2019 (5) TMI 167 - HC - Customs

Principles of natural justice - denial of cross-examination - HELD THAT - This Court notices in the present case that the statements of the co-accused, recorded under Section 108 of the Act, ultimately became the basis of the impugned order. The denial of the right of cross examination of such witnesses, was plainly in violation of the principles of natural justice. The Court is of the opinion that it would not be appropriate to relegate the appellant to the remedy of cross-examination in the course of an appeal, which would in effect amount to denial of an appellate forum, in the event, the findings of the Additional Commissioner are affirmed. As a consequence, the impugned order is set aside, as against the petitioners. The Additional Commissioner of Customs shall proceed to hear the petitioners and also grant appropriate and sufficient opportunity to cross-examine the witnesses, whose cross-examination was sought but denied in the original proceedings - Petition allowed by way of remand.

Summary

Issues:
1. Denial of permission to cross-examine witnesses by the Additional Commissioner of Customs.

Analysis:
1. The petitioners challenged the order of the Additional Commissioner of Customs, claiming they were denied the right to cross-examine witnesses whose statements were considered in the impugned Order-in-Original. The Adjudicating Officer rejected the cross-examination request citing it was made casually and some witnesses were interlinked. The respondent supported the adjudicating authority's decision, suggesting the petitioners should appeal for the right to examine witnesses. The Order-in-Original stated that cross-examination was not warranted as the witnesses voluntarily gave statements under Section 108 of the Customs Act. The judgment of the Supreme Court in Kanungo & Co. case was cited to support the denial of cross-examination.

2. The Order-in-Original also referenced decisions by the Hon'ble Calcutta High Court and CESTAT, stating that a noticee does not have an absolute right to cross-examine witnesses under Section 124 of the Customs Act. The judgment highlighted that failure to allow cross-examination does not violate natural justice, as statements made before Customs officials hold evidentiary value. The Court found the Additional Commissioner's view flawed, misinterpreting the Supreme Court judgment in Kanungo & Co. The Court emphasized that denying the right to cross-examine witnesses whose statements formed the basis of the order was a breach of natural justice.

3. The Court set aside the impugned order, directing the Additional Commissioner to grant the petitioners an opportunity to cross-examine the witnesses whose cross-examination was initially denied. The Court deemed it inappropriate to relegate the petitioners to appeal for cross-examination, as it would essentially deny them an appellate forum if the findings were upheld. The Additional Commissioner was instructed to hear the petitioners and ensure they have sufficient opportunity for cross-examination. The parties were required to appear before the Additional Commissioner on a specified date for further proceedings.

In conclusion, the High Court allowed the writ petition, emphasizing the importance of the right to cross-examine witnesses in adjudicating proceedings and setting aside the order that denied this right to the petitioners.