2017 (8) TMI 255 - AT - Customs

Confiscation - penalty - export of restricted item - Red Sanders - Smuggling - principles of Natural Justice - Held that - the investigating agency attempted to interrogate the appellants, but failed to do so as they did not turn up in response to the summons. But it is not clear that when the appellants appeared in personal hearing, why the investigating officers were not given an opportunity to interrogate them. In my considered view, the investigating agency should be given an opportunity to interrogate the appellants as they had not appeared during investigation and thereafter, the Adjudicating Authority would proceed to decide the matter after considering the right of the cross examination as claimed by the appellants - appeal allowed by way of remand.

Summary

Issues:
1. Violation of principles of natural justice in the imposition of penalties.
2. Reliance on the statement of an absconding individual.
3. Failure to allow cross-examination.
4. Legality of the addendum to the show-cause notice.

Analysis:
1. The case involved appeals against orders imposing penalties on the appellants for illegal export of Red Sanders wood. The appellants challenged the orders on the grounds of violation of natural justice principles and lack of evidence of their involvement. The Adjudicating Authority had confiscated the goods and imposed penalties based on the statement of an absconding individual, Shri Sanjit Das, without allowing cross-examination. The appellants argued that the penalties were unjustified as there was no concrete evidence implicating them.

2. The Adjudicating Authority's reliance on the statement of Shri Sanjit Das, who was absconding, raised concerns regarding the fairness of the proceedings. The appellants contended that the entire case was built on Das's statement, and they were not given the opportunity to cross-examine him. The Tribunal noted that the investigating agency made efforts to summon the appellants for interrogation based on Das's disclosure of their address. However, the appellants claimed they were not properly informed as they resided at a different address. The Tribunal emphasized the importance of allowing the investigating agency to interrogate the appellants and consider their right to cross-examination before imposing penalties.

3. The Tribunal found that the Adjudicating Authority failed to address the appellants' request for cross-examination and did not thoroughly examine the legality of the addendum to the show-cause notice. The Authority's decision to impose penalties without ensuring the appellants' right to cross-examination was deemed unjust. The Tribunal highlighted the need for a fair and thorough investigation process, including allowing the investigating agency to interrogate the appellants before reaching a decision.

4. Ultimately, the Tribunal allowed the appeals and remanded the case to the Adjudicating Authority for a fresh decision. The Tribunal directed the Authority to consider the observations made, allow the investigating agency to interrogate the appellants, and ensure the right to cross-examination. The decision emphasized the importance of upholding natural justice principles and conducting a comprehensive examination of the case before imposing penalties.