Facts of the Case

This appeal, decided under the Central Excise Act, 1944, is not a GST matter. C.E.A. No.68 of 2019 was filed under Section 35G of the Central Excise Act, 1944 against a final order dated 18.03.2019 passed by CESTAT, Regional Bench, Hyderabad, arising out of an order-in-original dated 22.01.2018 passed by the Commissioner of Central Tax, Rangareddy GST Commissionerate (the show-cause proceedings themselves predate GST implementation issues and concern central excise/customs adjudication). By the impugned order, the Tribunal had remanded the matter back to the Adjudicating Authority to decide afresh on merits, after giving the party before it a fair opportunity to cross-examine witnesses whose statements had been relied upon. The appellant argued that the Tribunal had not properly examined certain precedents cited in support of the Adjudicating Authority's original refusal to allow cross-examination. The appeal was decided on 04.09.2023 (with the text of the order itself noting an earlier hearing date of 2023, per the digitised record).

Issues Involved

  1. Whether the Tribunal was right in remanding the matter to allow the assessee an opportunity to cross-examine witnesses whose statements were relied upon by the Adjudicating Authority.
  2. Whether the Adjudicating Authority's original refusal of cross-examination, and its reasons for that refusal, could be sustained.
  3. Whether, given the long lapse of time since the original proceedings, it was appropriate to interfere further with the remand.

Petitioner's Arguments

  • The Tribunal did not properly examine the Adjudicating Authority's specific reasons for refusing permission to cross-examine the witnesses, and it was within the Adjudicating Authority's prerogative to decide whether such cross-examination was warranted.
  • The impugned Tribunal order remanding the matter for cross-examination did not, therefore, warrant being upheld.

Respondent's Arguments

  • The order records that the Tribunal, in reaching its remand decision, had relied on a line of authority — including a Punjab & Haryana High Court decision applying the Supreme Court's ruling in C.C. v. Bussa Overseas Properties Limited — holding that adjudicating authorities are bound by general principles of evidence, which include affording an opportunity of cross-examination where relied-upon witness statements are challenged.

Court Order / Findings

  • The Telangana High Court found that the Tribunal's remand, directing the Adjudicating Authority to allow cross-examination and decide the show-cause notice afresh, was consistent with settled principles of evidence applicable to adjudication proceedings.
  • The Court noted that a considerable period had already elapsed since the matter was pending before the Adjudicating Authority, and held it would not be proper to interfere further with the proceedings at that stage.
  • The appeal was rejected, with no order as to costs; connected miscellaneous petitions were closed.

Important Clarification

This ruling reinforces that adjudicating authorities under central excise/customs law cannot rely on witness statements while denying the noticee a fair opportunity to cross-examine those witnesses — a principle equally relevant to adjudication proceedings under GST law, which similarly require adherence to natural justice and general rules of evidence.

Sections Involved

  • Central Excise Act, 1944 — Section 35G (appeal to High Court from CESTAT order)
  • General principles of evidence applicable to adjudicating authorities (cross-examination of witnesses relied upon in a show-cause notice)

Decision – In Favour of

Decided in favour of the Respondent/original noticee — the Revenue's appeal challenging the Tribunal's remand-for-cross-examination order was rejected.

Case Details

High Court for the State of Telangana at Hyderabad | C.E.A. No.68 of 2019 | Coram: Hon'ble Sri Justice P. Sam Koshy and Hon'ble Sri Justice Laxmi Narayana Alishetty | Date: 04.09.2023.

Link to Download the Order

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