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of <h1>CESTAT violated natural justice by denying cross-examination rights to one appellant while allowing another in customs penalty case</h1> <h3>Sushil Aggarwal and Sunil Aidasani @ Vicky Versus Principal Commissioner Of Customs, Principal Commissioner Of Customs (Import), New Delhi.</h3> Sushil Aggarwal and Sunil Aidasani @ Vicky Versus Principal Commissioner Of Customs, Principal Commissioner Of Customs (Import), New Delhi. - 2025:DHC:698 ... ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment were:1. Whether the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) erred in denying the right to cross-examine a key witness, Mr. Bhalla, to the appellants, Mr. Sushil Aggarwal and Mr. Sunil Aidasani, under Section 138(B) of the Customs Act, 1962.2. Whether the principles of natural justice were violated by not allowing cross-examination of the witness whose statements were used as evidence against the appellants.3. Whether the CESTAT's decision to uphold penalties against Mr. Sushil Aggarwal while setting aside penalties against Mr. Sunil Aidasani was justified and consistent with the law.ISSUE-WISE DETAILED ANALYSIS1. Right to Cross-Examine under Section 138(B) of the Customs Act, 1962Relevant Legal Framework and Precedents: Section 138(B) of the Customs Act, 1962, pertains to the admissibility of statements made before customs officers. The legal framework requires that if such statements are to be used against a person, the person making the statement must be made available for cross-examination. The Court also referenced the decision in Shri Krishan Kishor Aggarwal vs Additional Commissioner of Customs, which emphasized the necessity of cross-examination to uphold principles of natural justice.Court's Interpretation and Reasoning: The Court found that the CESTAT failed to provide a consistent application of Section 138(B) by denying cross-examination to Mr. Sushil Aggarwal while allowing it for Mr. Sunil Aidasani. The Court emphasized that the right to cross-examine is crucial when statements form the basis of an adverse order.Key Evidence and Findings: The statements of Mr. Bhalla implicated both appellants. However, the CESTAT's inconsistent approach in granting cross-examination rights led to a discriminatory outcome.Application of Law to Facts: The Court applied Section 138(B) and the principles of natural justice, concluding that both appellants should have been afforded the opportunity to cross-examine Mr. Bhalla.Treatment of Competing Arguments: The appellants argued that the denial of cross-examination violated natural justice, while the Department contended that such rights are not unfettered. The Court sided with the appellants, noting the discriminatory treatment by CESTAT.Conclusions: The Court concluded that both appellants should be allowed to cross-examine Mr. Bhalla, ensuring compliance with Section 138(B) and upholding natural justice.2. Consistency in CESTAT's DecisionRelevant Legal Framework and Precedents: The Court examined the consistency of CESTAT's application of legal principles, referencing the need for uniform treatment of similarly situated parties.Court's Interpretation and Reasoning: The Court found CESTAT's decision inconsistent, as it allowed cross-examination for one appellant but not the other, despite similar circumstances.Key Evidence and Findings: The evidence against both appellants was primarily based on Mr. Bhalla's statements, yet CESTAT's decisions diverged.Application of Law to Facts: The Court applied principles of consistency and fairness, determining that both appellants should receive equal treatment.Treatment of Competing Arguments: The appellants argued for equal treatment, while the Department justified the differential treatment based on procedural grounds. The Court favored the appellants' argument for consistency.Conclusions: The Court concluded that CESTAT's inconsistent treatment was unjustified and ordered equal opportunity for cross-examination for both appellants.SIGNIFICANT HOLDINGSCore Principles Established: The judgment reinforced the principle that the right to cross-examine is integral to ensuring fair adjudication when statements are used as evidence. It also emphasized the need for consistency in legal proceedings.Final Determinations on Each Issue: The Court determined that both Mr. Sushil Aggarwal and Mr. Sunil Aidasani should be granted the opportunity to cross-examine Mr. Bhalla. The CESTAT's inconsistent decisions were rectified by mandating a uniform approach to the appellants' rights.Verbatim Quotes of Crucial Legal Reasoning: 'The denial of the right of cross-examination of such witnesses, was plainly in violation of the principles of natural justice.' The Court highlighted the necessity of cross-examination to uphold fairness and justice.The Court directed that the cross-examination be scheduled on a specific date, with no further adjournments, ensuring a swift resolution. The original order was not disturbed for other parties, and the pre-deposit condition was waived in case of further penalties on the appellants.
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