Cross-examination rights in Customs Broker proceedings limit reliance on section 108 statements and invalidate untested evidence.

Statements recorded under section 108 of the Customs Act, 1962 cannot by themselves justify revocation of a Customs Broker licence, forfeiture of security deposit or penalty unless the makers are examined and cross-examination is afforded in the manner required by section 138B. Regulation 17(3) of the Customs Broker Licensing Regulations, 2018 requires consideration of relevant documentary and oral evidence, and regulation 17(4) preserves the broker's right to cross-examine persons relied on in the proceedings. Reliance on untested statements, especially where the inquiry officer and Commissioner did not examine the witnesses, was therefore unsustainable; the impugned order was set aside.

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Issues: Whether the revocation of the Customs Broker licence, forfeiture of security deposit and imposition of penalty could be sustained solely on the basis of statements recorded under section 108 of the Customs Act, 1962 without examining those persons before the adjudicating authority and without affording cross-examination to the Customs Broker.

Analysis: Regulation 17(3) of the Customs Broker Licensing Regulations, 2018 requires the inquiry authority to consider relevant documentary and oral evidence, and regulation 17(4) entitles the Customs Broker to cross-examine persons examined in support of the proceedings. Statements recorded under section 108 of the Customs Act, 1962 before the issuance of the show cause notice were relied upon, but the persons who made those statements were not examined by the Inquiry Officer or the Commissioner. The order also proceeded on the footing that such statements were admissible merely because they had not been retracted. The Tribunal held that this approach was unsustainable, since statements recorded during inquiry or investigation can be relied upon only in accordance with the mandatory procedure contemplated by section 138B of the Customs Act, 1962, which requires examination of the maker of the statement and an opportunity of cross-examination before such statement can be treated as relevant evidence.

Conclusion: The revocation, forfeiture and penalty could not be sustained on the basis adopted by the Commissioner, and the impugned order was set aside in favour of the appellant.

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