2013 (11) TMI 1232 - AT - Customs

Non examination of witness - Violation of principle of natural justice - Held that - no reason to justify rejection of request made by the appellant to the adjudicating authority in light of section 138B of the Act, to summon witnesses for examination and to offer them for cross-examination if their statements were to be considered as relevant and admitted in evidence in the interest of justice - The appeals are therefore allowed with direction to the Respondent adjudicating authority to follow section 138B and to forthwith summon the witnesses for examination under intimation to the appellant, and to offer them for cross-examination by the appellant if their statements are to be considered as relevant and admitted in evidence in the interest of justice. The appellant is also entitled for Cross-examination of the Chief Chemist (EC), DGH. The Appellant shall also extend its full co-operation in expediting the adjudication process so that it can be completed within the time as directed by the Hon ble High Court - denial of request to permit cross-examination of the Chief Chemist (DGH), whose opinion is relied in the show cause notice, is also wholly unjustified - Decided in favour of assessee.

Issues Involved:
1. Rejection of the request for examining and cross-examining witnesses under Section 138B of the Customs Act, 1962.
2. Denial of cross-examination of the Chief Chemist (EC), DGH, whose opinion was relied upon in the show cause notice (SCN).

Detailed Analysis:

1. Rejection of the request for examining and cross-examining witnesses under Section 138B of the Customs Act, 1962:

The appellant contested an order dated 15-10-2013, which denied their request to examine and cross-examine witnesses, despite their reliance on Section 138B of the Customs Act, 1962, and the precedent set by the Hon'ble Delhi High Court in Basudev Garg vs. Commissioner of Customs. The appellant argued that the adjudicating authority failed to consider the binding precedent and the statutory provisions properly.

The show cause notice (SCN) issued on 26.9.2013 aimed to deny the benefit of Notification No. 021/2002 dated 01.03.2002, demanded duty with interest, and proposed a penalty based on witness statements recorded under section 108 of the Act and the opinion of the Chief Chemist (DGH). The appellant, in their preliminary reply dated 07-10-2013, reserved the right to file a final reply after examining the witnesses as per Section 138B(2) of the Customs Act, 1962. However, this request was perfunctorily rejected by the adjudicating authority on 09-10-2013 and again on 15.10.2013 without addressing the appellant's submissions or the precedent cited.

The Tribunal found merit in the appellant's arguments, noting that the Departmental Representative could not justify the deviation from the procedure prescribed under section 138B. The Tribunal relied on the Hon'ble Delhi High Court's judgment in Basudev Garg, which emphasized the right to cross-examine witnesses unless exceptional circumstances specified in Section 138B(1)(a) exist. These circumstances include the witness being dead, unfindable, incapable of giving evidence, kept out of the way by the adverse party, or their presence being unreasonably delayed or expensive to obtain.

The Tribunal underscored that the adjudicating authority must form an objective opinion based on sufficient material to conclude that such circumstances exist before denying cross-examination. The failure to follow this procedure and the binding precedent led to the Tribunal's decision to allow the appeal.

2. Denial of cross-examination of the Chief Chemist (EC), DGH:

The appellant also sought the cross-examination of the Chief Chemist (EC), DGH, whose opinion was relied upon in the SCN. The adjudicating authority's rejection of this request was deemed wholly unjustified by the Tribunal.

The Tribunal reiterated the importance of cross-examination as a valuable right in quasi-judicial proceedings, citing the Hon'ble Apex Court's judgment in Sukhwant Singh vs. State of Punjab. The judgment highlighted that examination-in-chief and subsequent cross-examination are essential unless exceptional circumstances justify otherwise.

Conclusion:

The Tribunal allowed the appeals, directing the Respondent adjudicating authority to follow Section 138B and summon the witnesses for examination, offering them for cross-examination if their statements are to be considered relevant and admitted in evidence. The appellant was also entitled to cross-examine the Chief Chemist (EC), DGH. The adjudicating process was to be expedited in compliance with the Hon'ble High Court's directions.

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