2026 (1) TMI 1496 - HC - Customs

Principles of natural justice and cross-examination procedure require tribunal to determine request existence before finding procedural vitiation; remand ordered.

Principles of natural justice concerning the availability and relevancy of witness statements focus on whether a request for cross-examination was made; ... Principles of natural justice - relevancy of statements and cross-examination of witnesses - vitiation of adjudication for non-provision of cross-examination - Whether the Tribunal's finding that the adjudication was vitiated for not following the procedure u/s 138B was supported by material evidence concerning the availability of cross-examination - HELD THAT:- In the present case, the appellants have categorically submitted that at no point was a request made for cross-examination of two witnesses, and therefore, there was no question of violation of the principles of natural justice. This particular fact has not been answered specifically by the Tribunal, and without answering the said question as to whether a request was made for cross-examination, the finding of the Tribunal that the principles of procedure established under Section 138-B of the Act, 1962 have been vitiated, in our view is against the principles established in law. It was incumbent upon the Tribunal to first come to a finding as to whether a request was made by the noticee. If the answer was in the affirmative, then only the Tribunal could have held that the procedure prescribed under Section 138-B of the Act, 1962 was not followed. However, if the answer to the above question were to be in the negative, we are of the view that the finding of the Tribunal that the procedure prescribed under Section 138-B of the Act, 1962 was not followed, would be incorrect. Though, the appellants have herein brought on record certain documents to indicate that no request for cross-examination was made, we are of the view that since the Tribunal is the last fact finding body, this issue should be decided by the Tribunal upon calling for the records of the adjudicating authority and other relevant records. Thus, we quash and set aside the order dated April 24, 2025 and direct the Tribunal to come to an appropriate finding with regard to the issues raised in the present judgment. Issues: (i) Whether the Tribunal was justified in holding that the procedure under Section 138B of the Customs Act, 1962 was vitiated for not providing cross-examination to the noticees.Analysis: The Court examined Section 138B and governing precedent on principles of natural justice and cross-examination in customs adjudication. It observed that Section 138B does not mandatorily require cross-examination in every case; instead the settled law requires that if a show-cause noticee requests cross-examination of persons whose statements are relied upon by the adjudicating authority, the request must be granted or, if not possible, the reasons for non-provision must be recorded. The Court found that the Tribunal did not answer the threshold factual question whether the noticees had in fact requested cross-examination and proceeded to hold vitiation; since the Tribunal is the final fact-finding body, the question of whether a request was made and the supporting records must be determined by the Tribunal after examining the adjudication record.Conclusion: The Tribunal's finding that the procedure under Section 138B was vitiated for non-provision of cross-examination is set aside because the Tribunal did not determine whether a request for cross-examination was made; the matter is remitted to the Tribunal to decide that factual issue and thereafter proceed de novo.