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TMI Blog2020 (11) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... st the petitioners were their statements recorded under Section 108 of the Customs Act, 1962, wherein certain confessions appear to have been made by them implicating themselves in the smuggling of cigarettes, which was subject matter of enquiry - no prejudice has been caused to the petitioners by the action of the 2nd respondent in denying an opportunity to them to cross-examine the other persons who had implicated them in the said act of smuggling. This Writ Petition is dismissed at the admission stage as not maintainable, giving liberty to the petitioner to avail the alternative remedy of Appeal under Section 129A of the Customs Act, 1962. - WP.No.18081 of 2020 - - - Dated:- 6-11-2020 - HONOURABLE SRI JUSTICE M.S. RAMACHANDRA RAO AND HONOURABLE SRI JUSTICE T. AMARNATH GOUD Petitioner Advocate : Mirza Nisar Ahmed Baig Respondent Advocate : Namavarapu Rajeshwar Rao ASSGI O R D E R: (Per Hon ble Sri Justice M.S. Ramachandra Rao) 1. This Writ Petition is filed by the petitioner challenging the final order dt.04.09.2020 passed by the 2nd respondent in Order in Original No.HYD-CUS-010-COM-20-21 in File No.DRI/HZU/48E/ ENQ-8(INT-15)/2015 relating to DIN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med Nimatullah Shareef, Mohd.Azher Khan, Alluri Nagesh Kumar, Shaik Javeed, Syed Mohammed Irfan and Mohammed Anwarullah, and the 1st petitioner underSec.108 of the Customs Act,1962 for the offence of smuggling imported cigarettes. 9. According to the 1st petitioner, due to enmity, certain persons, he was falsely implicated by his enemies. 10. The case of the DRI Officials was that the Cargo received under Airway Bill No.176-18681924 of Emirates Airlines at ACC, Shamshabad, by its custodian M/s Hyderabad Menzies Air Cargo Pvt Ltd. was released by such custodian on production of manual bill of entry No.000490 dt.08.10.2015, which was submitted by the 1st petitioner, to get the cargo released and that though the documents relating to the goods which were imported mentioned goods as molding accessories , on checking the same, they turned out to be imported cigarettes. 11. The consignment of cigarettes was detained under detention memo dt.08.10.2015. 12. Thereafter, a show cause notice dt.04.04.2016 was issued to the 1st petitioner, to show cause as to why penalty should not be imposed upon the 1st petitioner under Sections 112(a)/(b), 114AA and 117 of the Customs Act, 1962 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. Contentions on merits of the order insofar as the said order affects the petitioners are also raised. Contentions of the respondents 21. Sri B.Narasimha Sharma, Senior counsel for Central Taxes, appearing for respondents refuted the above contentions and submitted that the impugned order cannot be said to be solely based on the statements of third parties implicating the petitioners made under Section 108 of the Customs Act, 1962, who were not allowed to be cross-examined by the petitioners in paragraphs 13 to 18 of the impugned order. Reference has been made by the 2nd respondent to certain admissions/confessions made by the petitioners themselves indicating their role in the smuggling of imported cigarettes and therefore, they cannot contend that they had suffered any prejudice on account of denial of opportunity to cross-examine the individuals, who had implicated the petitioners in the activity of smuggling of the imported cigarettes. He also pointed out that even according to the petitioner, a show cause notice had been given to the petitioner, which was received by the petitioner, personal hearing was conducted on 02.03.2017 and 09.10.2019 wherein, counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion between two members of the Tribunal hearing appeals under the Central Excise Act,1944. The Vice President of the Tribunal held that such opportunity was denied and prejudice was caused thereby. The Supreme Court, noted that in the reply to the show cause notice, a request had been made for such opportunity; and since a remand sought on that ground was not opposed, it allowed the Appeal and remanded the matter to the Tribunal. There was no discussion in the short judgment of the Supreme Court in this case on the necessity to give opportunity to cross examine. 28. In Andaman Timber Industries (supra) cited by the Counsel for the petitioners, the Supreme Court did held that if an assessee is not allowed to cross-examine the witnesses by an adjudicating authority, there is a serious flaw and it would amount to violation of principles of natural justice. The impugned order of the CESTAT was set aside in those cases, and the matter was remanded back for fresh consideration. The court observed: 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 imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt should get an opportunity to cross-examine. The witness who intends to prove the said fact has the right to cross-examine the witness. This may not be provided by under the statute, but it being a part of the principle of natural justice should be held to be indefeasible right. ( See K.L. Tripathi v. SBI (1984) 1 SCC 43 and Lakshman Exports Ltd. v. CCE (2005) 10 SCC 634.) 46. We may also take note of the fact that this Court in Bareilly Electricity Supply Co. Ltd. v. Workmen (1971) 2 SCC 617 this Court held as under: (SCC p. 629, para 14) 14. the application of principle of natural justice does not imply that what is not evidence can be acted upon. On the other hand what it means is that no materials can be relied upon to establish a contested fact which are not spoken to by persons who are competent to speak about them and are subjected to cross-examination by the party against whom they are sought to be used. 30. The issue of prejudice to the affected party on account of denial of natural justice by way of cross-examination was not considered in Andaman Timber Industries (supra) and also in New India Assurance Co. Ltd. (supra) and such prejudice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of prejudice to the party who complains of denial of right to cross examine the witnesses, and in cases where there is a confession, such denial is justified and no prejudice can be pleaded by such party. 34. This was reiterated by the Supreme Court in M/s. Telestar Travels Pvt. Ltd. v Special Director Of Enforcement 2013(9) SCC 549 which observed that cross-examination of witnesses would make no material difference and failure to permit the party to cross-examine cannot be said to have caused any prejudice calling for reversal of the orders impugned by directing a denovo enquiry into the matter. 23. That brings us to the third limb of the attack mounted by the appellants against the impugned orders. It was argued by Mr Divan that while holding that Bountiful Ltd. was a paper company and was being controlled and operated from India by the appellants through Shri Sirish Shah, the adjudicating authority had relied upon the statements of Miss Anita Chotrani and Mr Deepak Raut, and a communication received from the Indian High Commission in London. These statements and the report were, according to Mr Divan, inadmissible in evidence as the appellant s request for an oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to show cause against the seizure of these wristwatches, the appellant produced vouchers to prove that the watches had been lawfully purchased by them between 1956 and 1957. However, upon certain enquiries, the Customs Authorities found the vouchers produced to be false and fictitious. The results of these enquiries were made known to the appellant, after which they were given a personal hearing before the adjudicating officer, the Additional Collector of Customs. Citing that the appellant made no attempt in the personal hearing to substantiate their claim of lawful importation, the Additional Collector passed an order confiscating the watches under Section 167(8), Sea Customs Act, read with Section 3(2) of the Imports and Exports (Control) Act, 1947. The writ petition filed by the appellant to set aside the said order was allowed by a Single Judge of the High Court on the ground that the burden of proof on the Customs Authorities had not been discharged by them. The Division Bench of the High Court reversed this order on appeal stating that the burden of proving lawful importation had shifted upon the firm after the Customs Authorities had informed them of the results of their e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and explain the same was a substantial compliance with the principles of natural justice. That being so, there was and could be no prejudice to the appellants nor was any demonstrated by the appellants before us or before the courts below. The third limb of the case of the appellants also in that view fails and is rejected. (emphasis supplied) 35. Thus there is no doubt that where a plea of violation of principles of natural justice by denying a party an opportunity to cross examine witnesses is raised in proceedings under the Customs Act,1962 or similar legislation, the question of prejudice suffered to such party by such denial has to be gone into. If there is no prejudice caused by such denial, no relief can be granted to him. The issues arising in this case are thus answered as above. 36. Having perused the impugned order passed by the 2 nd respondent, prima facie, it appears to us that the basis for levying penalty against the petitioners were their statements recorded under Section 108 of the Customs Act, 1962, wherein certain confessions appear to have been made by them implicating themselves in the smuggling of cigarettes, which was subject matter of enquiry. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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