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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 ..... ly with clause (a) of Section 138-B (1) is a question, where, there is no such attempt seems to have been made and no summons have been given to these two independent witnesses and even the mahazar drawn officer and the seizure officer who signed in the mahazar were not made present before the adjudicating officer or made available before the adjudicating officer for examination - In the absence of any such attempt being made by the respondent Customs to bring the person who made the statement, it cannot be stated that the contingency noted at clause (a) have been complied with in this case. Therefore, the relevancy or admissibility of the statement is questionable in this case. In the facts of the case, the entire case has been built up based on the single seizure mahazar, wherein, each and every aspect, according to the mahazar, was done only in the presence of the independent witnesses. They also claimed that, even after the seizure was completed the entire goods seized were kept in 5 boxes and in each of the boxes these independent witnesses signed and in every stage of search and seizure these independent witnesses were present. When that being so, the proprietary requires ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been indicated in Clause 14.9 of the Master Circular can be considered to be an apt direction in the given circumstances of the case. 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. 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 orders can be interfered with - the matters are remitted back to the respondents for re-adjudication. While making readjudication, the observations as stated shall be borne in mind by the adjudicatory authority where fair opportunity of cross-examination to cross examine the witnesses, especially the two independent mahazar witnesses and two Intelligence Officers of DRI who are responsible for drawal of mahazar and the seizure of the goods atleast shall be made available to the petitioners for cross-examination. After giving such chance of crossexamination, it is open to the adjudicatory authority to complete the adjudication proceedings and pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners, they arrived in various flights either on 05.11.2019 or 06.11.2019 or in the early hours on 07.11.2019. After completion of the immigration formalities, when the petitioners were waiting in a que to cross the Door Frame Metal Detector [DFMD] kept after the immigration counters to enter into the arrival halls, the officials of the third respondent i.e., DRI were examining the baggages of the passengers who arrived from various destinations and the passengers who arrived from Singapore as well as from Dubai were part of the que. 5. The checking of hand baggages and travel bags were undertaken before the DFMD itself and the third respondent did not provide any Customs declaration form nor made any attempt to note down any oral declaration. Though these petitioners had brought some gold or gold ornaments, which according to the petitioners, they brought it after purchasing the same in the countries where they travelled, and when they were about to declare the same, even before entering into the Customs counter ie., before the Door Frame Metal Detector [DFMD], since they were intercepted by the DRI officials, there was no chance for these petitioners to declare so. 6. Therea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners, no proper procedure in tune with the principles of natural justice was adopted by the respondents and in this regard, though specific request was made by them to give a chance of cross examination of the mahazar witnesses as well as the DRI officials, who alone were involved in the entire episode and no Customs officials were involved in that, such a chance of cross examination was denied to the petitioners. 10. As an offshoot, it is the further case of the petitioners that, at least two passengers out of the total 129 had already approached this Court and filed writ petitions in W.P.(MD)Nos.3917 3918 of 2020, with a prayer to permit them to re-export the seized goods and when that issue was pending before this Court, and subsequently, when the same was decided, by order of the learned Judge of this Court dated 28.04.2021, though a strong view has been taken by the Writ Court as against the way in which the Customs acted upon by denying the opportunity, stay was granted in the writ petitions, and in order to prove their innocence as the CCTV footage, on the airport though was suo motu sought for by the writ Court in that writ petition, the same was not produced becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HE PETITIONER SIDE: 13. Heard Mr. B. Satish Sundar and Mr. A. Ganesh, learned Counsels appearing for the petitioners. 14. Leading the arguments, Mr. Satish Sundar, learned Counsel appearing for some of the petitioners has broadly made the following submissions: a) At the time of making this adjudication and passing the order after adjudication, the findings given by the Writ Court in W.P.(MD)Nos.3917 3918 of 2020 has been in force. Therefore, in view of the categorical finding given by the Writ Court that, adjudication proceedings cannot be allowed to continue for the purpose of determining their guilt, the respondents ought not to have proceeded with the adjudication. b) Though subsequently, the order dated 28.04.2021 of the Writ Court was appealed by the Customs, where an interim order of stay was granted by the Division Bench of this Court by order dated 30.06.2021, that would not justify the action on the part of the Customs to complete the adjudication process well before the interim order of stay granted by the Division Bench. c) Since the principles of natural justice is the fundamental facet of every adjudication process, quasi-judicial proceedings, in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods seized during the course of search shall be prepared by such officer or other persons and signed by such witnesses. Insofar as this provision is concerned, whether the ingredients which have been stated in sub-section 4 of Section 102 have been scrupulously followed in this case itself is a question and therefore, on that ground itself, the very search and seizure made by the Customs department against the petitioners is bad in law. 16. By making these broad submissions and grounds of attack assailing the impugned order, learned Counsel for the petitioners have relied upon number of decisions in support of the case of the petitioners. The following cases were cited by the petitioners' side: Sl. No. Judgments 1. Judgment of Hon'ble Supreme Court in Ambalal Vs. Union of India (1961) 1 SCR 933 2. Judgment of Hon'ble Supreme Court in State of Kerala Vs. K.T. Shaduli Grocery Dealer (1977) 2 SCC 777 3. Judgment of Hon'ble Supreme Court in Shree Chamundi Mopeds Ltd. Vs. Church of South India Trust Associa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets 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 various flights. Two out of the 129 passengers, well before the commencement of the adjudication proceedings, approached this Court and got a findings in their favour, where, this Court has categorically stated that, the adjudication proceedings cannot be allowed to continue for the purpose of determining their guilt, hence the Customs should have been with self-restraint in proceeding further in these adjudication matters, unless they erase such finding, which attempt though they made by filing intra-court appeal only subsequently. 19. On the date of adjudication and passing of impugned orders, the findings given by the Writ Court as referred to above were very well available and even in the show cause notice issued by the respondent, they have mentioned that, this show cause notice is subject to the outcome of the decision to be made in pending Writ Petition Nos.3917 3918 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 particular day at Trichy airport and since the passengers were arriving in at least four flights originating from various destinations, more number of DRI officials were required. Therefore, more than 24 officers were gathered and this operation of search was conducted. During the search, the procedure as contemplated under Section 102(4) of the Act has been scrupulously followed and after giving a chance to every passenger of the whole 129, that whether they can be searched in front of the gazetted officer or to be taken to a nearest Magistrate, after getting their consent, search was completed and it was found that each of the 129 passengers brought gold, silver and other electronic items. With that, since they made an attempt to cross the green channel, they were intercepted and the said search was completed and the goods they brought were seized through mahazar wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 of this Court under Article 226 of the Constitution of India cannot be invoked. Therefore, since the petitioners admittedly having not exhausted the appeal remedy, since have challenged the adjudication order, on that ground even the writ petitions can be rejected, relegating the petitioners to approach the appellate authority. i) Insofar as the drawal of single mahazar is concerned, since there is no express prohibition available in any of the provisions of the Customs Act that, such single mahazar cannot be drawn, there is absolutely no impediment for the Customs to draw a single mahazar, that too in the given circumstances where, the entire episode taken place had been explained by the Customs. 22. By making these broad submissions, the learned Standing Counsel appearing for the Customs Department relied upon the following decisions: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Natwarlal Damodardas Soni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view that the petitioners in that case are not innocents. The said finding also would squarely apply to all such noticees including these petitioners. Therefore, merely because of the non-production of the CCTV footage for which the custodian is Airport Authority of India with whom the Customs Department 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 impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the officers on arrival at the airport at 22:15 hours on 05.11.2019, waited at the Customs arrival hall and the passengers arriving from the aforesaid flights were about to exit the green channel were verified with their passport and certain passengers were enquired, who on enquiry, detailed in the annexure to the 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 Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il the two independent witnesses, in whose presence it was claimed by the Customs that every action was taken ie., search as well seizure, are brought before the adjudicating authorities to depose, in order to corroborate what has been stated in the seizure mahazar which was the only document available for the Customs prior 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 examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, since cross examination is one of the integral part of the adjudication or trial process wherein such chance shall be given to the person who seek for such cross examination and if such a chance is denied that would be one of the ground to treat the proceedings as a vitiated one. 37. In order to delve into this issue in further 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been submitted, to prove the correctness or completeness of such return. It is clear on a plain natural construction of the language of this provision that it empowers the Sales Tax Officer to make a best judgment assessment only where one of two conditions is satisfied: either no return is submitted by the assessee or the return submitted 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 oppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return submitted by the assessee is incorrect or incomplete so as to warrant the making of a best judgment assessment. The question is what is the content of this provision which imposes an obligation on the Sales Tax Officer to give and confers a corresponding right on the assessee to be afforded, a reasonable opportunity to prove the correctness 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , is not admissible in evidence. 30. The learned Special Public Prosecutor would also submit that the said statement is not admissible in evidence. For this purpose I may refer to Section 138-B of the Customs Act, which reads as follows:- 138-B. Relevancy of statements under certain circumstances.-(1) A statement made and signed by a person before 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25. In Lakshman Exports Ltd. v. Collector of Central Excise, (2005) 10 SCC 634, this Court, while dealing with a case under the Central Excise Act, 1944, considered a similar issue i.e. permission with respect to the cross-examination of a witness. In the said case, the assessee had specifically asked to be allowed to crossexamine the representatives of the firms concern, to establish 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can therefore, do so by cross- examining the witnesses produced against him. The object of supplying statements is that, the government servant will be able to refer to the previous statements of the witnesses proposed to be examined against him. Unless the said statements are provided to the government servant, he will not be able to conduct an effective and useful cross-examination. 29. In Rajiv 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 v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opportunity of cross examination. That apart, the adjudicating authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list could be the subject-matter of cross-examination. Therefore, it was not for the adjudicating authority 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned Judge has further observed in paragraphs 11, 12 13 which are very much relied upon by the petitioners' side. Therefore, the said paragraphs of the learned Judge's order is extracted hereunder: 11. The Supreme Court in the decision reported in 2017 (16) SCC 93 (Directorate of Revenue Intelligence Vs. Pushpa Lekhumal Tolani), quoting International Convention on the Simplification and Harmonization of Customs 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 instr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resolve the controversy whether the noticees had crossed or attempted to cross the Customs barrier through green channel or they simply moved towards the Customs counter and even before they crossed the metal detector door frame whether they were intercepted or not as claimed by the noticees can be easily ascertained if the CCTV footage of the airport is produced and therefore, though the learned Judge directed to produce the CCTV footage, 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 fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose Counsel stated that it got erased within few weeks of the date of occurrence of the incident and only in that circumstances, the learned Judge has drawn adverse inference only in the cases in respect of those two writ petitioners where, after making such an observation in paragraph 13 as quoted above, that the adjudication proceedings cannot be allowed to continue for the purpose of determining their guilt, it was also observed that, but 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it Court would not be made or cannot be made applicable to the other noticees, that kind of note need not have been appended in the show cause notices dated 29.06.2020. Therefore, it clearly discloses or demonstrates that, it is in the minds of the Customs that whatever order to be passed by the Writ Court in the pending two writ petitions definitely will have a bearing on the whole issue covering all 129 noticees and that is the reason why such a note has 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a must or not depends upon the factual matrix of the case. 59. In this context, out of several judgments relied upon by the respondent Counsels, the learned Standing Counsel for Customs mainly relied upon the following two decisions : 1) Ravindran @ John Vs. The Superintendent of Customs reported in 2007 (6) SCC 410, where he relied upon the following paragraphs: 11. Learned counsel for the appellant argued that the two independent witnesses in whose presence 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.), where he relied upon the following: 3. It is true that the petitioner had confessed that he purchased the gold and had brought it. He admitted that he purchased the gold and converted it as a Kara. In this situation, bringing the gold without permission of the authority is in contravention of the Customs Duty Act and also FERA. When the petitioner seeks for crossexamination of the witnesses who have said that the recovery was made from the petitioner, necessarily an opportunity requires 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payment of legitimate Anti Dumping Duty. Surprisingly, this statement, which was given voluntarily, neither retracted by the appellant nor contradicted or disproved by placing evidences subsequent to his voluntary statement. On the question of allowing appellant to cross-examine the Clearing House Agent and Investigating Officers, it is pertinent to bear in mind that the case has been clearly made out by the investigation based on the voluntary statement of Shri Sanjay H.Shah, Proprietor of M/s. Edge 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 advers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the learned Judge of this Court in the case of Jet Unipex Vs. Commissioner of Customs reported in 2020 (373) E.L.T. 649 (Mad.) was also relied upon by the learned Counsel for the Customs. In this decision, learned Counsel relied on the following observations: 27. I have considered the arguments advanced on behalf of the petitioner and the respondents. I have also perused the show cause notice and documents filed along with the writ petition. 28. From the overall facts and circumstances of the present 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 investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain statements of the petitioners particularly the one referred to in paragraph 12 of the show cause notice seems to indicate that there were admissions by the petitioner regarding undervaluation and that there were cash transactions in the past to evade customs duty. 42. At the same time, it is also evident that the 2nd respondent s have recovered several of the documents during the course of investigation which form the basis of proposals in the show cause notice. 43. As mentioned above, the object of empowering an officer of the customs department 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is therefore not applicable to such statements. 62. The aforecited judgments on this point as to whether the chance of cross examination has to be mandatorily given to the parties or noticees concerned have been gone through. Infact two major set of views have been taken by the law Courts. One set of view is that the chance of cross examination if it is not given or denied, that will vitiate the proceedings and another set of view is even though such a chance is not given to the parties / noticees, that may not be fatal to the proceedings or the proceedings is not vitiated. 63. Therefore, 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation part is denied whether it will be fatal to the case is concerned, in the present case, unless these four people come and corroborate before the adjudicating authority to state that they were part of the episode during the search and seizure, it is very hard to accept the version that has been projected on behalf of the Customs. 68. During the course of arguments, it was also pointed out that, under Section 138-B of the Act, whatever the statement made and signed by the person before any gazetted officer of Customs during the course of any enquiry or proceedings under the Act shall be relevant. Under 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 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson who made the statement, it cannot be stated that the contingency noted at clause (a) have been complied with in this case. Therefore, the relevancy or admissibility of the statement is questionable in this case. 76. In the facts of the case as we quoted above, the entire case has been built up based on the single seizure mahazar, wherein, each and every aspect, according to the mahazar, was done only in the presence of the independent witnesses. They also claimed that, even after the seizure was completed the entire goods seized were kept in 5 boxes and in each of the boxes these independent witnesses signed and 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 chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances of each case. 79. Absolutely, there can be no quarrel on the said observation made by the Division Bench, which, in my considered view, is, in fact in favour of the petitioners. 80. As rightly opined by the Division Bench, there is no straitjacket formula on the principle as to whether the chance of cross examination is a must or not, as it depends upon the facts of each of the case. 81. Moreover, insofar as the request of cross examination is concerned, it has not been specifically denied by giving any order in writing by the adjudicating authority. Had the adjudicating authority decided the issue as to whether chance 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is dead or cannot be found, or is incapable of giving evidence, 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 interest of justice. (2) The provisions of subsection (1) shall, so far as may be, apply in relation to any proceedings 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight of cross-examination in any quasi judicial proceeding is a valuable right given to the accused/Noticee, as these proceedings may have adverse consequences to the accused, at the same time, under certain circumstances, this right of crossexamination can be taken away. The court also observed that such circumstances have to be exceptional and that those circumstances have been stipulated in Section 9D of the Central Excise Act, 1944. The circumstances referred to in Section 9D, as also in Section 138B, included circumstances where the person who had given a 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 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar dated 10.03.2017 where 89 earlier circulars issued by the Board have been rescinded and this Master Circular was issued. Though the said circular was issued primarily for the purpose of administration of Central Excise Act, 1944 as contended by the learned Counsel appearing for the respondents, certain aspects mentioned in the Master Circular can be pressed into service in the present case. In clause 14.9 under the heading 'Corroborative evidence and Cross-examination', the circular states as follows: 14.9. Corroborative evidence and Crossexamination: Where a Statement is relied upon in the adjudication proceedings, it would be required to be established though the process of cross-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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of the amount stipulated under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962, the appeal filed is liable for rejection. (iv) Section 35F of the Central Excise Act, 1944 has been amended with effect from 6.8.14 to provide for mandatory payment of 7.5% or 10% of the duty demanded where duty demanded is in dispute or where duty demanded and penalty levied are in dispute for admission of appeal before Commissioner (Appeals) or CESTAT. Once the amount is paid, no coercive action shall be taken for recovery of the balance amount during the pendency of the appeal proceedings before these authorities. 87. Though it was argued by learned Counsel appearing for the respondents 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion process went on unmindful of the order passed by the Writ Court as indicated above dated 26.04.2021, which was available or in force where the Customs also did notice the same and appended their note in the show cause notice itself, the proprietary requires that the Customs authorities should have waited for some time in the first fold. 92. Assuming that on 30.06.2021, if they were able to get a stay order from the Division Bench staying the operation of the order of the Writ Court, no doubt the Customs authorities should have waited for some time and granted opportunity to all the noticees including these petitioners. However, in this case there was no such chance as before 30.06.2021, adjudication was over and orders 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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