2019 (4) TMI 256 - HC - Customs

Principles of natural justice - opportunity of cross-examination - petitioner s grievance is that the Commissioner of Customs who adjudicated the various show cause notices refused and omitted to provide an opportunity of cross-examining four individuals, two of whom were named in the show cause notices - Held that - This Court is of the opinion that the petitioner, who has an alternative remedy, may invoke it, if so advised. At the same time, in the event the appeal is filed before the CESTAT, it would consider the same on merits and remand the matter for appropriate provision of opportunity of cross-examining the concerned witnesses. This remand is only for the purposes of providing opportunity of cross-examination to the petitioner (in other words, the appropriate remit order to record the cross-examination of witnesses only shall be made). This Court is also informed that the requirements in the statute of pre-deposit in all these cases would work out a substantial amount of about ₹ 1.4 crores. The CESTAT shall entertain and adjudicate on the merits of the appeal, including the remand provided the petitioner deposits 1% of the penalty amount in each case levied by the order-in-original within a time stipulated by the CESTAT - petition disposed off.

Summary

Issues:
Petitioner's grievance regarding lack of opportunity for cross-examining individuals named in show cause notices; Contention by respondent-Revenue on the availability of alternative appellate remedy before CESTAT.

Analysis:
The petitioner's primary contention revolved around the Commissioner of Customs adjudicating show cause notices without providing an opportunity for cross-examining four individuals, two of whom were specifically named in the notices and their statements were relied upon in the impugned order-in-original. The petitioner had disputed these statements in their replies to the show cause notices, emphasizing the importance of cross-examination for reliability. This lack of opportunity for cross-examination formed the crux of the petitioner's grievance.

The respondent-Revenue argued against the entertaining of the present petition, citing the availability of an effective appellate remedy before the CESTAT. The High Court, after due consideration of the submissions, acknowledged the existence of an alternative remedy for the petitioner. The Court opined that the petitioner could invoke this remedy if advised to do so. However, in case of an appeal before the CESTAT, the Court directed that the matter should be considered on its merits. Specifically, the Court highlighted the necessity of remanding the issue to provide the petitioner with the opportunity to cross-examine the concerned witnesses, thus ensuring a fair adjudication process.

In light of the substantial pre-deposit amount required by the statute in these cases, amounting to approximately ?1.4 crores, the Court outlined the conditions under which the CESTAT could entertain and adjudicate on the appeal. The petitioner was directed to deposit 1% of the penalty amount in each case levied by the order-in-original within a specified timeframe set by the CESTAT. Furthermore, the CESTAT was instructed to review the proceedings concerning the cross-examination of witnesses conducted by the Commissioner and proceed with hearing the appeal on its merits, making a decision in accordance with the law.

The High Court, while disposing of the writ petitions, maintained that all rights and contentions of the parties were to be kept open, ensuring a fair and comprehensive resolution of the issues raised by the petitioner. The order was to be issued under the signatures of the Court Master, finalizing the judgment in the above terms.