2003 (3) TMI 99 - SC - Central Excise

Whether denial of opportunity to the GTC to cross-examine Shri Sailo, Lalchunganga and Liangtilinga was nothing short of denial of reasonable opportunity to the Writ Petitioner to defend and establish its version? Held that - An adverse finding could not have been recorded against the GTC by relying upon the oral submissions made by a co-noticee at the hearing without any supporting material on record, providing due opportunity to GTC to meet the same. This appeal is accepted in part and directions issued by the High Court to the Collector to summon Shri Sailo, Liantilinga and Lalchungunga for necessary examination and to afford an opportunity to the GTC to cross-examine them are set aside. But the order of the High Court setting aside the order of the Collector is sustained on the ground that the Collector had erred in placing reliance on the submissions of Shri Sailo. The direction issued by the High Court that the proceedings shall be taken by the officer other than the one who had made the adjudication order shall also stand set aside. Otherwise also this direction has become infructuous with the passage of time. The incumbent Collector is directed to decide the matter afresh on the basis of any other material obtained and also placed on record for the purpose duly granting reasonable opportunity to GTC to produce evidence in rebuttal. The Collector is directed to dispose of the matter within four months from the date of appearance of the parties before it. The parties through their counsel are directed to appear before the Collector of Customs, Shillong on 5th May, 2003. No costs.

Summary

Issues:
1. Denial of opportunity to cross-examine certain individuals.
2. Challenge to the ruling of the Collector.
3. Examination of the violation of Principles of Natural Justice.
4. Reliance on the statements of individuals during adjudication.
5. Appeal against the interim order.

1. Denial of opportunity to cross-examine certain individuals:
The Union of India appealed against the Gauhati High Court's order quashing the Collector's decision and remanding the case for fresh proceedings, including summoning specific individuals for examination. The High Court directed the Collector to resume proceedings and summon the individuals for cross-examination by GTC before deciding the matter afresh. The Collector had declined to issue summons to these individuals, who were co-noticees, for cross-examination by GTC, citing potential prejudice to their defense. The High Court found this denial of opportunity to cross-examine a breach of Principles of Natural Justice, setting aside the Collector's order.

2. Challenge to the ruling of the Collector:
The Collector's ruling, which declined to issue summons for cross-examination, was challenged in the High Court on the grounds of violation of Principles of Natural Justice. The High Court found that the denial of the opportunity to cross-examine specific individuals amounted to a denial of a reasonable opportunity for the petitioner to defend themselves. The High Court set aside the Collector's adjudication order and directed a fresh examination with the opportunity for cross-examination.

3. Examination of the violation of Principles of Natural Justice:
The High Court examined the violation of Principles of Natural Justice concerning the denial of the opportunity for GTC to cross-examine certain individuals during the adjudication proceedings. It held that this denial constituted a breach of Principles of Natural Justice, leading to the setting aside of the Collector's order and the remand of the case for fresh proceedings with the directive to allow cross-examination.

4. Reliance on the statements of individuals during adjudication:
The High Court found that the Collector had substantially relied on the statements of an individual during the adjudication process, which was deemed a breach of Principles of Natural Justice. The reliance on these statements without providing an opportunity for cross-examination was considered unfair to the petitioner, leading to the setting aside of the Collector's order.

5. Appeal against the interim order:
An appeal was filed against the interim order in the same proceedings, which became infructuous following the disposal of the main matter. The appeal was disposed of accordingly, with no costs imposed.

This detailed analysis of the legal judgment highlights the issues of denial of cross-examination, the challenge to the Collector's ruling, examination of Principles of Natural Justice, reliance on individual statements, and the appeal against the interim order.