Cus - Principles of natural justice would also include a right to cross-examination: High Court
By TIOL News Service
MUMBAI, MAR 08, 2018: THE petitioners are seeking a writ in the nature of mandamus directing the Respondent Revenue to permit the petitioners to cross-examine 11 truck owners, whose statements are relied upon in the SCN alleging that the goods imported by the Company have not reached the factory of the petitioner.
Based on the investigation, the show cause notice alleges that the petitioner's company have habitually indulged in diversion of the imported goods, Imported duty free against Advance Authorization / Licences. And that in order to fulfill the export obligation they are showing fake clearance / deemed exports under CT-3 to M/s. Tara Holdings Ltd. (100% EOU), West Bengal. Customs duty demand is also made by enforcing the bonds along with proposal for confiscation of the impugned goods and imposition of penalty.
The SCN was replied to by seeking setting aside of the notice contending that there had been no diversion of imported exempted material and that confiscation and imposition of redemption fine cannot be ordered as the goods were not physically available for seizure.
When personal hearing was fixed, the petitioner expressed their inability to appear and sought to cross-examine the 11 vehicle owners since their statements were relied upon for issuance of the show cause notice.
The Assistant Commissioner of Customs on 14.09.2016 informed the decision of the Adjudicating Authority i.e. Commissioner of Customs (NSIV), JNCH, Nhava Sheva, that the request of the noticee for permission of cross-examination of persons indicated in their letter dated 15.1.2016 and reiterated in the letter dated 19.01.2016, is not supported by valid reasons. By placing reliance on the decisions in Kanungo & Co. - 2002-TIOL-252-SC-CUS-LB, Suman Silk Mills Pvt. Ltd. - 2014-TIOL-546-HC-AHM-IT, Jagdish Shanker Trivedi - 2005-TIOL-851-CESTAT-DELit is informed that it was not obligatory on the part of the adjudicating Authority to accede to such 'unreasonable'' demands.
This communication is assailed by the petitioner in the present petition.
After considering the exhaustive submissions made by both sides, the High Court extracted the provisions of sections 122, 122A, 123, 124 contained in Chapter XIV of the Customs Act, 1962 and observed thus -
+ What we find is that the principles of natural justice are implicitly engrafted in the said provision with a view to offer an opportunity to the owner of the goods to justify that the goods are not smuggled goods and they are not liable for confiscation or imposition of penalty.
+ It is no doubt true that right of cross-examination is vital and can be put to use to shake the credit of a party and the trustworthiness or veracity of his evidence. Though right of cross-examination is not an indefeasible right vested in a party, exercise of such right would depend on the facts of each case and would depend on the language used in the statute and also the scheme of an particular enactment and even if there is no specific provision in the statute, such right can be exercised or permitted to be exercised. The petitioner before us intends to cross-examine the truck owners whose statements have been heavily relied upon to arrive at a prima facie opinion on the basis of which a show cause notice under the Customs Act, 1962 came to be issued.
+ The said principles (of natural justice) which have been so recognized and evolved through the process of judicial interpretation are sacrosanct to the proceedings and any infraction of the said principles, invite an action of striking down the decision making process, being violative of principles of natural justice. This corollary and weightage attached to the principles of natural justice would also include a right to cross-examination and through various judicial pronouncements the said right has been evolved as part and parcel of the principles of natural justice.
+ Though we are conscious of the fact that right of cross-examination may not be construed as an indispensable right under the scheme of the Customs Act, we are of the view that the right of cross-examination is not infringeable rule.
+ However, there is no straightjacket formula in which the principles of natural justice can be confined and which principles of natural justice or which facets of it is applicable, would depend upon the nature of the lis and statute under which adjudication is undertaken and several other factors. Further every departure from principles of natural justice may not result in miscarriage of justice…
+ In these peculiar circumstances, in order to effectively defend itself, the petitioner is entitled to cross-examine the said transporters as that would offer the petitioner "a reasonable opportunity" as contemplated under section 124 (c) of the Customs Act, 1962.
Impugned order dated 14.09.2016 and the contents of the said communication declining the opportunity to cross-examine, as sought by the Petitioner, were quashed and set aside.
The High Court directed that the entire exercise of conducting the cross-examination should be completed within period of six weeks and thereafter the SCN be adjudicated.
The writ petition was allowed.
(See 2018-TIOL-397-HC-MUM-CUS)
