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2025 (3) TMI 686 - AT - FEMADenial of principles of natural justice - absence of cross-examination of the Departmental Officers - Special Director Enforcement Directorate had denied the request to seek the cross-examination of Officer who recorded the statement of the Appellant under the provision of Custom Act 1962 and Officer who recorded the statement of co-noticees under the provisions of FERA. HELD THAT - We are unable to accept the contentions of the Appellant as the proceedings under Customs Act are factually different from the present proceedings under FERA. Appellants have been unable to prove how the cross-examination of theDepartmental Officials would have changed the outcome of the case or by being denied the opportunity to cross-examine they were adversely impacted during the Adjudication proceedings. We further observe that the Appellants have been unable to prove how the denial of the opportunity to cross-examine the Department Officers had caused prejudice to the Appellants in the presentcase. Absence of cross-examination of the Departmental Officers has not caused any prejudice to the Appellants in the present matter and not allowing the cross-examination was not fatal to the adjudication proceedings. We therefore find the impugned Interlocutory Orders to be maintainable and sustainable.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS Denial of Cross-Examination and Principles of Natural Justice Relevant Legal Framework and Precedents: The legal framework involves the application of the principles of natural justice within quasi-judicial proceedings under the Foreign Exchange Regulation Act, 1973 (FERA). The appellants relied on precedents from the Calcutta High Court and Delhi High Court, while the respondents cited Supreme Court judgments such as Kanungo & Co v. Collector of Customs and Telstar Travels Pvt Ltd v. Enforcement Directorate. Court's Interpretation and Reasoning: The Tribunal emphasized that the principles of natural justice are not rigid and must be applied flexibly. It referenced the Supreme Court's view that not every breach of natural justice results in invalidity unless prejudice is demonstrated. The Tribunal noted that the absence of cross-examination does not automatically imply a violation if no prejudice is shown. Key Evidence and Findings: The Tribunal found that the appellants failed to demonstrate how the denial of cross-examination prejudiced their case. The appellants did not challenge the credibility or integrity of the officers whose statements were recorded, nor did they show how cross-examination would alter the outcome. Application of Law to Facts: The Tribunal applied the principle that the denial of cross-examination does not violate natural justice unless it causes prejudice. It concluded that the appellants did not establish any prejudice resulting from the denial, as they could not demonstrate how cross-examination would have changed the adjudication's outcome. Treatment of Competing Arguments: The appellants argued that the denial breached natural justice principles, citing judgments that emphasized the necessity of cross-examination. In contrast, the respondents argued that the quasi-judicial nature of FERA proceedings does not rigidly require cross-examination, supported by Supreme Court precedents. The Tribunal sided with the respondents, finding no prejudice to the appellants. Conclusions: The Tribunal concluded that the denial of cross-examination did not breach natural justice principles, as the appellants failed to demonstrate any prejudice. It upheld the Impugned Orders, finding them maintainable and sustainable. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning: The Tribunal referenced the Supreme Court's reasoning in Kanungo & Co: "The principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed to be cross-examined by them on the statements made before the Customs Authorities." Core Principles Established: The judgment reinforces the principle that natural justice is flexible and its breach does not automatically invalidate proceedings unless prejudice is established. The Tribunal highlighted that procedural fairness must be assessed on a case-by-case basis, and not all violations necessitate setting aside an order. Final Determinations on Each Issue: The Tribunal determined that the denial of cross-examination did not violate natural justice principles, as no prejudice was demonstrated by the appellants. Consequently, the appeals were dismissed as being without merit, and the Impugned Orders were upheld.
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