Cus - one sided adjudications based upon allegations made in SCN needs to be avoided as same shakes public confidence in administration of justice - reference to number of personal hearings in sec 122A is after due adjudication process - Matter remanded: CESTAT
By TIOL News Service
NEW DELHI, NOV 25, 2013: THE disputed issue in the appeals is alleged over-valuation of consignments of carpets/floor coverings to be exported by appellants for which they filed shipping bills. The Revenue seized the same under the cover of panchnama in the presence of panch witnesses. They also sought expert opinion of Textile Committee, as also from Carpet Export Promotion Council and opinion of Committee of Cost Accountants. On the basis of the same, it was alleged that the appellants have overvalued their export products with malafide intention to claim higher drawback and gain benefit of excess exports.
Accordingly, SCN was issued.
The appellants filed an interim reply on 23/05/2012 and requested for cross examination of panch witnesses, customs officers and experts upon whose opinion, Revenue has relied upon.
Personal Hearing was fixed on 09/07/2012 which was adjourned by department on account of administrative exigencies to 09/08/2012.
Now, appellant sought an adjournment and a fresh date was fixed on 16/08/2012.
On this date, the Advocate for the appellant appeared and drew attention of the adjudicating authority to their request of cross-examination.
Matter was adjourned to 22/08/2012 with a direction that the request for cross examination would be considered on 22/08/2012.
On the evening of 21/08/2012, the appellant received a fax message informing that their request for cross examination has been allowed by the adjudicating authority.
Since the Advocate was busy before the Tribunal, another Advocate, who is attached with appellants' advocate caused appearance before adjudicating authority on the said date i.e.22/08/2012 and explained that as they have received intimation for cross examination only in the evening of 21/08/2012 it is not possible to conduct cross examination on 22/08/2012 and another date be fixed.
The Commissioner, however, in his order held that on 22/08/2012 the hearing was fixed for cross examination and departmental officers appeared on that date so as to tender for cross examination. Inasmuch as the appellants did not appear to conduct cross examination on 22/08/2012, he proceeded to decide the issue on the basis of interim reply.
Before the CESTAT, the appellant submitted that the Commissioner had violated the basic principles of natural justice.
The Member (Judicial) observed -
+ In any case, we find that even on 22.8.2012 the customs officers were tendered for cross examination and there was no reference of panch witnesses.
+ One day prior notice for conducting cross examination cannot be held to be a sufficient notice to the advocate as also to the party who were located in Amritsar.
+ He is under legal obligation to fix the date of personal hearing subsequent to the conclusion of cross examination.
+ The Commissioner's observation that the provisions of section 122A mandate fixing of only 3 personal hearings cannot be appreciated. Inasmuch as reference to these personal hearings in the said section is after due adjudication process i.e. filing of reply, request for cross examination and cross examination etc. are over.
+ Cross examination of the witnesses may require much more than 3 personal hearings and the Commissioner's reference to the provisions of the said section for justifying his passing of the impugned order without any further hearing cannot be appreciated.
+ It is cardinal principle of law that nobody should be condemned without hearing and affording the accused person a reasonable opportunity to put forth his defence. In the absence of any defence reply by the accused persons, it is not only difficult but impossible for any adjudicating authority to come to a fair and just finding. His conclusions are bound to be guided by the allegations made in the show cause notice, as admittedly there would not be any rebuttal to the same by the concerned persons.
+ Such type of one sided adjudications based upon the allegations made in the show cause notice needs to be avoided as the same shakes the public confidence in the administration of justice.
Holding that the order has been passed in gross violation of principles of natural justice, without expressing any opinion on the merits of the case, the Bench deemed it fit to set aside the same and remand the matter to the Commissioner for de novo adjudication.
Incidentally, the Member (T) while agreeing with the order of the Member (J) as above, added the following -
"In view of the substantive evidence available on records which shall be thoroughly examined by original authority following the due process of law. When interest of Revenue is prejudiced, appellant shall not be entitled to refund of amount of Rs.1.50 crore deposited prior to this remand order as protection measure of Revenue."
The Stay petitions and appeals were disposed of accordingly.
(See 2013-TIOL-1752-CESTAT-DEL)
