2023 (6) TMI 557 - HC - Customs

Court Orders New Hearing for Fair Adjudication in Customs Case; Protects Noticees' Rights Against Unjust Procedures.

Commissioner Of Customs, Airport And Admn. Kolkata Versus Shri Himadri Chakraborty, Rahul Ranjan, Shri Kislay, Girish Sharma, Sujay Kumar Sarkar, M/s. Aai Cargo Logistic And Allied Services Company Limited

The HC directed a fresh adjudication in a case involving the refusal to allow cross-examination of third parties and reliance on statements under Section ... Violation of principles of natural justice - grant of opportunity of cross-examination of third parties from whom statements have been recorded which have been referred to and relied upon in the adjudication order - corroborative statements or not - retraction of statements - HELD THAT:- Admittedly, as per the view taken by the adjudicating authority as is evident from the order of adjudication that there are sufficient evidence available to justify the imposition of penalty on the noticees. It is true that the adjudicating authority has stated that this defence which is available corroborates the statement given by the third parties under Section 108 of the Act. Thus, if according to the adjudicating authority, there is enough evidence to pin down the respondent dehors the statements recorded under Section 108 of the Act, this Court fails to understands as to why the adjudicating authority should place reliance upon the statement under Section 108 of the Act. Considering various factors more particularly the peculiar facts and circumstances of the case and also taking note of the fact that the adjudication proceedings commenced with the issuance of the show cause notice in the year 2018, and the matter has been lingering before this Court as well as before the Tribunal for several years - without answering the substantial questions of law which have been raised by the revenue in these appeals, a workable direction can be issued whereby the questions of law can be left open at the same time, the rights of the respondents/noticees are protected as well as the interest of the revenue also can be protected. In the event, the adjudicating authority is of the view that the statement under Section 108 of the Act has to be relied upon then it goes without saying that the respondents shall be entitled to a full-fledged opportunity of cross-examining such of those persons from whom statements under Section 108 of the Act have been recorded - the substantial questions of law which have been raised by the revenue are left open and the observations and findings rendered by the learned Writ Court to justify its ultimate conclusion are not to be treated as precedent and the legal question is left open. The adjudicating authority shall endeavor to complete the adjudication proceedings afresh as expeditiously as possible preferably within a period of four months from the date on which the personal hearing is concluded - Appeal disposed off. Issues involved:The judgment involves issues related to the refusal of granting an opportunity of cross-examination of third parties, reliance on statements recorded under Section 108 of the Customs Act, 1962, and the correctness of the orders passed by the Tribunal and the High Court.Issue 1: Refusal of Cross-ExaminationThe primary issue was the refusal of the adjudicating authority to grant an opportunity for cross-examination of third parties whose statements were relied upon in the adjudication order. The respondent challenged this refusal, seeking to cross-examine those persons under Section 108 of the Act. The Writ Court directed the adjudicating authority to allow cross-examination, leading to appeals by the revenue under Section 130 of the Customs Act.Issue 2: Reliance on Third-Party StatementsThe adjudicating authority relied on statements under Section 108 of the Act, stating that there was enough evidence to justify the penalty imposition on the noticees. However, the Court questioned the reliance on these statements when there was sufficient independent evidence available to establish the case without them. The Court emphasized that the rights of the noticees should be protected while ensuring the interest of the revenue.Issue 3: Correctness of OrdersThe Tribunal's orders, following the Writ Court's decision, were challenged by the revenue. The questions of law raised included the Tribunal's failure to provide independent reasons, the applicability of the High Court's order in another case to the present respondent, and the necessity of cross-examination under Section 138B of the Customs Act. The Court decided to issue directions for fresh adjudication without relying on third-party statements, protecting the rights of the noticees and the revenue's interests.Separate Judgement:The High Court, comprising Hon'ble Chief Justice T.S. Sivagnanam and Hon'ble Justice Hiranmay Bhattacharyya, heard the appeals together and disposed of them with directions for fresh adjudication. The Court emphasized the need to protect the rights of the noticees while ensuring a fair adjudication process.