Cross-examination of Section 108 statements is required when relied on as evidence, or natural justice is violated.

Where statements recorded under Section 108 of the Customs Act, 1962 are relied upon as material evidence in adjudication, fairness requires the noticee to be given an opportunity to test those statements through cross-examination. A blanket denial of cross-examination cannot be justified merely because the evidence was recorded under Section 108, and prior authorities do not support such a general exclusion. The denial of cross-examination was treated as contrary to principles of natural justice, and the adverse order was set aside with a direction to permit cross-examination before fresh adjudication.

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Issues: Whether denial of cross-examination of witnesses whose statements recorded under Section 108 of the Customs Act, 1962 were relied upon in the adjudication order violated principles of natural justice.

Analysis: The statement evidence relied upon in the adjudication formed the basis of the adverse order against the petitioners. The cited authorities did not support a blanket denial of cross-examination in every case merely because statements were recorded under Section 108 of the Customs Act, 1962. Where such statements are used as material evidence against a noticee, fairness requires an opportunity to test them by cross-examination, and the adjudicating authority's reliance on the earlier decisions was found to be misplaced.

Conclusion: The denial of cross-examination was held to be contrary to principles of natural justice, and the impugned order was set aside with a direction to afford the petitioners an opportunity to cross-examine the witnesses before proceeding afresh.

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