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Collector of Central Excise Vs. M. Nemichand Jain - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1985)(5)LC1940Tri(Chennai)
AppellantCollector of Central Excise
RespondentM. Nemichand Jain
Excerpt:
.....law after affording the respondent a reasonable opportunity in conformity with the principles of natural justice.3. the learned sdr submitted that a mahazar for recovery of ornaments prepared by an officer is entitled to credence in law and merely because the respondent herein wanted to avail himself of an opportunity to cross-examine a mahazar witness, it does not mean that an opportunity should be given to him. it was urged that even if the mahazar witnesses were to depose in favour of the respondent that would not detract from the credibility of a document like mahazar, particularly when it is prepared by an officer and attested by witnesses. he further submitted that the impugned order remitting the matter back to the original authority to afford the respondent an opportunity to.....
Judgment:
1. This is an appeal by the Collector of Central Excise, Madras, against the order of the Collector of Central Excise (Appeals), Madras, dated 10-7-84 in No. 77/84 (M) G.C., setting aside the order of the Deputy Collector of Central Excise (Gold), Madras, dated 2-3-84 in C.No. XVII/8/14/83 and remanding the appeal preferred before him by the respondent herein for fresh disposal by the original authority after affording the respondent a reasonable opportunity of being heard.

2. The respondent herein is a licensed pawn broker and the authorities visited the shop of the respondent on 26-8-83 and found a tin box containing new gold ornaments of 23 ct. purity, weighing 495.500 gms.

consisting of chains, thalis, ear-studs, rings etc. Since the above ornaments were not covered by any pawn tickets, voucher or bill, they were seized under mahazar as per law and the proceedings instituted against the respondent herein for contravention of Sections 6(2) and 27(1) of the Gold (Control) Act, 1968 resulted in the imposition of a fine of Rs. 19,000/- in lieu of confiscation of 495.500 gms. of new gold ornaments under Section 73, besides a penalty of Rs. 7,000/- on the appellant under Section 74 of the Act, which, on appeal, was set aside by the Collector (Appeals) by his order referred to supra and the matter was remitted back to the original authority for fresh adjudication as per law after affording the respondent a reasonable opportunity in conformity with the principles of natural justice.

3. The learned SDR submitted that a mahazar for recovery of ornaments prepared by an officer is entitled to credence in law and merely because the respondent herein wanted to avail himself of an opportunity to cross-examine a mahazar witness, it does not mean that an opportunity should be given to him. It was urged that even if the mahazar witnesses were to depose in favour of the respondent that would not detract from the credibility of a document like mahazar, particularly when it is prepared by an officer and attested by witnesses. He further submitted that the impugned order remitting the matter back to the original authority to afford the respondent an opportunity to cross-examine the mahazar witnesses would amount to stretching the principles of natural justice beyond acceptable legal limits ignoring the practical aspects. He also drew my attention to the ruling reported in AIR 1967 Calcutta 80 in the case of Kishanlal Agarwalla v. Collector of Land Customs and contended that the basic concept of natural justice doctrine is that no man should be condemned unheard and concept of natural justice does not require that there should be a formal cross-examination of witnesses and cross-examination being part of procedural justice and governed by rules of evidence, they are creation of courts and not part of natural justice as it is understood in jurisprudence. The learned SDR concluded that if the concept of natural justice is stretched beyond permissible limits and given a strained interpretation, it would become artificial justice and therefore the order of remand by the Collector (Appeals) is bad in law.

4. The learned counsel for the respondent submitted that having regard to the charge under Section 6(2) against the respondent, coupled with the plea of the respondent that the recovery was .from his house and not from the business premises, the mahazar would assume considerable importance. The mahazar being a contemporaneous document effected during seizure has been relied upon by the Department to substantiate the charge of contravention under Section 6(2) of the Act against the respondent and if the respondent were to establish that the seizure was from his house, the charge would automatically fail and in this view of the matter, cross-examination of the mahazar witnesses would be very vital for the respondent. When admittedly the respondent asked for cross-examination of the mahazar witnesses, denial of such a right to him would be clearly violative of the canons of natural justice vitiating the original order of adjudication. He also pressed into service a Division Bench ruling of the Orissa High Court, reported in 1981 E.L.T 217 (Ori.) in the case of Ram Klshan Agarwal v. Collector of Central Excise and Customs, Orissa, and contended that the ratio of the Bench ruling is clearly to the effect that if no opportunity to cross-examine the witnesses who effected the seizure is given, it would amount to violation of the principles of natural justice. It was further urged that mere furnishing of the copy of mahazar or statement on which reliance is placed by the Department without affording the respondent an oppontunity to challenge or assail the correctness of the same by way of cross-examination of the persons concerned would not meet the statutory requirements under law.

5. I have considered the submissions of the parties herein. At the outset I should mention that the main charge against the respondent, who is admittedly a pawn broker, is one under Section 6(2) of the Act for non-accountal of jewelleries under seizure. The main contention of the respondent is that the very seizure was from his residence and not from the business place and the question of accountal would not arise if the seizure was from the house. It is in this context the respondent wanted to avail himself of an opportunity to cross-examine the mahazar witnesses to substantiate his plea that the ornaments under seizure were from his residence and not from his business premises. When the Department has chosen so to place reliance on the mahazar in order to substantiate the charge under Section 6 (2) of the Act and when the respondent joined issue with the Department and wanted an opportunity to disprove the accusation against him, it is but proper and fair that the respondent should have been afforded an opportunity to cross-examine the mahazar witnesses. In certain circumstances, the mahazar may not have much importance and perhaps pale into insignificance when the party himself disowns the goods under seizure.

But in respect of a charge against a pawn broker under Section 6(2) for non-accountal, place of recovery is a very important factor and a mahazar, which is a contemporaneous document relied upon by the Department to prove the place of recovery as that of the respondent's business premises, would therefore assume considerable importance. In this context, as I have said earlier it is but fair that the respondent should have been afforded an opportunity to cross-examine the mahazar witnesses. If the Department does not choose to place any reliance on the mahazar, it would be a different matter. The Bench ruling relied upon by the learned SDR does not deal with a situation like the one in the present case, and therefore, the broad observations of the Calcutta High Court may not be relevant to the facts of the present case. The fundamental principle of affording a party an opportunity to cross-examine in a situation where reliance is placed against a person on certain document has been succinctly explained in the ruling relied upon by the learned counsel for the respondent and referred to supra.

Therefore, taking into consideration the background of this case, the nature of the charge against the respondent, the importance of the mahazar for bringing home such a charge, I feel that interests of justice require that the respondent should be afforded an opportunity of cross-examination. In this view of the matter, I am inclined to uphold the impuged order appealed against and dismiss the appeal.


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