Natural justice in customs penalty matters requires cross-examination when an inculpatory statement is relied upon.

An adjudication order imposing penalty under the Customs Act cannot be sustained where it substantially relies on an inculpatory statement of the appellant and the requested cross-examination of the recording officer and connected witnesses is denied. Such denial breaches natural justice and renders the adjudication procedurally defective. No pre-conceived bias was found against the adjudicating authority, but the order was nevertheless set aside and the matter remitted for fresh adjudication with the requested cross-examination opportunity.

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Issues: Whether an adjudication order imposing penalty under the Customs Act can be sustained when it relies on an inculpatory and confessional statement of the appellant without affording cross-examination of the recording officer and connected witnesses.

Analysis: The order rested substantially on the appellant's statement. Where such a statement is relied upon against the appellant, and cross-examination of the officer who recorded it and the connected witnesses is specifically sought, denial of that opportunity offends the principles of natural justice. The absence of cross-examination rendered the adjudication procedurally defective, though no pre-conceived bias on the part of the adjudicating authority was found.

Conclusion: The impugned order was set aside and the matter was remitted for fresh adjudication after affording the appellant the requested opportunity of cross-examination.

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