ORDER
S. Kalyanam, Member (J)
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 .-
“It is unnecessary to say that the respondent will certainly give a reasonable opportunity to the petitioner to prove its case and that the petitioner would be entitled to cross-examine all those witnesses whose statements are sought to be relied on by the Department. Insofar as the production of the account books is concerned, it is certainly a matter to be decided by the respondent at this stage and this Court is not expressing any opinion now. If the account books are withheld and the petitioner is aggrieved on that score, it is open to the petitioner to challenge the final orders on that ground also.”
During the course of adjudication the appellants were asked to elect five persons for cross-examination, which the appellant did without prejudice to their rights and out of the five persons four supported the appellants in cross-examination and the one gave evidence against the appellants and during the course of cross-examination of the said persons the appellants repeatedly insisted on their being summoned with their account books for cross-examination and this plea of the appellants for summoning the said witnesses with their account books was negatived by the learned adjudicating authority on the ground that the Department did not place reliance on the account books of those persons summoned. In this context reference was made before us to the letter of the appellant dated 30-4-1988 requesting the Department to make the witnesses available for cross-examination with the following documents for the relevant period :
1. Day Book,
2. Ledger,
3. Stock Book,
4. Sale Bills and
5. Purchase Bills.
The request was reiterated again by a communication dated 6-9-1988 which reads as under:
“At the time of personal hearing on 5-8-1988, we cross-examined three of the Officers. The 8 dealers could not be cross-examined due to lack of time. Further, when it was pointed out to you that no effective cross-examinations can be done unless the account books are also made available at the time of cross-examination, you pointed out that no such request was made for summoning the dealers with their accounts. But we would like to point out that such request in fact was made in our letter dated 30-4-1988.
We received a letter dated 19-8-1988 in which we are asked to cross examine only 5 dealers and one officer on 13-9-1988 and request for summoning of Dealers account books has been rejected stating that the same are not relied upon in the Show-Cause-Notice.”
We were also shown the letter from the office of the Collector of Central Excise, Madras dated 9-9-1988 rejecting the appellants’ request and the letter reads as under:
“Your request for summoning all the dealers together with their account books has not been acceded to by the Collector. You are hereby informed that you can continue the cross examination with the 5 dealers and Shri M.S. Vedachalam, Superintendent.”
The rejection of the appellants’ plea for cross-examination of the witnesses with their account books is also referred to in para 41-42 of the impugned order of the Collector of Central Excise, Madras dated 13-2-1989. It was therefore, submitted that the impugned order is violative of the principles of natural justice.
3. Shri K.K. Bhatia, the learned S.D.R. submitted that if the opinion of the Tribunal is that reliance is placed on the statements recorded from third parties and that they should be allowed to be cross-examined with reference to their account books in conformity with the principles of natural justice, the matter may be remitted for reconsideration, particularly in the light of the observations of the High Court in the Writ proceedings.
4. 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.