Natural justice in customs adjudication requires cross-examination of adverse witnesses; denial vitiates confiscation and penalty orders.

Quasi-judicial customs adjudication under the Sea Customs Act must conform to natural justice. Where witness statements were recorded in the absence of the affected party and, despite request, the witnesses were not produced for cross-examination, the affected party was denied a fair opportunity to meet the evidence. The statutory power to impose confiscation and penalty did not displace the duty of fair hearing. The resulting confiscation and penalty order was therefore invalid for breach of natural justice and liable to be set aside.

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Issues: Whether the confiscation and penalty order passed in customs proceedings was vitiated for violation of the principles of natural justice because the witnesses were examined behind the petitioners' back and they were denied an opportunity to cross-examine them.

Analysis: The enquiry under the Sea Customs Act was held to be quasi-judicial in character and was required to conform to the principles of natural justice. The record showed that the statements of the witnesses were recorded in the absence of the petitioners and that, despite request, they were not produced for cross-examination. The mere fact that the statute empowered the authority to adjudge confiscation and penalty did not dispense with a fair hearing. The governing principle was that, in such proceedings, the party affected must be given an opportunity to meet the evidence against him, including the chance to cross-examine adverse witnesses.

Conclusion: The impugned confiscation and penalty order was invalid for breach of natural justice and was liable to be set aside in favour of the petitioners.

Ratio Decidendi: In quasi-judicial customs adjudication, denial of a fair hearing, including denial of cross-examination of adverse witnesses, violates natural justice and vitiates the resulting order.

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