Cross-examination in duty demand cases is essential when allegations rest mainly on statements and private records; remand followed.

Duty demand and confiscation founded substantially on statements of sub-contractors and handwritten records could not be sustained without allowing cross-examination of the persons whose statements and entries formed the basis of the allegations. The record disclosed no independent corroboration, such as evidence of raw material procurement, use of dyes or chemicals, transport of alleged clandestine removals, or customer statements. Denial of cross-examination in these circumstances breached the principles of natural justice and vitiated the adjudication. As the second matter arose from the same factual matrix and depended on the first, both matters required remand for de novo adjudication after cross-examination.

---

---

Issues: Whether the duty demand and confiscation based principally on statements of sub-contractors and handwritten records could be sustained without allowing cross-examination of the persons whose statements and entries formed the basis of the allegations, and whether the matters required remand for fresh adjudication.

Analysis: The demand in the first matter rested on the statements of four sub-contractors and on the contents of file No. 73, with no independent corroboration such as evidence of raw material procurement, use of dyes or chemicals, transport of the alleged clandestine removals, or statements of customers. In such a situation, cross-examination of the persons whose statements and records formed the foundation of the case was essential to test the correctness of the allegations and the denial of that opportunity amounted to breach of the principles of natural justice. The second matter arose from the same factual matrix and its adjudication was dependent on the first matter.

Conclusion: The demands could not be upheld on the existing record and both matters had to be remanded for de novo adjudication after permitting cross-examination.

Ratio Decidendi: Where a duty demand is founded substantially on recorded statements and private documents, denial of cross-examination of the authors and deponents vitiates the adjudication for breach of natural justice.

---