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TMI Blog2021 (10) TMI 1411X X X X Extracts X X X X X X X X Extracts X X X X ..... SE: 3. That this petitioner and other petitioners after had been for a short or brief period in foreign countries like Dubai returned to India through air between 05.11.2019 and 07.11.2019. In this context, it is to be noted that based on the input received from Directorate of Revenue Intelligence (DRI), all passengers arriving from Kuala Lumpur, Dubai, Sharjah and Singapore to Trichy through some international flights like Air Asia, Air India Express, Scoot Tiger Airlines on 05.11.2019 have concealed huge quantities of 24 karat gold in the form of crude chain, paste etc. Therefore, the DRI officials at about 22:15 hours on 05.11.2019 at Trichy airport, claimed to have monitored the passengers who arrived or started arriving from the aforesaid flights and when the passengers, according to the respondent / Customs, were about to exit the green channel, their passports were verified and some of the passengers were enquired. According to the Customs, the passengers were enquired / verified whether they were in possession of any gold or any other contraband and if so, whether they have declared so on their arrival before the Customs. However, the passengers in the presence of the DRI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt / Customs and they in fact, intended to declare the same, since before they crossed the DFMD they were intercepted, the chance was not given to them to make the declaration. Moreover, whatever goods brought by them seized by the Customs were not based on any procedure to be adopted in this regard by drawal of mahazar with independent witnesses, after examining the passengers in front of the Magistrate and in violation of these procedures, according to the petitioners, since such a seizure exercise was completed by the Customs on the alleged single mahazar, despite the fact that this episode continued for more than 26 hours, starting from late hours of 05.11.2019 and ending at early hours on 07.11.2019, neither at the time of this seizure procedure taken place nor thereafter, the chance of retracting the alleged statements recorded by the Customs against the petitioners were given and ultimately, when show cause notices were issued, that was the first time these petitioners had an occasion to retract the same and therefore, every one of the petitioners had made a strong objection to the allegation of alleged offence under Section 102 of the Customs Act, 1962, [In short, 'the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04.2021 also was made available to the Customs. However, according to the petitioners, the Customs proceeded to complete the adjudication proceedings and by two separate orders dated 02.06.2021 & 22.06.2021, the adjudication proceedings concluded and order of confiscation and consequential effect has been ordered. 12. Therefore, according to the petitioners, despite the order of the Writ Court dated 28.04.2021, was in force, where it has been specifically held by the learned Judge that, the adjudication proceedings cannot be allowed to continue for the purpose of determining their guilt and also despite the request having been made by the petitioners, of course, while making reply to the show cause notice that, chance of cross examination has to be given to them, denying that chance of cross examination and in violation of the order already passed in this regard, as referred to above, since this order of adjudication has been passed through the impugned orders referred to above, the petitioners having no other option except to prefer writ petitions before this Court as these orders primarily is assailable, according to them, on the ground of violation of principles of natural just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... followed by the alleged statement made under Section 108 of the Act, it cannot be the basis for arriving at a conclusion that the petitioners were guilty. 15. Apart from the abovesaid main grounds, the learned Counsel for the petitioner also canvassed the following points as ancillary submissions: a) Since the passengers numbering about 129 who are involved in this case had arrived in three consecutive days from various destinations through various flights, all these passengers cannot be put under one basket by drawal of one seizure mahazar. Therefore, based on such one seizure mahazar, the case of the Customs cannot be built towards adjudication. b) Since the two mahazar witnesses are the only independent witnesses for the whole episode, their deposition before the adjudicating authority is the crucial one, as by which alone the statement said to have been recorded or the averments made in the seizure mahazar can be corroborated. Therefore, the failure to produce the mahazar witnesses for examination and consequently, the cross examination is fatal to the case. c) Under Section 102(4) of the Act, before making the search, the officer of Customs shall call upon two or more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these decisions, the learned Counsel for petitioners would contend that, since the principle of natural justice is an integral part of fair adjudication in any such proceedings like the present one, that principle should have been scrupulously followed by the adjudicating authority. If the adjudicating authority has decided the issue mainly relying upon the seizure mahazar as well as the alleged statement recorded under Section 108 of the Customs Act, fair chance of retracting the same and to establish the counter case on the part of the petitioners should have been given, by allowing them to cross examine both the mahazar witnesses as well as the officials or officer concerned, who prepared the mahazar as well as recording of the statements. In the absence of such a chance being given to the petitioners, the entire adjudication proceedings which culminated in the order impugned gets vitiated. 18. They would also submit that, very particularly, the present cases are concerned, it is one episode according to the Customs department. Therefore, one single seizure mahazar was prepared for the whole 129 passengers who arrived at consecutively in three days from various destinations by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of this Court, having considered the findings given by the Writ Court, has stayed the order, by order dated 30.06.2021. Therefore, the said order passed by the Writ Court dated 28.04.2021, is no more available to press into service against the impugned orders. b) No doubt, the principle of natural justice is one of the important facet of any quasi-judicial or adjudication proceedings, but there is no hard and fast rule that, the chance of cross examination of witnesses, have to be given invariably in every case and if such a chance is not given, therefore, it cannot be construed as a violation of such principle. c) Though the episode was started from 05.11.2019 midnight and ended on the early hours on 07.11.2019, since there has been some interconnectivity among these petitioners or the whole passengers who were involved in the activities of bringing various metals like gold and silver and other costly electronic items to this country had a common object to clear the goods by moving through green channel, without even disclosing what they have brought and this kind of specific revenue intelligence report since was obtained by the DRI, the surveillance was mounted on the parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amined. Therefore, giving the chance of cross examination to these petitioners does not arise. g) Moreover, assuming that they sought for a chance of cross examination first time in the reply to the show cause notice, pursuant to which, the officer who conducted the adjudication proceedings not acceded to that request made by the petitioner and accordingly, he proceeded to complete the adjudication proceedings, at that moment, the very denial of the officer concerned could have been treated as an order passed by the adjudicating authority and that order itself is an appealable order under Section 128 of the Customs Act. When the petitioners had not chosen to challenge such denial of cross examination chance as alleged, it deems that they accepted the adjudication proceedings without even acceding to their request of cross examination as that is unwarranted in the present case, in view of the categorical confession statement recorded under Section 108 of the Act readily available with the adjudication authority. h) It is also a settled principle that, when there is an alternative efficacious appellate remedy available, without exhausting the same, the extraordinary jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted in 2021 (4) SCC 1 in Tofan Singh -Vs- State of Tamil Nadu. 14. Hon'ble Supreme Court Judgment reported in 1963 AIR (SC) 822 - RadhaKishan -Vs- State of U.P 15. Hon'ble Supreme Court Judgment reported in 1970 AIR (SC) 1065 - Illias -Vs- The Collector of Customs Madras. 16. Hon'ble High Court of Kerala at Eranakulam reported in 1989 (1) MLJ (Cri) 381 - Thaomas -Vs- Union of India. 17. Hon'ble Supreme Court Judgment reported in 2016 (11) SCC 368 in Sekhar Suman Verma -Vs- The Superintendent of N.C.B & another. 18. Hon'ble Supreme Court Judgment reported in 2007 (6) SC 410 in Ravindran @ John -Vs- The Superintendent of Customs. 19. Hon'ble High Court of Bombay reported in 1979 Supreme (Bora) 232 in Mahfoos khan Mehboob Sheikh -Vs- R.J.Parakn another 20. Hon'ble High Court of Madras reported in 1999 (113) E.L.T 801 (Mad.) in Abdul Wahib -Vs- Assistant Commissioner of Customs (Prosecutor) Madras. 21. Hon'ble High Court of Bombay reported in 1991 (53) E.L.T 178 (Bom.) in Assistant Collector of Customs -Vs. Kunhi Korath Balan. 22. Hon'ble Supreme Court Judgment reported in 1983 (13) E.L.T 1620 (S.C.) in State of Maharashtra -Vs Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent does not have any agreement or the Customs Department cannot be a custodian of the CCTV footage of the Airport Authority of India, it cannot be construed that the entire adjudication proceedings cannot be allowed to continue and that is the reason why while interjecting the order of the writ Court, the Division Bench has categorically stated that, the finding given by the learned Judge is unwarranted and therefore, the order has been stayed. Therefore, learned Standing Counsel would contend that, the plea raised by the petitioners that chance of cross examination was not given and the writ Court order, dated 26.04.2021 was in force and therefore these two reasons were mainly projected by the petitioners in favour of them to assail the impugned order, according to the respondents counsel, would not be of much use to them and therefore, on that ground they cannot interject the impugned orders successfully. Hence, the learned Standing Counsel would contend that, the impugned orders are very well sustained and if at all still the petitioners feel that they have any grievance over the impugned order, they can very well prefer appeal before the Appellate authority and without preferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he mahazar, were asked the question whether they were in possession of any gold or any other contraband and whether they have declared them on their arrival to the Customs. It was answered, that too in the presence of the mahazar witnesses, stating that, they have not made any declaration and have voluntarily admitted of having brought gold in crude form in small quantities varying from 50 gms to 500 gms. With this background, the respondent / Customs ie., DRI officials started proceeding with the process of search and seizure. 27. In the mahazar, two individuals stood as independent witnesses. Only in the presence of the two mahazar witnesses, the entire search and seizure, according to the customs, was conducted. The Mahazar was drawn by an Intelligence Officer of DRI, Madurai Regional unit and the seizure was effected by another intelligence officer of DRI, Madurai Regional unit, in the presence of some of the DRI officials numbering more than 20. 28. In the show cause notice dated 29.06.2020, it is recorded by the Customs that all these passengers were given the option to be searched before a Magistrate or gazetted officer and the passengers chose to be searched in the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to obtaining alleged confession statement made under Section 108(3) of the Customs Act, it cannot be concluded that the episode as claimed by the Customs Department was actually taken place. 32. Only in this context, the petitioners were definite and very much particular that, these independent witnesses should be examined and cross examined. Also it is the case of the petitioners that, 20 more DRI officials or officers who were present or claimed to be present for the whole episode which took place for more than 26 hours from 05.11.2019 to 07.11.2019, either few of them should have been examined so that the statement made in the seizure mahazar could be corroborated or at least the concerned official or intelligence officer of DRI Madurai Regional Unit who was responsible for drawal of the mahazar and who was responsible for the seizure must have been examined. 33. The reason for such a demand made by the petitioners is that, except the two mahazar witnesses, and the intelligence officer who claimed to have drawn the mahazar and another intelligence officer who effected the seizure, no other persons were involved except the DRI officials who claimed to have been present. At l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... detail, some of the noted judgments cited by the learned Counsel on either side can be gone into. In this context, learned Counsel appearing for the petitioners, among various judgments they cited before this Court, are very particular about the few of them. The first judgment in this context, relied upon by the learned Counsel for the petitioners is one of the earlier decision of the Hon'ble Supreme Court reported in AIR 1961 SC 264 in the matter of Ambalal Vs. Union of India and others, where the learned Counsel relied upon the following: "6. This Court has held that a customs officer is not a judicial tribunal and that a proceeding before him is not a prosecution. But it cannot be denied that the relevant provisions of the Sea Customs Act and the Land Customs Act are penal in character. The appropriate customs authority is empowered to make an inquiry in respect of an offence alleged to have been committed by a person under the said Acts, summon and examine witnesses, decide whether an offence is committed, make an order of confiscation of the goods in respect of which the offence is committed and impose penalty on the person concerned ; see Sections 168 and 171-A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by him appears to the Sales Tax Officer to be incorrect or incomplete. It is only on the existence of one of these two conditions that the Sales Tax Officer gets the jurisdiction to make a best judgment assessment. The fulfillment of one of these two pre-requisites is, therefore, a condition precedent to the assumption of jurisdiction by the Sales Tax Officer to make assessment to the best of his judgment. Now, where no return has been submitted by the assessee, one of the two conditions necessary for the applicability of section 17, subsection (3) being satisfied, the Sales Tax Officer can, after making such inquiry as he may consider necessary and after taking into account all relevant materials gathered by him, proceed to make the best judgment assessment and in such a case, he would be bound under the proviso to give a reasonable opportunity of being heard to the assessee. But in the other case, where a return has been submitted by the assessee, the Sales Tax Officer would first have to satisfy himself that the return is incorrect or incomplete before he can proceed to make the best judgment assessment. The decision making process in such a case would really be in two stages, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or completeness of such return". Now, obviously "to prove" means to establish the correctness ,or completeness of the return by any mode permissible under law. The usual mode recognised by law for proving a fact is by production of evidence and evidence includes oral evidence of witnesses. The opportunity to prove the correctness or completeness of the return would, therefore, necessarily carry with it the right to examine witnesses and that would include equally the right to Crossexamine witnesses examined by the Sales Tax Officer. Here, in the present case, the return filed by the assessee appeared to the Sales Tax Officer to be incorrect or incomplete because certain sales appearing in the books of Hazi Usmankutty and other wholesale dealers were not shown in the book's of account of the assessee. The Sales Tax Officer relied on the evidence furnished by the entries in the books of account of Hazi Usmankutty and other wholesale dealers for the purpose of coming to the conclusion that the return filed by the assessee was incorrect or incomplete. Placed in these circumstances, the assessee could prove the correctness and completeness of his return only by showing that the entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any Gazetted Officer of customs 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 proceeding under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court." 31. A reading of the above provision would go to show that only in the circumstances enumerated in the said provision, the statement recorded under Section 108 of the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lish that the goods in question had been accounted for in their books of accounts, and that excise duty had been paid. The Court held that such a request could not be turned down, as the denial of the right to crossexamine, would amount to a denial of the right to be heard i.e. audi alteram partem. 26. In New India Assurance Company Ltd., v. Nusli Neville Wadia & Anr., AIR 2008 SC 876; this Court considered a case under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 and held as follows :- "45. If some facts are to be proved by the landlord, indisputably the occupant 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." (Emphasis added) In view of the above, we are of the considered opinion that the right of cross-examination is an integral part of the principles of natural justice. 27. In K.L. Tripathi v. State Bank of India & Ors., AIR 1984 SC 273, this Court held that, in order to sustain a complaint of the violation of the princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv Arora v. Union of India & Ors., AIR 2009 SC 1100, this Court held: "13. .... Effective cross-examination could have been done as regards the correctness or otherwise of the report, if the contents of them were proved. The principles analogous to the provisions of the Indian Evidence Act as also the principles of natural justice demand that the maker of the report should be examined, save and except in cases where the facts are admitted or the witnesses are not available for crossexamination or similar situation. 14. The High Court in its impugned judgment proceeded to consider the issue on a technical plea, namely, no prejudice has been caused to the appellant by such non-examination. If the basic principles of law have not been complied with or there has been a gross violation of the principles of natural justice, the High Court should have exercised its jurisdiction of judicial review." 30. The aforesaid discussion makes it evident that, not only should the opportunity of cross-examination be made available, but it should be one of effective crossexamination, so as to meet the requirement of the principles of natural justice. In the absence of such an opportunity, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to presuppose as to what could be the subject-matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came up before this Court in CCE v. Andaman Timber Industries Ltd.2, order dated 17-3-2005 was passed remitting the case back to the Tribunal with directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 8. In view of the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the show-cause notice." 42. Apart from relying upon the aforestated decisions, it is yet another vehement contention on the part of the petitioner side that two out of the 129 noticees at the earliest point of time had approached this Court by filing writ petitions in W.P.(MD)Nos.3917 & 3918 of 2020. In these writ petitions, the respective petitioners sought for a prayer of Mandamus to direct the respondents to allow re-export of the goods namely gold ornaments and electroni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Procedures, observed that a passenger going through the green channel is itself a declaration that he has no dutiable or prohibited articles. The respondents allege that the petitioners were intercepted when they were about to exit the green channel. The petitioners on the other hand claim that after the completion of immigration formalities and before crossing the DMFD, they were taken to custody. This controversy can be very easily resolved by production of the CCTV footage. The petitioners have not raised this contention as an afterthought. Right from the beginning this was their stand. Therefore, I impleaded the Airport Authority and directed them to make available the CCTV footage. The standing counsel for the Airport Authority after getting instructions submitted that since the occurrence had taken place in the 1st week of November, 2019, the footage got erased a few weeks thereafter and therefore, the direction issued by me in February, 2021 is impossible of being complied with. 12. The petitioners could have established their defence only by producing the CCTV footage. They have been denied access to this vital piece of evidence. The best evidence was very much avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned Standing Counsel for the Airport Authority after instructions submitted that since the occurrence had taken place in the first week of November, 2019, the footage got erased a few weeks thereafter and therefore, the directions issued by the learned Judge in February 2021, became impossible of being complied with. 46. After recording this aspect, learned Judge in paragraphs 12 & 13 made a strong observation and in fact at paragraph No.13 quoted hereinabove of the said order, learned Judge has gone to the extent of observing that, where the fundamental right of the noticees to fair adjudication has been violated, adjudication proceedings cannot be allowed to continue for the purpose of determining their guilt. In view of the said finding that the petitioners' defence had been prejudiced because of the nonproduction of the CCTV footage, the adjudication proceedings initiated against them can be allowed to continue only for the limited purpose of determining whether the goods in question can be allowed to be re-exported. This finding of the learned Judge to state that, the adjudication proceedings cannot be allowed to continue for the purpose of determining the guilt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be allowed to continue only for the limited purpose of determining whether the goods in question can be allowed to be re-exported. 49. Therefore, the said finding given in the order referred to above by the learned Judge can be made applicable only in respect of those two writ petitioners and therefore, in respect of their cases the adjudication is not conducted and it is kept pending. 50. Learned Standing Counsel would further submit that, apart from these two writ petitioners some other writ petitioners also had come before this Court challenging the adjudication proceedings on various grounds where also interim orders have been granted by this Court in other cases and in respect of those cases also the adjudication had not been continued and therefore, out of the 129 atleast 15 people in whose cases where specific orders either final or interim order have been passed, adjudication has not been continued and it has been kept pending awaiting the final orders to be passed. 51. Learned Standing Counsel would further submit that, even though the judgment passed by the learned Judge dated 26.04.2021 is the judgment in rem even in respect of those two noticees, since the Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been appended in the show cause notices dated 29.06.2020. 54. Moreover, the theory of judgment in rem and judgment in personum cannot be invoked in a case which emanates from the same cause of action differentiating the same in respect of every cases arising from the same cause of action. 55. The cause of action which arose in respect of all the 129 noticees is the search and seizure operation conducted on 05.11.2019 to 07.11.2019. Though an attempt has been made by the learned Counsel for Customs that though single mahazar has been drawn, in respect of all 129 people, each one will be dealt with separately, it can only be treated as a single episode otherwise all the 129 noticees cannot be put in under one seizure mahazar in the presence of the same two independent witnesses. 56. When that being so, the theory of judgment in personum which the Customs side want to employ on the judgment and observation made by the learned Single Judge in his order dated 26.04.2021, in my considered opinion, cannot be accepted. 57. No doubt, after 30.06.2021, when the Division Bench took cognizance of the issue and granted an interim order of stay of the operation of the Writ Court order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce he had been searched were not examined at the trial. Reliance was placed on an observation contained in paragraph 28 of the report in (2004) 12 SCC 201 State of West Bengal and Others Vs. Babu Chakraborthy. In the instant case it is not disputed that two independent witnesses were associated when the search was conducted. The search was, therefore, conducted in accordance with law. But it is argued that failure to examine the two witnesses is fatal to the case of the prosecution. In our view, this is not the correct legal position. Even where independent evidence is not examined in the course of the trial the effect is that the evidence of the official witnesses may be approached with suspicion and the Court may insist on corroboration of their evidence. In (2000) 4 SCC 465 Koluttumottil Razak Vs. State of Kerala this Court observed:- "In the present case, unfortunately, apart from the evidence of the police officers there is absolutely no independent evidence to ensure confidence in our mind that the search was in fact conducted by PW 1 as he has claimed. As his evidence is required to be approached with suspicion due to violation of Section 42 of the Act we may require corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quires to be given for the cross-examination of the witnesses as regards the place at which recovery was made. Since the dispute concerns the confiscation of the jewellery, whether at conveyor belt or at the green channel, perhaps the witnesses were required to be called. But in view of confession made by him, it binds him and, therefore, in the facts and circumstances of this case the failure to give him the opportunity to cross-examine the witnesses is not violative of principle of natural justice. It is contended that the petitioner had retracted within six days from the confession. Therefore, he is entitled to cross-examine the panch witnesses before the authority takes a decision on proof of the offence. We find no force in this contention. The Customs officials are not police officers. The confession, though retracted, is an admission and binds the petitioner. So there is no need to call panch witnesses for examination and cross-examination by the petitioner. 4. It is contended that under the Rules jewellery is exempted articles. Kara being a symbol of the religious wear by the Sikh community, it is a jewellery exempted from the Act and it cannot be confiscated. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other documentary evidences such as lab test report. Therefore, there is no need for the cross-examination of Clearing House Agent and Investigating Officers. Further, the appellant has adopted a systematic method of mis-declaring the weight to evade Anti Dumping Duty and the said fact was also admitted by the appellant in his statement dated 20.10.2008 and 03.11.2008. Further, the ADD is calculated based on the weight ascertained from the samples submitted by the appellant only. 10. At this juncture, though it cannot be denied that right of cross- examination in any quasi-judicial proceeding is valuable right given to the accused/noticee, as these proceedings may be adverse consequences to the accused, the Hon'ble Apex Court in the case of CCE Vs. Duncan Agro Industries, reported in 2000(120) ELT 280 (SC), has held that the right of cross-examination can be taken away. In yet another case, the Hon'ble Apex Court in the case of Surjeet Singh Chhabra Vs. Union of India reported in 1997(89) ELT 646 (SC), has again held that when the petitioner seeks for cross-examination of witnesses, who have said that the recovery was made from the petitioner, necessarily an opportun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case it is noted that it was a simple case of undervaluation of goods by the petitioner. 29. Therefore, statements were recorded from the petitioner's proprietor, his brother namely the 2nd petitioner, from 2 employees of the 2 CHA's of the petitioner. 30. They appear to have confirmed that there was variance between the value declared in import invoice and invoices in the case of contemporaneous import. 31. Statements obtained under section 108 of the Customs Act, 1962 are merely intended to facilitate investigation into alleged evasion of customs duty for the purpose of adjudication under the aforesaid Act. 32. The culmination of the investigation may not only result in issuance of a show cause notice under section 28 to demand customs duty short paid or short levied but also for confiscation, fine, penalty under Section 124 of the Customs Act, 1962. 33. Depending upon the gravity of the offence committed by a person, a criminal prosecution are initiated. 34. Though it was submitted that the statements recorded from the petitioners were retracted, I do not find any material on record. 35. Neither the petitioner nor the respondents have filed any of the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to record evidence under section 108 is to collect information of the contravention of the provisions of the Customs Act, 1962 or concealment of contraband or avoidance of duty of Excise so as to enable them to collect the evidence of the proof of contravention of the provisions of the act for initiating proceedings for further action of confiscation of the contraband or imposition of penalty under the Act etc. 44. Section 108 of the Customs Act, 1962 reads as under:- "108. Power to summon persons to give evidence and produce documents. - [(1) Any Gazetted Officer of customs 14 shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under this Act.] (2) A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned. (3) All persons so summoned shall be bound to attend either in person or by an authorised agent, as such officer may direct; and all pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the emerging position on analysing these judgments would be that, in a particular case whether such a chance of cross examination should be given or not can be decided only at the background of the facts of that particular case. 64. In this context, after analysing a number of judgments in this regard, the learned Judge of this Court in Jet Unipex case was able to draw a fine distinction between these two situations as to when such a cross examination should be given and when not. 65. The learned Judge in sum and substance has held that, if statements were received or recorded and not intended for corroboration of independent evidence, cross examination need not be allowed, which means, if unassailable evidences are already available and in order to corroborate the same, further evidences are not employed by making statements or giving evidence, such kind of evidences need not be permitted to be retracted by cross-examining the persons from whom such evidences has emanated. Therefore, the natural corollary would be that, in case the whole part of evidence is only based on the statement or otherwise of the noticees which were recorded under Section 108(3) of the Act, and the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der sub-section 2 of Section 138-B, the provisions of sub-section (1) shall so far as may be, apply in relation to any proceedings under the Act other than a proceeding before a Court, as they apply in relation to a proceeding before a Court. 69. By relying upon heavily on this provision, the learned Standing Counsel would submit that, the confession statement were made by these noticees on various dates before the Customs officers and the same since have been recorded under Section 108(3) of the Act and the statement since is a signed statement, and given before the gazetted officer of the Customs during the enquiry, it has relevance and would apply not only to the criminal proceedings but also in adjudicatory proceedings under the Act. 70. However, in response to the said argument advanced by the Customs side, learned Counsel appearing for the petitioners would contend that, no doubt, under Section 138-B, the statement given as has been stated in sub-section (1) would be made applicable and will be relevant both in the criminal proceedings as well as in the adjudicatory proceedings under the Act provided the conditions mentioned in Clause (a) & (b) in sub-section 1 of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in every stage of search and seizure these independent witnesses were present. When that being so, the proprietary requires that, the adjudicating authority should have issued summons to these independent witnesses to corroborate the statements ie., the mahazar. Unless and until the basic fact of mahazar is corroborated by two independent witnesses, whether the veracity can be automatically admitted in favour of the Customs is yet another question for which this Court at this moment do not want to make any comment. However, for the limited purpose of giving the chance of cross examination to the petitioners atleast that attempt should have been made by the Customs to bring those independent witnesses during the adjudication proceedings and made them available for such examination / cross examination. 77. It was yet another argument which the learned Standing Counsel appearing for the respondents made is that, if at all any chance of cross examination was asked by the petitioners and the same was denied and the adjudicatory authority proceeded to adjudicate the matter, it amounts to denial and therefore, such denial is a decision and such decision made by the adjudicating authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of cross examination should be given to the petitioner or not as a preliminary issue and rendered a finding, giving an order to that effect, certainly the arguments advanced by the learned Counsel for the respondents can be accepted and an appeal can be filed. However, in the case in hand, that issue has not at all been considered and decided, but the adjudicating authority proceeded to complete the adjudication on whole merits of the case and passed a final order. Therefore, the arguments advanced by the learned Standing Counsel on the side of the respondent on this aspect is also not countenanced. 82. Insofar as the issue raised on the point of Section 138-B of the Act is concerned, atleast two judgments have been relied upon by the learned Counsel appearing for the petitioners. 1) 2011 SCC online Madras 2634; 2011 272 ELT 497 [Union of India Vs. A.S.A. Kabir], where paragraphs 29, 30 & 31 has been relied upon which have been quoted hereinabove. 2) 2017 (48) S.T.R. 427 (Del.), in the matter of Basudev Garg Vs. Commissioner of Customs, where, the following paragraphs have been relied upon: "9. We have considered both the aspects of the matter and have heard counsel of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court." 11. We may straightaway say that the provisions of Section 9D of the Central Excise Act, 1944 are identical to the provisions of Section 138B of the Customs Act, 1962 which would be applicable in the present case. 12. Section 138B of the Customs Act, 1962 reads as under:- "138B. Relevancy of statements under certain circumstances -(1) A statement made and signed by a person before any gazette officer of customs during the course of any inquiry or proceeding under this Act shall be relevant for the purpose of proving, an 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 regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or whose presence cannot be obtained without an amount of delay and expense which, under the circumstances of the case, the Court considers unreasonable. It is clear that unless such circumstances exist, the Noticee would have a right to cross- examine the persons whose statements are being relied upon even in quasi- judicial proceedings. The Division Bench also observed as under:- "29. Thus, when we examine the provision as to whether the provision confers unguided powers or not, the conclusion is irresistible, namely, the provision is not uncanalised or uncontrolled and does not confer arbitrary powers upon the quasi judicial authority. The very fact that the statement of such a person can be treated as relevant only when the specified ground is established, it is obvious that there has to be objective formation of opinion based on sufficient material on record to come to the conclusion that such a ground exists. Before forming such an opinion, the quasi judicial authority would confront the assessee as well, during the proceedings, which shall give the assessee a chance to make his submissions in this behalf. It goes without saying that the authority would record reasons, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ross-examination, if the noticee makes a request for cross-examination of the person whose statement is relied upon in the SCN. During investigation, a statement can be fortified by collection of corroborative evidence so that the corroborative evidence support the case of the department, in cases where crossexamination is not feasible or the statement is retracted during adjudication proceedings. It may be noted retracted statement may also be relied upon under given circumstances. Frivolous request for cross-examination should not be entertained such as request to cross examine officers of CERA." 86. The circular also proceeds to say in clause 19 and 20.2 which reads thus: "19. Powers of recovery: Recovery of confirmed demand can be made by exercising any of the powers under Section 11 of the CEA, 1944 such as adjustment from refunds payable, attachment and sale of excisable goods of such person or through certificate action treating the recoverable amounts as arrears of land revenue. After exhausting the option of taking action as above, if dues remain unrecovered, action is to be taken under the provisions of Section 142 of the Customs Act, 1962 which have been made applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents that this Master Circular is only meant for Excise Department and it cannot be applied to the cases or adjudication conducted or to be conducted by the Customs Department governed under the provisions of the Customs Act, if we look at clause 20.2 as quoted hereinabove, we can easily cull out that, the Board which is a common Board for Customs and Central Excise as pari materia deal with Sections 35-F of the Central Excise Act and Section 129-E of the Customs Act, where in sub-clause 3 of Clause 20.2 they specifically stated that, in case of any short-payment or non-payment of the amount stipulated under Section 35-F of the Central Excise Act or Section 129-E of the Customs Act, the appeal filed is liable for rejection. 88. Moreover, the copy of the first page of the original circular has been made available taken from the website of the Board where it is made clear that, the circular has been despatched to the Principal Chief Commissioner and Chief Commissioner of Central Excise as well as the Principal Chief Commissioner of Customs. Therefore, for a general principle to be administered in various circumstances, both under the Excise Act as well as the Customs Act the mand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were passed. 93. Though in this aspect a point has been raised by the learned Standing Counsel for the respondent that to meet the limitation period that the respondent had to rush upon to complete the adjudication proceedings, the said defence taken by the Customs Department through the learned Standing Counsel also cannot be accepted as the factual matrix insofar as limitation is concerned is very well saved and available for the Customs to wait for some more time. 94. Moreover, assuming that the Customs Department has taken the judgment dated 26.04.2021 as a judgment in personum applying only in respect of those two writ petitioners, in respect of other noticees they can proceed with the adjudication, but the other parameters to follow should have been strictly followed. 95. Here in the case in hand, the cross examination chance which is one of the integral facet of the natural justice principle since has been specifically denied, this Court feels that on that ground the impugned orders certainly get vitiated. 96. In that view of the matter, for the limited purpose of remanding the matters for re-adjudication to the respondents Customs, this Court feels that the impugned or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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