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TMI Blog2019 (6) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... truth of the facts which it contains when, the person who made the statement is dead, or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable, or when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. The exceptions carved out under Section 138B(1) of the Act of 1962 from the general law of evidence, apply to a proceeding of adjudication under the Act of 1962, as it would apply in a proceeding before a Court for the prosecution of any offence under the Act of 1962. The Act of 1962 empowers the Customs authorities to make an enquiry, initiate adjudication proceedings and file prosecution. The Act of 1962 allows an appeal against an order-in-original passed in the adjudication proceeding. There [are] provisions for revision also. When making an enquiry, an officer of the Customs may require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vocate appearing for the petitioner has submitted that, the petitioner was served with a show cause notice dated February 13, 2017. The petitioner had replied to such show cause notice. In the reply, the petitioner had requested for cross-examination of the witness of the prosecution. He has referred to the impugned order-in-original and submitted that, although, the adjudicating authority has noted that, the petitioner wanted to cross-examine the prosecution witnesses, the adjudicating authority disallowed the same on the ground that, the evidence in adjudication proceedings need not be like the one in criminal cases. Moreover, according to the adjudicating authority, the circumstantial evidences corroborated the statements made under Section 108 of the Customs Act, 1962. The persons making the statements under Section 108 of the Act of 1962 made the same voluntarily and did not retract from the statements. Such witnesses were conversant with the facts of the case and the role of the petitioner. Moreover, the petitioner did not make out any specific reason or point for seeking cross-examination. Therefore, the request for cross-examination was denied. He has submitted that, an adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2018 [Commissioner of Customs (Port), Customs House Anr. v. Sadguru Forwarders Pvt. Ltd.] and judgment and order dated August 23, 2018 passed in G.A. No. 2234 of 2018 G.A. No. 2235 of 2018, A.P.O.T. No. 56 of 2018 with W.P. No. 85 of 2018 [Commissioner of Customs (Port), Customs House Anr. v. Sadguru Forwarders Pvt. Ltd. Anr.]. 5. Learned Senior Advocate appearing for the petitioner has submitted that, provisions of Section 138B of the Act of 1962 is pari materia as that of Section 9D of the Central Excise Act, 1944. He has submitted that, Section 138B of the Act of 1962 and Section 9D of the Act of 1944 were considered by diverse High Courts. The unanimous view of the other High Courts is that, a noticee is entitled to a right of cross-examination in an adjudication proceedings under the Act of 1962. In support of such contentions, he has relied upon 2013 (294) E.L.T. 353 (Basudev Garg v. Commissioner of Customs), 2016 (336) E.L.T. 15 (HIM Logistics Pvt. Ltd. v. The Principal Commissioner of Customs), 2018 (362) E.L.T. 465 (Bom.) (Ciabro Alemao Ors. v. The Commissioner of Customs, Goa Ors.), 1994 (69) E.L.T. 212 (Kallatra Abbas Haji v. Government of India), 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted an adjudication proceedings in respect of the show cause notice dated February 13, 2017 and the replies filed by the noticees with regard thereto. The petitioner is one of the noticees of the show cause notice dated February 13, 2017. 8. The petitioner was heard by the adjudicating officer. In the course of the hearing, the petitioner reiterated his request for cross-examination. The adjudicating authority, by the impugned order dated September 6, 2018 had dealt with the request for cross-examination. It noted that, the petitioner wanted to cross-examine the persons who gave statements under Section 108 of the Act of 1962 and which were relied upon in the show cause notices. The adjudicating authority held that, evidence in the adjudication proceedings need not be like the one in criminal cases. He found that, they are enough circumstantial evidences which provide for a reliable basis for corroboration of the statements given under Section 108 of the Act of 1962. He noted that, the witnesses gave the statements voluntarily and did not retract from the same. The witnesses were conversant with the facts of the case and the role of the noticee. The petitioner did not make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 193 and Section 228 of the Indian Penal Code, 1860 (45 of 1860). 122. Adjudication of confiscations and penalties. - In every case under this Chapter in which anything is liable to confiscation or any person is liable to a penalty, such confiscation or penalty may be adjudged, - (a) without limit by a Principal Commissioner of Customs or Commissioner of Customs or a Deputy Commissioner of Customs; (b) where the value of the goods liable to confiscation does not exceed five lakh rupees, by an Assistant Commissioner of Customs or Deputy Commissioner of Customs; (c) where the value of the goods liable to confiscation does not exceed fifty thousand rupees, by a gazetted officer of Customs lower in rank than an Assistant Commissioner of Customs or Deputy Commissioner of Customs. 122A. Adjudication procedure. - (1) The adjudicating authority shall, in any proceeding under this Chapter or any other provision of this Act, give an opportunity of being heard to a party in a proceeding, if the party so desires. (2) The adjudicating authority may, if sufficient cause is shown, at any stage of proceeding referred to in sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act of 1962, in which anything is liable to be confiscated or any person is liable to a penalty such confiscation or penalty may be adjudged by the persons as stipulated therein. Section 122A of the Act of 1962 lays down the adjudication procedure. It requires the adjudicating authority to give an opportunity of hearing to a party in a proceeding if such party so desires. Section 122A of the Act of 1962 recognises that, the principles of natural justice are applicable to a proceedings under the Act of 1962. Principles of natural justice are applicable to any proceeding which affects the interest of any person to such proceeding. Applicability of the principles of natural justice to a proceedings which affects any interest of any person, is to be read into a statute when it is silent. It can be excluded by a express provision made in the statute. In the present case Section 122A of the Act of 1962 makes the principles of natural justice applicable to an adjudication proceeding undertaken under the Act of 1962. 11. The Act of 1962 contemplates that, any gazetted officer of the customs can make an enquiry, with regard to any goods imported, which are prohibited for imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act of 1962 carves out few exceptions from such cardinal principle in a proceeding. Section 138B(1) of the Act of 1962 stipulates that, a statement made and signed by a person before any gazetted officer of the customs during the course of any enquiry or proceeding under the Act of 1962 shall be relevant, for the purpose proving, in any prosecution of an offence under the Act of 1962, the truth of the facts which it contains when, the person who made the statement is dead, or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable, or when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. 14. Cross-examination is the norm for making the statement made by a witness relevant for evaluation in the proceedings. Section 138B of the Act of 1962 carves out few exceptions and limits it to a proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 138B of the Act of 1962 was introduced with effect from September 1, 1973. Section 122A was introduced to the Act of 1962 with effect from September 10, 2004. Section 122A requires the adjudicating authority to give an opportunity of hearing to a party in a proceeding, if the party so desires. In the facts of the present case, the petitioner desired a hearing as well as exercised its right of cross-examination. M/s. Kanungo Company has held on consideration of the facts of that case, that there was no breach of natural justice. It has held that, the principles of natural justice do not require that in matters governed by the provisions of the Sea Customs Act, 1878 read with the provisions of the Imports and Exports (Control) Act, 1947, the persons who have given information should be examined in presence of the noticee or should be allowed to be cross-examined by them on the statements made before the customs authorities. As noted above, Section 122A of the Act of 1962 was introduced subsequent to M/s. Kanungo Company (supra). Surjeet Singh Chhabra (supra) has held that, where the petitioner seeks cross-examination of the witness who have said that the recovery was made from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at right of cross-examination is a part of the principles of natural justice and is an indefeasible right. In view of such pronouncement by the Supreme Court, the ratio laid down in Tapan Kumar Biswas (supra) that, the principles of natural justice do not extend to the cross-examination of the witness cannot be said to be good law any longer. 19. The Supreme Court in Lakshman Exports Ltd. (supra) while considering proceedings under the Central Excise Act, 1944 has held that, a noticee has a right to cross-examine the persons making statements against the noticee. 20. In M/s. V.K. Udyog Limited (supra) the Court has held that, in a quasi judicial proceeding, a party to such proceeding is entitled to cross-examine the witness of the other side when evidence is led through such witness in such proceeding. Skyrise Overseas Pvt. Ltd. (supra) has held that, denying the right to cross-examine the witness is in breach of principles of natural justice. Sadguru Forwarders Pvt. Ltd. (I) (supra) has quashed the order-in-original on the ground that it stands vitiated by breach of principles of natural justice on the refusal of the adjudicating authority to allow cross-examinat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d were upheld. Andaman Timber Industries (supra) has held that, denial of right of cross-examination of a witness before the adjudicating authority renders the order-in-original a nullity. In that case, an investigation was carried out against the assessee under the provisions of the Central Excise Act, 1944. Statement of two buyers were recorded and on that basis a show cause notice was served upon the assessee. The assessee questioned the correctness of the statement of such witnesses and demanded the right to cross-examine them. The adjudicating authority did not allow the assessee the right of cross-examination. The appellate authority rejected the appeal. The Supreme Court in Andaman Timber Industries (supra) has held as follows :- 6. According to us, not allowing the assessee to cross-examine the witnesses by the adjudicating authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, - (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceedings under this Act, other than a proceeding under a Court, as they apply in relation to a proceeding before a Court. 24. Kallatra Abbas Haji (supra) has considered Section 138B of the Act of 1962. It has held as follows :- 25. True, Section 138B states that a statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pool to form a basis for reasoning or conclusion. Section 138B does not say, and could not say, what statements can be taken as proved even without cross-examination. This, however, is how the CESTAT has misunderstood the section. All that the section says is that for want of production of a witness. This Section 108 statement does not automatically cease to become relevant. Questions of relevancy and proof are yet to determine by the Indian Evidence Act, and the CESTAT wholly failed to take these into account. 27. The Act of 1962 empowers the Customs authorities to make an enquiry, initiate adjudication proceedings and file prosecution. The Act of 1962 allows an appeal against an order-in-original passed in the adjudication proceeding. There [are] provisions for revision also. When making an enquiry, an officer of the Customs may require attendance of a person to make a statement. He is empowered to require a person to make a statement under Section 108 of the Act of 1962. Such a statement made in the course of an enquiry, and if its limited to the enquiry, then, the question of the person making the statement being open to cross-examination does not arise. However, onc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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