2016 (8) TMI 395 - HC - Customs

Cross examination of witnesses - Seizure inspection SCN imposition of penalty request for cross examination of witnesses - Held that - each case to be decided on the merit of the facts. While adjudicating the show cause notices, if the respondent propose to rely any of those statements, the petitioners should be given fair opportunity, because the show cause notices appear to be solely based upon the statements recorded from those three persons petitioner to reply to SCN opportunity of personal hearing if respondent proposes to rely upon the statements writ petition allowed.

Summary

Issues:
- Request for quashing an order by respondent
- Permission to cross-examine witnesses
- Justification of rejecting cross-examination request
- Compliance with principles of natural justice

Analysis:
The petitioners sought to quash an order by the respondent dated 21.07.2015 and requested permission to cross-examine three witnesses. The witnesses' statements were crucial as they implicated the petitioners in a case involving the seizure of Gold Bars. The respondent initially rejected the cross-examination request, citing that the statements were voluntarily given under section 108 of the Customs Act, 1962. The petitioners challenged this decision through writ petitions.

The respondent argued that providing an opportunity for cross-examination of witnesses is not mandatory, referring to a Supreme Court decision in KANUNGO & CO. v. COLLECTOR [1983 (13) E.L.T. 1486 (S.C.)]. The central issue was whether the respondent was justified in denying the cross-examination request based on the grounds in the impugned order. The Supreme Court precedent mentioned highlighted that not allowing cross-examination does not necessarily violate principles of natural justice if the show cause notice includes all materials relied upon.

The court noted that each case must be examined based on its unique circumstances. While the respondent had recorded statements from the witnesses under section 108 of the Customs Act, 1962, the petitioners should be given a fair opportunity to cross-examine them if the respondent intends to rely on those statements during adjudication. The court emphasized that if the respondent decides not to rely on the statements, then the need for cross-examination would not arise. The petitioners were granted six weeks to respond to the show cause notices and were assured an opportunity for personal hearing to request cross-examination if necessary.

In conclusion, the court allowed the writ petitions, quashed the impugned order, and instructed the petitioners to respond to the show cause notices. The court emphasized that the petitioners should be given a chance to cross-examine the witnesses if their statements are to be relied upon during adjudication, ensuring compliance with the principles of natural justice.