2020 (3) TMI 359 - AT - Customs

Principles of Natural Justice - request for cross-examination denied - classification of imported goods - Polyester Woven Fabrics - goods were mis-declared as Polyester Bed Cover/Quilt Cover - classifiable under CTH 5407 or otherwise? - Maintainability of appeal - HELD THAT - In the present case, entire show-cause notice rests on documents, namely, test report of ATIRA and Textile Committee, Bombay. There are no other relied upon documents in the show-cause notice. Both these reports disputed the classification and description of the imported goods claimed by the assessee. Under these circumstances, we are of the opinion that there would be grave injustice if the appellant is not allowed to cross-examination the author of two test reports. Any adjudication order passed by denying such cross-examination is unlikely to stand the test of legal scrutiny - It is also found on the other hand, that the appellant has been careless in not even filing a written reply to the show-cause notice, but only seeking cross-examination - it is hoped that the appellant files a detailed written reply to the show-cause notice before the Commissioner without delay. Maintainability of appeal - HELD THAT - We have also examined the maintainability of this appeal, which is not against the adjudication order, but only against a letter of lower authority communicating the decision of the adjudicating authority to deny the cross-examination - In the facts and circumstances of the present case, since the entire show-cause notice is based only on the reports of ATIRA and Textile Committee, Bombay, we are of the opinion that this letter issued by Deputy Commissioner, communicating the decision of the adjudicating authority to deny the cross-objection, is a significant decision which falls within the ambit of Section, 129A of the Customs Act, 1962 as a decision by the adjudicating authority - thus the present appeal is maintainable. The denial of cross-examination communicated through the impugned order needs to be set aside - The Commissioner shall allow cross-examination of the officer, whose test reports are relied upon for issue of show-cause notice - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of cross-examination by the Commissioner of Customs
- Maintainability of the appeal against the denial of cross-examination

Analysis:
Issue 1: Denial of Cross-Examination by the Commissioner of Customs
The appellant appealed against a letter denying cross-examination issued by the Deputy Commissioner of Customs. The appellant imported goods declared as 100% Polyester Bed Cover/Quilt Cover but was suspected of misdeclaration. The Directorate of Revenue Intelligence conducted inquiries and sent the goods for testing. Based on the test reports, a show-cause notice was issued proposing reclassification and demanding differential duty. The appellant sought cross-examination of the testing organizations, which was denied. The appellant argued that denial of cross-examination violated principles of natural justice. The Tribunal noted that the entire case was based on the test reports and allowing cross-examination was crucial for a fair adjudication. The Tribunal found that not allowing cross-examination could lead to an unjust decision. The appellant was advised to submit a detailed written reply to the show-cause notice.

Issue 2: Maintainability of the Appeal
The Revenue argued that the appeal was not maintainable as it was against a letter of the Deputy Commissioner, not a final decision. They contended that the denial of cross-examination was not appealable at this stage. However, the Tribunal found that since the case heavily relied on the test reports, the denial of cross-examination was a significant decision falling under Section 129A of the Customs Act, making the appeal maintainable. Citing previous judgments, the Tribunal determined that the denial of cross-examination was a crucial aspect of the adjudication process. Therefore, the Tribunal allowed the appeal, setting aside the denial of cross-examination and instructing the Commissioner to permit the cross-examination of the testing officer.

In conclusion, the Tribunal found in favor of the appellant, allowing the appeal against the denial of cross-examination. The decision highlighted the importance of allowing cross-examination, especially when the case heavily relied on test reports. The Tribunal emphasized the need for a fair adjudication process and advised the appellant to submit a detailed written reply to the show-cause notice.