Cross-examination of Customs statements depends on whether adjudication rests solely on section 108 evidence or on independent proof.

Statements recorded under section 108 of the Customs Act may be used in adjudication as primary material or as corroboration of independent evidence. Where the department seeks to sustain the demand solely on such statements, fairness and natural justice require cross-examination. If the adjudicating authority relies instead on independent documentary and contemporaneous evidence, cross-examination is not mandatory. On the facts, no coercion, detention, or proved retraction was established, and the request to cross-examine the officers who recorded the statements failed because no such officer statements existed. The petitioners were therefore not granted an unconditional right to cross-examine, and the authority was directed to decide whether reliance would be placed solely on the section 108 statements.

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Issues: Whether the petitioners were entitled, at the stage of adjudication under the Customs Act, 1962, to insist on cross-examination of the persons whose statements were recorded under section 108, and whether refusal of such request vitiated the proceedings.

Analysis: Statements recorded under section 108 are collected for investigation and may form part of the material for issuance of show cause notice and adjudication. Such statements can be relied upon either as primary material or as corroboration of independent evidence. If the department proposes to confirm the demand solely on the basis of such statements, cross-examination becomes necessary in view of the requirements of fairness and natural justice. If, however, the adjudicating authority relies on independent documentary and contemporaneous evidence, the statements may be used only as corroborative material and cross-examination is not mandatory. On the facts, the record did not establish coercion, detention, or a proved retraction so as to attract the safeguards urged by the petitioners. The request for cross-examination of the officers who recorded the statements was also not accepted, as no such statements of the officers existed.

Conclusion: The petitioners were not granted an unconditional right to cross-examine at this stage. The adjudicating authority was directed to decide whether it would rely solely on the section 108 statements, in which event cross-examination would have to be afforded, or whether it would proceed on independent evidence, in which event cross-examination would not be necessary.

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