Natural justice in customs adjudication requires cross-examination and defence evidence; confiscation set aside and release of goods ordered.

Denial of a meaningful opportunity to cross-examine material witnesses and adduce defence evidence vitiated the confiscation and penalty adjudication, because the adjudicating authority failed to address requests for adjournment, documents, and witness examination when possession and recovery were disputed. The order was set aside and the matter remanded for fresh adjudication with full opportunity to cross-examine named witnesses and lead defence evidence. Separately, goods already directed to be released in the original order were held liable to be released to the appellant forthwith, since that release direction could not be withheld on account of unpaid penalties in other proceedings.

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Issues: (i) Whether the adjudication order sustaining confiscation and penalty could stand when the appellant was denied effective opportunity to cross-examine witnesses and to adduce defence evidence; (ii) whether the goods already directed to be released in the adjudication order were liable to be released to the appellant.

Issue (i): Whether the adjudication order sustaining confiscation and penalty could stand when the appellant was denied effective opportunity to cross-examine witnesses and to adduce defence evidence.

Analysis: The record showed that the appellant had sought adjournment, requested supply of relied-upon documents, and specifically asked for cross-examination of the seizure and panchnama witnesses. The adjudication order did not deal with these requests or record reasons for refusing them. When the very possession and recovery of the gold biscuits were disputed, denial of cross-examination and refusal to consider defence evidence amounted to violation of natural justice.

Conclusion: The adjudication order could not be sustained and was rightly set aside, with the matter remanded for fresh adjudication after giving the appellant opportunity to cross-examine named witnesses and to lead defence evidence.

Issue (ii): Whether the goods already directed to be released in the adjudication order were liable to be released to the appellant.

Analysis: The adjudicating authority had already ordered release of the specified household articles on the footing that they were covered by a baggage receipt and thus represented valid import. Non-release of those goods could not be justified on the ground that penalties in other proceedings remained unpaid, since the release direction had already been made in the original order.

Conclusion: The authorities were directed to release the specified goods to the appellant forthwith.

Final Conclusion: The appeal succeeded to the extent that the confiscation and penalty order was set aside for fresh adjudication, while the previously ordered release of the identified goods was affirmed.

Ratio Decidendi: Where an adjudicating authority fails to consider a request for cross-examination of material witnesses and the opportunity to present defence evidence, the resulting order is vitiated for breach of natural justice and is liable to be set aside with a remand for de novo adjudication.

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