2022 (12) TMI 99 - AT - Customs

Customs duty evasion appeal emphasizes right to cross-examine witnesses for fair adjudication process

The case involved allegations of mis-declaration of imported goods to evade customs duty, leading to a challenge of the initial penalty imposed. The ... Seeking remand of the case - cross-examination of witnesses - Mis-declaration of goods being imported - request of remand is for the purpose of seeking opportunity to cross-examine the witnesses based on whose statement the appellant has been penalized - Section 138B of Customs Act, 1962 - HELD THAT:- Apparently and admittedly, the adjudicating authority has placed considerable reliance on the statement of the Directors of CHA M/s. Him Logistics Ltd. namely Shri Prakash Chand Sharma and Shri Ashok Sharma and also on the statement of the proprietor for the importer company namely Shri Naresh Kumar Jha. In the given circumstances, specifically when there is no statement of the appellant which may from any stretch of imagination be considered as a confession of the appellant, the right to cross-examination was a basic right rather originating out of principles of natural justice. There is nothing on record to indicate that any prejudice would be caused to the department by providing appellant a right to cross-examination. There is not retraction by any of the the three witnesses whose cross-examination has been prayed for. In the given circumstances and keeping in view the mandate of the statute as has been directed by the Hon’ble Apex Court to be strictly followed in all adjudications, where there appears the violation of the right to natural justice, it is deemed fit case to be remanded back again to the original adjudicating authority with the direction that three of the witnesses namely Shri Naresh Kumar Jha, Shri Prakash Chand Sharma and Shri Ashok Sharma be once again summoned and an opportunity be afforded to the appellant to cross-examine three of the said witnesses. Appeal allowed by way of remand. Issues:1. Allegations of mis-declaration of imported goods to evade customs duty.2. Validity of penalties imposed under Customs Act, 1962.3. Request for remand to cross-examine witnesses.4. Interpretation of Section 138B of Customs Act, 1962.5. Application of principles of natural justice in cross-examination rights.Analysis:1. The case involves allegations of mis-declaration of imported goods to evade customs duty based on intelligence received, leading to detention of goods and issuance of a Show Cause Notice proposing duty recovery, interest, and penalties under the Customs Act, 1962. The initial penalty imposed was challenged, resulting in a remand for fresh adjudication due to disproportionate penalty amount compared to the duty involved.2. During the appeal hearing, the appellant argued that the investigation was manipulative, claiming non-receipt of summonses and lack of personal statements or recovered documents. The case relied heavily on third-party evidence, with no opportunity granted for the appellant to cross-examine the witnesses. The appellant sought a remand to cross-examine the witnesses to ensure fair proceedings.3. The issue of remand for cross-examination of witnesses was crucial, with the Department not objecting to the remand for this purpose. The appellant's right to cross-examine witnesses under Section 138B of the Customs Act, 1962 was highlighted, emphasizing the importance of this right as a fundamental aspect of natural justice.4. The interpretation of Section 138B, similar to Section 9D of the Central Excise Act, was discussed, citing relevant case law emphasizing the importance of the right to cross-examine witnesses in quasi-judicial proceedings. The judgment stressed the need for exceptional circumstances to deny this right, ensuring a fair and just process for all parties involved.5. Considering the lack of appellant's statement amounting to a confession and the absence of retractions by the witnesses, the judgment concluded that the appellant should be granted the opportunity to cross-examine the witnesses for a fair adjudication process. The case was remanded back to the original adjudicating authority with a directive to conclude the proceedings within a specified timeframe, upholding the principles of natural justice and fair procedure.In conclusion, the judgment allowed the appeal by way of remand, emphasizing the importance of the appellant's right to cross-examine witnesses and ensuring a fair and just adjudication process in line with statutory provisions and legal principles.