there is no discussion or analysis in the
light of Section 9D of the Excise Act. ii) para No.25 of the said
judgment shows that the Managing Director voluntarily came
forward to sort out the issue and paid excise duty to the tune of
Rs.11.00 lakhs on different dates. The said act of Managing
Director was treated to be of ‘confessional act/statement’. There
is no similar situation present in the instant matter. The facts of
case cannot be a binding precedent. What is binding precedent is
the ratio decidendi of a matter (see Ram Prasad Sarma v. Mani
Kumar Subba {2003 (1) SCC 289}, Rekha Mukherjee v. Ashis
Kumar Das {2005 (3) SCC 427}, Jayant Verma v. Union of India
{2018 (4) SCC 743} and Shanti Bhushan v. Supreme Court of
India {2018 (8) SCC 396}). A peculiar different fact or a different
legal provision may make a world of difference. (See Bhavanagar
University v. Pallitana Sugar Mills Pvt Ltd {2003 (2) SCC 111}).
As rightly highlighted by respondent the so called confession
statement of Babulal does not inspire confidence. The
adjudicating authority himself found the discrepancy, which was
rightly highlighted by learned counsel for the respondent. For
same reason, the statement of Managing Partner cannot be
20
SP, J & RRN, J
CEA_148_2006
treated as ‘confessional’ statement. Para S.5.1 of order of
adjudicating authority is self explanatory.
30. So far the question of tallying the signature of Babulal based
on the report of Government Examiner for questioned document is
concerned, even if it is found to be correct, the said report only
proves the signature of Babulal on the document and not the
contents thereof. The Bombay High Court, way back in Sir
Mohammed Yusuf v. D 10, opined that the proof of signature on a
document does not mean that the contents are also true. The
Supreme Court in Joseph John Peter Sandy v. Veronica
Thomas Rajkumar 11 opined as under:
“In view of the law referred to hereinabove, it is crystal
clear that even though the document may be admissible,
still its contents have to be proved and in the instant
case, as the appellant did not examine either the
attesting witnesses of the document, nor proved its
contents, no fault can be found with the judgment [(2004)
1 MLJ 301] impugned before us.”
(Emphasis Supplied)
31. In this view of the matter, it can be safely concluded that
even if the signature of Babu Lal was tallied pursuant to the
report of Government examiner that will not establish that
contents of the statement are also proved. The other judgment
cited by learned Standing Counsel for the appellant in the case of
10
1961 SCC OnLine Bombay 5
11
(2013) 3 SCC 801
21
SP, J & RRN, J
CEA_148_2006
D. Bhoormall (supra) cannot be pressed into service in a case of
this nature. The said case is founded upon totally different facts
and different statute.
32. In view of foregoing discussion, substantial questions must
be answered in favour of the respondent. We answer it
accordingly and hold that in the teeth of Section 9D (1) (b) of the
Excise Act, unless, the incriminating material and witnesses are
produced in the adjudication proceedings and are permitted to be
cross-examined by the assessee, the said incriminating material
cannot be used against the assessee. Thus, Appeal fails and is
hereby dismissed. There shall be no order as to costs.
Interlocutory applications, if any pending, shall stand closed.
_______________________
JUSTICE SUJOY PAUL
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JUSTICE NAMAVARAPU RAJESHWAR RAO
Date: 22.10.2024
Note:
L.R. copy be marked.
B/o.GVR/MYK/NVL