9911796707
TMI Blog2013 (5) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... .e. aromatic chemicals, from France, Dubai, Singapore and Japan, processes and manufactures perfumes, attars, bakhoor powder and sandalwood oil and exports the same. The Office of the Development Commissioner, MEPZ, Chennai, had issued three licences for manufacture of perfumes and cosmetics besides agarbatis and bakhoor with an annual capacity of 400 M.Ts. Under licence dated 27.03.2003, the 1st petitioner firm imported Aromatic Chemicals for manufacture of perfume cosmetics, agarbattis and bakhoor and under licence dated 26.03.2003, the 1st petitioner firm imports sandalwood logs and roots from M/s. ADEP Impex, Tanzania, for manufacture of Sandalwood oil. It is stated that though under the licence dated 23.03.2004, petitioner firm was permitted to trade in Sandalwood, as it could not be done within the period allotted and therefore, it stood cancelled. The items imported like Aromatic Chemicals Herbs, Sandalwood, etc. are solely and exclusively used in the manufacture of perfumery spryas, bakhoor powder, bakhoor oil, Indian attars and sandalwood oil, which are duly exported. It is stated by the petitioner that every receipt of imported material into the manufacturing facility / f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an attars (bakhoor incense) weighing 130,000 kgs. Each for export of the same to M/s. Sherzam Trading Enterprises, Singapore. The goods were stuffed into the container and sealed with one time seal affixed by the Appraiser of Customs, attached to the Office of the Deputy Commissioner of Customs, MEPZ, Tambaram, Chennai. Similarly, in respect of Shipping Bill No: 8973 dated 10.12.2004, the connected export documents have been duly filed with the said office, which has permitted for export under let-export order after affixation of the one time seal on the containers. While so, on the basis of information, the Directorate of Revenue Intelligence, Zonal Unit, Chennai, said to have intercepted the containers outside the MEPZ area in respect of Shipping Bill Nos: 8974 and 9099 and recovered there from 4.314 M.Ts. of Sandalwood, besides 39.580 M.Ts. of Red Sanders from the said consignments. It is the further case of the petitioners that the 2nd petitioner was not present at the time of stuffing of the export goods in the containers at the factory site and that the concerned Appraiser checks each and every box and package before affixing the seal on the lock of the container and once the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this writ petition. 3. At the first instance though a very cryptic counter affidavit was filed by the Assistant Commissioner of Customs, Air Commissionerate, Meenambakkam, Chennai 600 027, later an additional Counter affidavit came to be filed by the Deputy Commissioner of Customs (Legal), Air Cargo Complex, Meenambakkam, Chennai 600 027, furnishing full details of the case. It is submitted in the counter that in this case smuggling was unearthed by the Directorate of Revenue Intelligence who issued the show cause notice to the petitioner and others. The Show Cause Notice dated 13.06.2005 was received from the Directorate of Revenue Intelligence by the Commissionerate and after completing formalities, it was taken up for adjudication in the normal run. On 05.09.2011, a personal hearing was offered to all the four noticees as well as for the counsel for the petitioners. The counter for the petitioner, vide letter dated 2.9.2011, sought for an adjournment of the case and Mr.Palanikumar, counsel for co-noticee Mr.Selvaraj, vide his letter dated 3.9.2011, requested for an adjournment and it was granted for both of them. Further three more personal hearings were given on 26.09.2011, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... played by the said four persons do not in any way relate to the act of smuggling perpetrated by the petitioner. Mr. Raghu is a driver of the trailer, who says that he brought the vehicle inside MEPZ, left it there and then, he was asked to wait outside and that after putting the customs seal, he was asked to take the vehicle outside the MEPZ. Mr.Mohammed Nizam is the manager of the petitioner and his own uncle is the partner of the petitioner-firm. He says that Mr.Selvaraj used to send his persons Mr.Dhanapal and Mr.Yuvaraj, who would stuff the red sanders at the factory of the petitioner. By that time, all employees of the petitioner would not know as they used to go outside the factory; that as per the latest guidelines, regular examination by the customs is not required for the import and export cargo for the units situated at MEPZ. Another named witness, Mr.Dhanapal and Mr.Yuvaraj are the employees of the supplier. They gave a voluntary statement under Section 108 of the Customs Act admitting that they would stuff red-sanders and place them at the back side of the cargo and in the front side declared goods of agarbathi, etc. would be loaded. Beyond that they did not depose. Ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court as a back-gate method and, therefore, the respondent prayed for dismissal of the writ petition. 7. On the above background and pleadings, I have heard the learned counsel on either side and perused the records. 8. The main contention, in fact the only contention, raised by the learned counsel for the petitioners is that the respondents ought to have given the petitioners an opportunity to cross examine the four persons named in the show cause notice and that denial of such an opportunity would amount to violation of the principles of natural justice and on this sole ground, the impugned order is liable to be quashed. In support of his contentions, he relied on the following decisions :- I. 1991 (56) E.L.T. 29 (Bom.)- G.T.C. Industries Ltd., vs. Union of India :- 3. The order appears a travesty of the principles of natural justice. It may be that for good ground the 3rd respondent might have found reason to deny the petitioners the cross-examination of all or some of the 30 witnesses. But it did not and could not follow that the petitioners were to be denied the right to lead oral and documentary evidence in support of their case and a personal hearing in that beh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices recovered by the Investigating Agency. He also relied upon the so-called statement made by Shri Sunny P.Kunnath to the Investigating Officer that out of the 82 invoices 62 invoices which even though did not show the name of Shalimar Rubber Industries, the appellants herein under the said fictitious invoices did purchase huge quantity of carbon black from M/s.Universal Agencies. As noticed above, this witness was not examined by the Collector in the Proceedings. Consequently, he could not be subjected to a cross-examination. Question thus arises, can the evidence of this witness be accepted as gospel truth to condemn the appellants herein ? It is to be seen from the records that the appellants herein had produced a letter dated 22nd June, 1987 written by M/s.Universal Agencies of which above mentioned Shri Sunny P. Kunnath was a partner wherein it was specifically stated that the appellant Shalimar Rubber Industries had not purchased carbon black recovered by the 62 of the 82 invoices. The Collector in the course of his order rejected this letter preferring to rely on the alleged oral statement made by said Shri Kunnath to the Inspector. While discussing this point the Coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ination. The notice of the adverse material and opportunity of cross-examination is necessary because wherever the opponent has declined to avail himself of the offered opportunity, it must be supposed to have been because he believed that testimony could not or need not be disputed at all or be shaken by cross-examination. In this view of the matter, right to cross-examine or to have opportunity to effectively exercise that right is an essential part of principles of natural justice. [See 2002(143) E.L.T 21 (S.C.); 2001 (136) E.L.T. 9 (Bom.,); 2002 (141) E.L.T. 24 (A.P.); 2000 (86) DLT 1 (DB) and 1978 (2) E.L.T.(J 502) (Delhi)]. 46. Thus affected person must be given fair opportunity not only to answer the case against him but to adduce positive evidence in support of his own case together with right to contradict all adverse allegations, if necessary, by permitting him to cross-examine the witnesses of the opponent. " V. 2011 (263) E.L.T. 481 (S.C.) Automotive Tyre Manufacturers Asson. vs. Designated Authority : " 58. It is thus, well settled that unless a statutory provision, either specifically or by necessary implication excludes the application of principles of natural ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final decision in the matter. Even written arguments are no substitute for an oral hearing. A personal hearing enables the authority concerned to watch the demeanour of the witnesses etc. and also clear up his doubts during the course of the arguments. Moreover, it was also observed in Gullapalli (supra), if one person hears and other decides, then personal hearing becomes an empty formality. In the present case, admittedly, the entire material had been collected by the predecessor of the DA; he had allowed the interested parties and/or their representatives to present the relevant information before him in terms of Rule 6(6) but the final findings in the form of an order were recorded by the successor DA, who had no occasion to hear the appellants herein. In our opinion, the final order passed by the new DA offends the basic principle of natural justice. Thus, the impugned notification having been issued on the basis of the final findings of the DA, who failed to follow the principles of natural justice, cannot be sustained. It is quashed accordingly." 9. Refuting the above submissions, the learned Senior Central Government Standing counsel appearing for the respondents placed r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that purpose. The appellant does not dispute any of these facts. In these circumstances, it cannot be said that the appellant was not given an opportunity to question Shri Balinder Singh Sachhar recording his statement. There has, therefore, been no failure of natural justice on this account." 3. 1996(83) E.L.T.486 (S.C.)-Union of India vs. Jesus Sales Corporation " 5. The High Court has primarily considered the question as to whether denying an opportunity to the appellant to be heard before his prayer to dispense with the deposit of the penalty is rejected, violates and contravenes the principles of natural justice. In that connection, several judgments of this Court have been referred. It need not be pointed out that under different situations and conditions the requirement of compliance of the principle of natural justice (varies). The courts cannot insist that under all circumstances and under different statutory provisions personal hearing have to be afforded to the persons concerned. If this principle affording personal hearing is extended whenever statutory authorities are vested with the power to exercise discretion in connection with statutory appeals, it shall lead to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds that an appeal against an order imposing a penalty shall not be entertained unless the amount of the penalty has been deposited by the appellant. Thereafter the third proviso vests a discretion in such Appellate authority to dispense with such deposit unconditionally or subject to such conditions as it may impose in its discretion taking into consideration the undue hardship which it is likely to cause to the appellant. As such it can be said that the statutory requirement is that before an appeal is entertained, the amount of penalty has to be deposited by the appellant; an order dispensing with such deposit shall amount to an exception to the said requirement of deposit. In this background, it is difficult to hold that if the Appellate authority has rejected the prayer of the appellant to dispense with the deposit unconditionally or has dispensed with such deposit subject to some conditions without hearing the appellant, on perusal of the petition filed on behalf of the appellant for the said purpose, the order itself is vitiated and liable to be quashed being violative of principles of natural justice. 6. .... ..... ....... 7. In the present case on the application filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the authority warranting interference." 5. 2003 (153) E.L.T. 244 (S.C.) - Union of India vs. G.T.C. Industries Ltd. "16. 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 support material on record, providing due opportunity to G.T.C. to meet the same. 17. For the reasons stated above, the appeal is accepted in part and directions issued by the High Court to the Collector to summon Shri. Sailo, Liantilinga and Lachungunga for necessary examination and to afford an opportunity tot he 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation where each one of them, in the same breath would ask for cross-examination of the other and refuse to require that in matters like this, persons who had given information should be allowed to be cross-examined by the co-noticees on the statements made before the customs authorities. If cross-examination is to be allowed as a matter of right then in all cases of conspiracy and joint dealings between the co-noticees in the commission of the offences in connection with the contraband goods, they can bring about a situation of failure of natural justice by a joint strategic effort such co-noticees by each one refusing to be cross-examined by resorting to Article 20 (3) of the Constitution and simultaneously claiming cross-examination of the other co-noticees. We, therefore, hold that the appellants, including the appellant Ashish Kumar Chaurasia were not entitled to claim cross-examination as a matter of right. The appellant Ashish Kumar Chaurasia had, in fact, cross-examined two official witnesses and at the end, he had only sought for time for further hearing. The cross-examination made by the appellant, Ashish Kumar Chaurasia of two officers, A.K.Chaturvedi and Simon has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Directorate, Chennai. "17. As regards denial of opportunity to cross examine Smt. Mariam Beevi and Ramraj the learned special counsel for the Enforcement Directorate submitted that they have clearly stated that they did not know the names of those who came and gave money to them. These statements are also natural. Smt. Mariam Beevi had stated that she received the money as per the instructions of her husband Sulthan during the last week of August. This would not clearly amount of denial of natural justice. 27. Therefore, the case does not rest on the statement of the appellant alone, but it receives strength from the statement recorded from Smt. Mariam Beevi and Ramraj and we do not see the denial of opportunity to cross-examine these two persons had in any way resulted in violation of principles of natural justice. The two cases referred to by the learned counsel for the appellant can be distinguished on facts. 30. Therefore, these two decisions do not support to the case of the appellant. Therefore, we do not agree that the principles of natural justice has been violated by not allowing the appellant to cross-examine these two persons. " 10. A microscopic and panoramic view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... control and supervision of the office is at the hands of a Deputy Commissioner of Customs. Besides the Preventive Officers, the Customs formation also has examiners, appraisers posted, who carry out the function of examination and verification of every goods, which enter or exits from the MEPZ. Two registers are maintained at the gate wherein details of imports and exports by the companies situated at MEPZ would be registered respectively. The Registers will have details of Shipping Bills / Bill of Entry and other relevant details pertaining to the goods and transportation thereof. With regard to entry of raw materials for export companies or the goods sent for job work by Export Companies, "passed-in" and "passed-out" stamp will be affixed on the documents accompanying the goods. 11. While so, the petitioner filed Shipping Bill Nos: 8974 and 9099 dated 10.12.2004 and 15.12.2004 respectively, for shipment of Indian attars (bakhoor incense) weighing 130,000 kgs. each for export of the same to M/s. Sherzam Trading Enterprises, Singapore. The goods were stuffed into the container and sealed with one time seal affixed by the Appraiser of Customs, attached to the Office of the Deputy C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, directing the respondents to dispose of petitioner's representation dated 14.11.2011 within a time limit. 14. Subsequent to that, the respondents took up the matter and passed an order dated 13.01.2012 and rejected petitioner's demand for cross examination of the persons named in the show cause notice. Thereafter, the show cause notices were taken up for adjudication and by the impugned Order-in-Original No: 26 of 2012 dated 18.01.2012. Questioning the same, the petitioners raised a point that denial of the right to cross examination of the witnesses whose statements are sought to be relied upon in any proceeding would result in penal and civil consequences is a very fundamental theory and therefore, such a right cannot be denied. 15. Rejecting the above claim, at the first instance the Assistant Commissioner of Customs, Air Commissionerate, Meenambakkam, Chennai 600 027, filed a very cryptic counter affidavit without answering any querry raised by the petitioner. Later on they filed an additional Counter affidavit by the Deputy Commissioner of Customs (Legal), Air Cargo Complex, Meenambakkam, Chennai 600 027, stating that in this case smuggling was unearthed by the Directorat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed the order and disposed of the representation of the petitioner. In the personal hearing offered, the learned counsel for one of the noticees only prayed for leniency while others only took adjournments. It is contended by the respondents that the only remedy available tot he petitioner is prefer an appeal before the CESTAT and in order to avoid payment of pre-deposit, the petitioner has filed this writ petition. 16. As regards the denial of right of cross examination of the four persons named in the show cause notices, the respondents contended that the role played by the said four persons do not in any way relate to the act of smuggling perpetrated by the petitioner. To that effect it is submitted that Mr. Raghu is a driver of the trailer, who says that he brought the vehicle inside MEPZ, left it there and then, he was asked to wait outside and that after putting the customs seal, he was asked to take the vehicle outside the MEPZ. Mr.Mohammed Nizam is the manager of the petitioner and his own uncle is the partner of the petitioner-firm. He says that Mr.Selvaraj used to send his persons Mr.Dhanapal and Mr.Yuvaraj, who would stuff the red sanders at the factory of the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was imposed on the 1st petitioner; penalty of Rs. 20 lakhs was imposed on the 2nd petitioner and penalty of Rs. 20 lakhs was imposed on Mr. Selvaraj, proprietor of the supplier of Red Sanders. Immediately, without resorting to any further remedy, petitioners have rushed to this Court as if there is denial of an opportunity of cross examination. It is neither explained nor made out as to why the petitioners have not challenged the order dated 13.01.2012, wherein the petitioners' claim for cross-examination of the four persons named in the show cause notices has been rejected. Now, the consequential order confiscating the goods and imposing penalty on the individuals alone is questioned. 18. As regards the question of confiscation of prohibited goods and imposition of penalty on individuals involved in dealing with prohibited goods are all matters on merits, which has to be adjudicated by the petitioners before the appropriate forum, which is effectively available. When the petitioners have not challenged the order dated 13.01.2012, on the question of denial of opportunity to cross examine the named persons, this Court cannot look into the matter as if there is violation of principl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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