TaxTMI 
TaxTMI 
2021 (10) TMI 1411
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.... 2021, is taken into account. FACTS OF THE CASE: 3. That this petitioner and other petitioners after had been for a short or brief period in foreign countries like Dubai returned to India through air between 05.11.2019 and 07.11.2019. In this context, it is to be noted that based on the input received from Directorate of Revenue Intelligence (DRI), all passengers arriving from Kuala Lumpur, Dubai, Sharjah and Singapore to Trichy through some international flights like Air Asia, Air India Express, Scoot Tiger Airlines on 05.11.2019 have concealed huge quantities of 24 karat gold in the form of crude chain, paste etc. Therefore, the DRI officials at about 22:15 hours on 05.11.2019 at Trichy airport, claimed to have monitored the passengers who arrived or started arriving from the aforesaid flights and when the passengers, according to the respondent / Customs, were about to exit the green channel, their passports were verified and some of the passengers were enquired. According to the Customs, the passengers were enquired / verified whether they were in possession of any gold or any other contraband and if so, whether they have declared so on their arrival before the Customs. H....
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....he airport through green channel as averred by the respondent / Customs and they in fact, intended to declare the same, since before they crossed the DFMD they were intercepted, the chance was not given to them to make the declaration. Moreover, whatever goods brought by them seized by the Customs were not based on any procedure to be adopted in this regard by drawal of mahazar with independent witnesses, after examining the passengers in front of the Magistrate and in violation of these procedures, according to the petitioners, since such a seizure exercise was completed by the Customs on the alleged single mahazar, despite the fact that this episode continued for more than 26 hours, starting from late hours of 05.11.2019 and ending at early hours on 07.11.2019, neither at the time of this seizure procedure taken place nor thereafter, the chance of retracting the alleged statements recorded by the Customs against the petitioners were given and ultimately, when show cause notices were issued, that was the first time these petitioners had an occasion to retract the same and therefore, every one of the petitioners had made a strong objection to the allegation of alleged offence under....
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....respect of these petitions, the order of the writ Court dated 28.04.2021 also was made available to the Customs. However, according to the petitioners, the Customs proceeded to complete the adjudication proceedings and by two separate orders dated 02.06.2021 & 22.06.2021, the adjudication proceedings concluded and order of confiscation and consequential effect has been ordered. 12. Therefore, according to the petitioners, despite the order of the Writ Court dated 28.04.2021, was in force, where it has been specifically held by the learned Judge that, the adjudication proceedings cannot be allowed to continue for the purpose of determining their guilt and also despite the request having been made by the petitioners, of course, while making reply to the show cause notice that, chance of cross examination has to be given to them, denying that chance of cross examination and in violation of the order already passed in this regard, as referred to above, since this order of adjudication has been passed through the impugned orders referred to above, the petitioners having no other option except to prefer writ petitions before this Court as these orders primarily is assailable, accordin....
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....ied upon by the respondents, but in the case in hand, since they mainly relied upon the mahazar for seizure followed by the alleged statement made under Section 108 of the Act, it cannot be the basis for arriving at a conclusion that the petitioners were guilty. 15. Apart from the abovesaid main grounds, the learned Counsel for the petitioner also canvassed the following points as ancillary submissions: a) Since the passengers numbering about 129 who are involved in this case had arrived in three consecutive days from various destinations through various flights, all these passengers cannot be put under one basket by drawal of one seizure mahazar. Therefore, based on such one seizure mahazar, the case of the Customs cannot be built towards adjudication. b) Since the two mahazar witnesses are the only independent witnesses for the whole episode, their deposition before the adjudicating authority is the crucial one, as by which alone the statement said to have been recorded or the averments made in the seizure mahazar can be corroborated. Therefore, the failure to produce the mahazar witnesses for examination and consequently, the cross examination is fatal to th....
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....CC online Mad 4840: (2018) 362 ELT 226 12. Judgment of Hon'ble Supreme Court in Maharashtra Chess Association Vs. Union of India and others - (2020) 13 SCC 285. 17. By citing these decisions, the learned Counsel for petitioners would contend that, since the principle of natural justice is an integral part of fair adjudication in any such proceedings like the present one, that principle should have been scrupulously followed by the adjudicating authority. If the adjudicating authority has decided the issue mainly relying upon the seizure mahazar as well as the alleged statement recorded under Section 108 of the Customs Act, fair chance of retracting the same and to establish the counter case on the part of the petitioners should have been given, by allowing them to cross examine both the mahazar witnesses as well as the officials or officer concerned, who prepared the mahazar as well as recording of the statements. In the absence of such a chance being given to the petitioners, the entire adjudication proceedings which culminated in the order impugned gets vitiated. 18. They would also submit that, very particularly, the present cases are concerned, it is one episode....
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....dings were given by the Writ Court in W.P. (MD)Nos.3917 & 3918 of 2020 dated 28.04.2021, the said writ order was under challenge in Writ Appeals ie., W.A.(MD)Nos.1248 & 1249 of 2021, where a Division Bench of this Court, having considered the findings given by the Writ Court, has stayed the order, by order dated 30.06.2021. Therefore, the said order passed by the Writ Court dated 28.04.2021, is no more available to press into service against the impugned orders. b) No doubt, the principle of natural justice is one of the important facet of any quasi-judicial or adjudication proceedings, but there is no hard and fast rule that, the chance of cross examination of witnesses, have to be given invariably in every case and if such a chance is not given, therefore, it cannot be construed as a violation of such principle. c) Though the episode was started from 05.11.2019 midnight and ended on the early hours on 07.11.2019, since there has been some interconnectivity among these petitioners or the whole passengers who were involved in the activities of bringing various metals like gold and silver and other costly electronic items to this country had a common object to clea....
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....racted, there are judgments to state that, such kind of statement or confession voluntarily given by the noticee need not be corroborated by any external evidence and for that purpose the mahazar witness or any other witness need not be examined. Therefore, giving the chance of cross examination to these petitioners does not arise. g) Moreover, assuming that they sought for a chance of cross examination first time in the reply to the show cause notice, pursuant to which, the officer who conducted the adjudication proceedings not acceded to that request made by the petitioner and accordingly, he proceeded to complete the adjudication proceedings, at that moment, the very denial of the officer concerned could have been treated as an order passed by the adjudicating authority and that order itself is an appealable order under Section 128 of the Customs Act. When the petitioners had not chosen to challenge such denial of cross examination chance as alleged, it deems that they accepted the adjudication proceedings without even acceding to their request of cross examination as that is unwarranted in the present case, in view of the categorical confession statement recorded under....
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.... Hon'ble Supreme Court Judgment reported in 2015 (1) SCC 347 in State of Uttar Pradesh -Vs- Arvind Kumar Srivastava. 12. Hon'ble Supreme Court Judgment reported in 2020 (1) Supreme 707 in Chairman/Managing Director, U.P. Power Corporation -Vs- Ram Gopal. 13. Hon'ble Supreme Court Judgment reported in 2021 (4) SCC 1 in Tofan Singh -Vs- State of Tamil Nadu. 14. Hon'ble Supreme Court Judgment reported in 1963 AIR (SC) 822 - RadhaKishan -Vs- State of U.P 15. Hon'ble Supreme Court Judgment reported in 1970 AIR (SC) 1065 - Illias -Vs- The Collector of Customs Madras. 16. Hon'ble High Court of Kerala at Eranakulam reported in 1989 (1) MLJ (Cri) 381 - Thaomas -Vs- Union of India. 17. Hon'ble Supreme Court Judgment reported in 2016 (11) SCC 368 in Sekhar Suman Verma -Vs- The Superintendent of N.C.B & another. 18. Hon'ble Supreme Court Judgment reported in 2007 (6) SC 410 in Ravindran @ John -Vs- The Superintendent of Customs. 19. Hon'ble High Court of Bombay reported in 1979 Supreme (Bora) 232 in Mahfoos khan Mehboob Sheikh -Vs- R.J.Parakn another 20. Hon'ble High Court of Madras reported in 1999 ....
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....s concerned, in paragraph 15 of the said judgment, the learned Judge also had expressed his view that the petitioners in that case are not innocents. The said finding also would squarely apply to all such noticees including these petitioners. Therefore, merely because of the non-production of the CCTV footage for which the custodian is Airport Authority of India with whom the Customs Department does not have any agreement or the Customs Department cannot be a custodian of the CCTV footage of the Airport Authority of India, it cannot be construed that the entire adjudication proceedings cannot be allowed to continue and that is the reason why while interjecting the order of the writ Court, the Division Bench has categorically stated that, the finding given by the learned Judge is unwarranted and therefore, the order has been stayed. Therefore, learned Standing Counsel would contend that, the plea raised by the petitioners that chance of cross examination was not given and the writ Court order, dated 26.04.2021 was in force and therefore these two reasons were mainly projected by the petitioners in favour of them to assail the impugned order, according to the respondents counsel, wou....
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....quantities of 24 karat gold in the form of crude chain, paste etc, and in this regard the officers on arrival at the airport at 22:15 hours on 05.11.2019, waited at the Customs arrival hall and the passengers arriving from the aforesaid flights were about to exit the green channel were verified with their passport and certain passengers were enquired, who on enquiry, detailed in the annexure to the mahazar, were asked the question whether they were in possession of any gold or any other contraband and whether they have declared them on their arrival to the Customs. It was answered, that too in the presence of the mahazar witnesses, stating that, they have not made any declaration and have voluntarily admitted of having brought gold in crude form in small quantities varying from 50 gms to 500 gms. With this background, the respondent / Customs ie., DRI officials started proceeding with the process of search and seizure. 27. In the mahazar, two individuals stood as independent witnesses. Only in the presence of the two mahazar witnesses, the entire search and seizure, according to the customs, was conducted. The Mahazar was drawn by an Intelligence Officer of DRI, Madurai Regional....
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....at context, it is the definite case on the part of the petitioners that unless and until the two independent witnesses, in whose presence it was claimed by the Customs that every action was taken ie., search as well seizure, are brought before the adjudicating authorities to depose, in order to corroborate what has been stated in the seizure mahazar which was the only document available for the Customs prior to obtaining alleged confession statement made under Section 108(3) of the Customs Act, it cannot be concluded that the episode as claimed by the Customs Department was actually taken place. 32. Only in this context, the petitioners were definite and very much particular that, these independent witnesses should be examined and cross examined. Also it is the case of the petitioners that, 20 more DRI officials or officers who were present or claimed to be present for the whole episode which took place for more than 26 hours from 05.11.2019 to 07.11.2019, either few of them should have been examined so that the statement made in the seizure mahazar could be corroborated or at least the concerned official or intelligence officer of DRI Madurai Regional Unit who was responsible f....
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....ication. However, in another set of judgments, the view taken by the law Courts is that, since cross examination is one of the integral part of the adjudication or trial process wherein such chance shall be given to the person who seek for such cross examination and if such a chance is denied that would be one of the ground to treat the proceedings as a vitiated one. 37. In order to delve into this issue in further detail, some of the noted judgments cited by the learned Counsel on either side can be gone into. In this context, learned Counsel appearing for the petitioners, among various judgments they cited before this Court, are very particular about the few of them. The first judgment in this context, relied upon by the learned Counsel for the petitioners is one of the earlier decision of the Hon'ble Supreme Court reported in AIR 1961 SC 264 in the matter of Ambalal Vs. Union of India and others, where the learned Counsel relied upon the following: "6. This Court has held that a customs officer is not a judicial tribunal and that a proceeding before him is not a prosecution. But it cannot be denied that the relevant provisions of the Sea Customs Act and the Land ....
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....ection the dealer shall be given a reasonable opportunity of being heard and, where a return has been submitted, to prove the correctness or completeness of such return." It is clear on a plain natural construction of the language of this provision that it empowers the Sales Tax Officer to make a best judgment assessment only where one of two conditions is satisfied: either no return is submitted by the assessee or the return submitted by him appears to the Sales Tax Officer to be incorrect or incomplete. It is only on the existence of one of these two conditions that the Sales Tax Officer gets the jurisdiction to make a best judgment assessment. The fulfillment of one of these two pre-requisites is, therefore, a condition precedent to the assumption of jurisdiction by the Sales Tax Officer to make assessment to the best of his judgment. Now, where no return has been submitted by the assessee, one of the two conditions necessary for the applicability of section 17, subsection (3) being satisfied, the Sales Tax Officer can, after making such inquiry as he may consider necessary and after taking into account all relevant materials gathered by him, proceed to make the best ju....
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....pplies at the first stage of the enquiry before the Sales Tax Officer comes to the conclusion that the return submitted by the assessee is incorrect or incomplete so as to warrant the making of a best judgment assessment. The question is what is the content of this provision which imposes an obligation on the Sales Tax Officer to give and confers a corresponding right on the assessee to be afforded, a reasonable opportunity "to prove the correctness or completeness of such return". Now, obviously "to prove" means to establish the correctness ,or completeness of the return by any mode permissible under law. The usual mode recognised by law for proving a fact is by production of evidence and evidence includes oral evidence of witnesses. The opportunity to prove the correctness or completeness of the return would, therefore, necessarily carry with it the right to examine witnesses and that would include equally the right to Crossexamine witnesses examined by the Sales Tax Officer. Here, in the present case, the return filed by the assessee appeared to the Sales Tax Officer to be incorrect or incomplete because certain sales appearing in the books of Hazi Usmankutty and other wholesale....
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....ce of examination of the maker of the statement, the learned Senior Counsel fairly submitted that the same, is not admissible in evidence. 30. The learned Special Public Prosecutor would also submit that the said statement is not admissible in evidence. For this purpose I may refer to Section 138-B of the Customs Act, which reads as follows:- "138-B. Relevancy of statements under certain circumstances.-(1) A statement made and signed by a person before any Gazetted Officer of customs during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains,- (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstan....
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..... & Anr. v. State of West Bengal & Anr., AIR 2010 SC 142; and State of Uttar Pradesh v. Saroj Kumar Sinha, AIR 2010 SC 3131). 25. In Lakshman Exports Ltd. v. Collector of Central Excise, (2005) 10 SCC 634, this Court, while dealing with a case under the Central Excise Act, 1944, considered a similar issue i.e. permission with respect to the cross-examination of a witness. In the said case, the assessee had specifically asked to be allowed to crossexamine the representatives of the firms concern, to establish that the goods in question had been accounted for in their books of accounts, and that excise duty had been paid. The Court held that such a request could not be turned down, as the denial of the right to crossexamine, would amount to a denial of the right to be heard i.e. audi alteram partem. 26. In New India Assurance Company Ltd., v. Nusli Neville Wadia & Anr., AIR 2008 SC 876; this Court considered a case under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 and held as follows :- "45. If some facts are to be proved by the landlord, indisputably the occupant should get an opportunity to cross-examine. The witness who intends to ....
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....ould be given an opportunity to deny his guilt and establish his innocence. He can do so only when he is told what the charges against him are. He can therefore, do so by cross- examining the witnesses produced against him. The object of supplying statements is that, the government servant will be able to refer to the previous statements of the witnesses proposed to be examined against him. Unless the said statements are provided to the government servant, he will not be able to conduct an effective and useful cross-examination. 29. In Rajiv Arora v. Union of India & Ors., AIR 2009 SC 1100, this Court held: "13. .... Effective cross-examination could have been done as regards the correctness or otherwise of the report, if the contents of them were proved. The principles analogous to the provisions of the Indian Evidence Act as also the principles of natural justice demand that the maker of the report should be examined, save and except in cases where the facts are admitted or the witnesses are not available for crossexamination or similar situation. 14. The High Court in its impugned judgment proceeded to consider the issue on a technical plea, namely, no....
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.... the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross examination. That apart, the adjudicating authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list could be the subject-matter of cross-examination. Therefore, it was not for the adjudicating authority to presuppose as to what could be the subject-matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came up before this Court in CCE v. Andaman Timber Industries Ltd.2, order dated 17-3-2005 was passed remitting the case back to the Tribunal with directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 8. In view of the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of wh....
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....passengers who had hidden gold in their rectum cannot contend that they intended to declare before the customs authority and pay the applicable duty. 44. However, the learned Judge has further observed in paragraphs 11, 12 & 13 which are very much relied upon by the petitioners' side. Therefore, the said paragraphs of the learned Judge's order is extracted hereunder: "11. The Supreme Court in the decision reported in 2017 (16) SCC 93 (Directorate of Revenue Intelligence Vs. Pushpa Lekhumal Tolani), quoting International Convention on the Simplification and Harmonization of Customs Procedures, observed that a passenger going through the green channel is itself a declaration that he has no dutiable or prohibited articles. The respondents allege that the petitioners were intercepted when they were about to exit the green channel. The petitioners on the other hand claim that after the completion of immigration formalities and before crossing the DMFD, they were taken to custody. This controversy can be very easily resolved by production of the CCTV footage. The petitioners have not raised this contention as an afterthought. Right from the beginning this was their st....
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....encing or in person before passing final orders." 45. From the said observation of the learned Judge, the petitioners' Counsel take a point and argue that in order to resolve the controversy whether the noticees had crossed or attempted to cross the Customs barrier through green channel or they simply moved towards the Customs counter and even before they crossed the metal detector door frame whether they were intercepted or not as claimed by the noticees can be easily ascertained if the CCTV footage of the airport is produced and therefore, though the learned Judge directed to produce the CCTV footage, the learned Standing Counsel for the Airport Authority after instructions submitted that since the occurrence had taken place in the first week of November, 2019, the footage got erased a few weeks thereafter and therefore, the directions issued by the learned Judge in February 2021, became impossible of being complied with. 46. After recording this aspect, learned Judge in paragraphs 12 & 13 made a strong observation and in fact at paragraph No.13 quoted hereinabove of the said order, learned Judge has gone to the extent of observing that, where the fundamental right of t....
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....tanding Counsel for the Customs, the Court wanted to see the CCTV footage but the custodian of the CCTV is not the Customs department but only the Airports Authority of India whose Counsel stated that it got erased within few weeks of the date of occurrence of the incident and only in that circumstances, the learned Judge has drawn adverse inference only in the cases in respect of those two writ petitioners where, after making such an observation in paragraph 13 as quoted above, that the adjudication proceedings cannot be allowed to continue for the purpose of determining their guilt, it was also observed that, but can be allowed to continue only for the limited purpose of determining whether the goods in question can be allowed to be re-exported. 49. Therefore, the said finding given in the order referred to above by the learned Judge can be made applicable only in respect of those two writ petitioners and therefore, in respect of their cases the adjudication is not conducted and it is kept pending. 50. Learned Standing Counsel would further submit that, apart from these two writ petitioners some other writ petitioners also had come before this Court challenging the adjudica....
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....all the issue raised in the said then pending two writ petitions is only related to those two noticees and whatever observations made or whatever decisions rendered by the Writ Court would not be made or cannot be made applicable to the other noticees, that kind of note need not have been appended in the show cause notices dated 29.06.2020. Therefore, it clearly discloses or demonstrates that, it is in the minds of the Customs that whatever order to be passed by the Writ Court in the pending two writ petitions definitely will have a bearing on the whole issue covering all 129 noticees and that is the reason why such a note has been appended in the show cause notices dated 29.06.2020. 54. Moreover, the theory of judgment in rem and judgment in personum cannot be invoked in a case which emanates from the same cause of action differentiating the same in respect of every cases arising from the same cause of action. 55. The cause of action which arose in respect of all the 129 noticees is the search and seizure operation conducted on 05.11.2019 to 07.11.2019. Though an attempt has been made by the learned Counsel for Customs that though single mahazar has been drawn, in respect of....
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....s that, merely because the chance of cross examination was denied, ipso facto, it cannot make the entire proceedings vitiated as the chance of cross examination whether it is a must or not depends upon the factual matrix of the case. 59. In this context, out of several judgments relied upon by the respondent Counsels, the learned Standing Counsel for Customs mainly relied upon the following two decisions : 1) Ravindran @ John Vs. The Superintendent of Customs reported in 2007 (6) SCC 410, where he relied upon the following paragraphs: "11. Learned counsel for the appellant argued that the two independent witnesses in whose presence he had been searched were not examined at the trial. Reliance was placed on an observation contained in paragraph 28 of the report in (2004) 12 SCC 201 State of West Bengal and Others Vs. Babu Chakraborthy. In the instant case it is not disputed that two independent witnesses were associated when the search was conducted. The search was, therefore, conducted in accordance with law. But it is argued that failure to examine the two witnesses is fatal to the case of the prosecution. In our view, this is not the correct legal position. E....
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....o other reliable evidence on record to prove his complicity. We, therefore, find no merit in this submission." 2) Surjeet Singh Chhabra Vs. Union of India reported in 1997 (89) E.L.T. 646 (S.C.), where he relied upon the following: "3. It is true that the petitioner had confessed that he purchased the gold and had brought it. He admitted that he purchased the gold and converted it as a Kara. In this situation, bringing the gold without permission of the authority is in contravention of the Customs Duty Act and also FERA. When the petitioner seeks for crossexamination of the witnesses who have said that the recovery was made from the petitioner, necessarily an opportunity requires to be given for the cross-examination of the witnesses as regards the place at which recovery was made. Since the dispute concerns the confiscation of the jewellery, whether at conveyor belt or at the green channel, perhaps the witnesses were required to be called. But in view of confession made by him, it binds him and, therefore, in the facts and circumstances of this case the failure to give him the opportunity to cross-examine the witnesses is not violative of principle of natural jus....
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....tement dated 20.11.2008 made by the appellant under Section 108 of the Customs Act, 1962, voluntarily admitting that he was in the habit of misdeclaring the weight of the goods in all those bills of entry to evade payment of legitimate Anti Dumping Duty. Surprisingly, this statement, which was given voluntarily, neither retracted by the appellant nor contradicted or disproved by placing evidences subsequent to his voluntary statement. On the question of allowing appellant to cross-examine the Clearing House Agent and Investigating Officers, it is pertinent to bear in mind that the case has been clearly made out by the investigation based on the voluntary statement of Shri Sanjay H.Shah, Proprietor of M/s. Edge and other documentary evidences such as lab test report. Therefore, there is no need for the cross-examination of Clearing House Agent and Investigating Officers. Further, the appellant has adopted a systematic method of mis-declaring the weight to evade Anti Dumping Duty and the said fact was also admitted by the appellant in his statement dated 20.10.2008 and 03.11.2008. Further, the ADD is calculated based on the weight ascertained from the samples submitted by the appella....
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....d by the learned counsel for the petitioner, complaining that the learned Single Judge had wrongly rejected the case of the appellant, to set aside the impugned order do not carry any merit." 61. Yet another judgment of the learned Judge of this Court in the case of Jet Unipex Vs. Commissioner of Customs reported in 2020 (373) E.L.T. 649 (Mad.) was also relied upon by the learned Counsel for the Customs. In this decision, learned Counsel relied on the following observations: "27. I have considered the arguments advanced on behalf of the petitioner and the respondents. I have also perused the show cause notice and documents filed along with the writ petition. 28. From the overall facts and circumstances of the present case it is noted that it was a simple case of undervaluation of goods by the petitioner. 29. Therefore, statements were recorded from the petitioner's proprietor, his brother namely the 2nd petitioner, from 2 employees of the 2 CHA's of the petitioner. 30. They appear to have confirmed that there was variance between the value declared in import invoice and invoices in the case of contemporaneous import. 31. Statements ob....
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....ed that the 2nd petitioner has agreed with the statement dated 18.12.2013 and 20.12.2013 of the proprietor of the 1st petitioner and that of Palani and K Sundaramoorty, the two employees of the respective Custom House Agents of the 1st petitioner. 41. Certain statements of the petitioners particularly the one referred to in paragraph 12 of the show cause notice seems to indicate that there were admissions by the petitioner regarding undervaluation and that there were cash transactions in the past to evade customs duty. 42. At the same time, it is also evident that the 2nd respondent's have recovered several of the documents during the course of investigation which form the basis of proposals in the show cause notice. 43. As mentioned above, the object of empowering an officer of the customs department to record evidence under section 108 is to collect information of the contravention of the provisions of the Customs Act, 1962 or concealment of contraband or avoidance of duty of Excise so as to enable them to collect the evidence of the proof of contravention of the provisions of the act for initiating proceedings for further action of confiscation of the ....
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....not police officers and the person against whom such enquiry is made is also not an accused person. The statement made by such person in that enquiry "is not a statement made by a person accused of any offence". 50. The court therefore held that section 24 of the Indian Evidence Act, 1872 is therefore not applicable to such statements." 62. The aforecited judgments on this point as to whether the chance of cross examination has to be mandatorily given to the parties or noticees concerned have been gone through. Infact two major set of views have been taken by the law Courts. One set of view is that the chance of cross examination if it is not given or denied, that will vitiate the proceedings and another set of view is even though such a chance is not given to the parties / noticees, that may not be fatal to the proceedings or the proceedings is not vitiated. 63. Therefore, the emerging position on analysing these judgments would be that, in a particular case whether such a chance of cross examination should be given or not can be decided only at the background of the facts of that particular case. 64. In this context, after analysing a number of judgments in this....
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....arge for the drawal of mahazar another incharge for the seizure alone atleast could have been examined or could have been made available for the petitioners to cross examine. As per the law declared in number of judgments cited hereinabove, the emerging position would be that, if the cross examination part is denied whether it will be fatal to the case is concerned, in the present case, unless these four people come and corroborate before the adjudicating authority to state that they were part of the episode during the search and seizure, it is very hard to accept the version that has been projected on behalf of the Customs. 68. During the course of arguments, it was also pointed out that, under Section 138-B of the Act, whatever the statement made and signed by the person before any gazetted officer of Customs during the course of any enquiry or proceedings under the Act shall be relevant. Under sub-section 2 of Section 138-B, the provisions of sub-section (1) shall so far as may be, apply in relation to any proceedings under the Act other than a proceeding before a Court, as they apply in relation to a proceeding before a Court. 69. By relying upon heavily on this provision....
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.... even the mahazar drawn officer and the seizure officer who signed in the mahazar were not made present before the adjudicating officer or made available before the adjudicating officer for examination. 75. In the absence of any such attempt being made by the respondent Customs to bring the person who made the statement, it cannot be stated that the contingency noted at clause (a) have been complied with in this case. Therefore, the relevancy or admissibility of the statement is questionable in this case. 76. In the facts of the case as we quoted above, the entire case has been built up based on the single seizure mahazar, wherein, each and every aspect, according to the mahazar, was done only in the presence of the independent witnesses. They also claimed that, even after the seizure was completed the entire goods seized were kept in 5 boxes and in each of the boxes these independent witnesses signed and in every stage of search and seizure these independent witnesses were present. When that being so, the proprietary requires that, the adjudicating authority should have issued summons to these independent witnesses to corroborate the statements ie., the mahazar. Unless and u....
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....onclusion on facts, in the very same judgment, the Division Bench also opined that, though there are decision relied on by either side on the refusal to grant an opportunity of cross examination, no straitjacket formula can be adopted on the said legal issue, as it all depends on the facts and circumstances of each case. 79. Absolutely, there can be no quarrel on the said observation made by the Division Bench, which, in my considered view, is, in fact in favour of the petitioners. 80. As rightly opined by the Division Bench, there is no straitjacket formula on the principle as to whether the chance of cross examination is a must or not, as it depends upon the facts of each of the case. 81. Moreover, insofar as the request of cross examination is concerned, it has not been specifically denied by giving any order in writing by the adjudicating authority. Had the adjudicating authority decided the issue as to whether chance of cross examination should be given to the petitioner or not as a preliminary issue and rendered a finding, giving an order to that effect, certainly the arguments advanced by the learned Counsel for the respondents can be accepted and an appeal can be f....
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....ned by a person before any Central Excise Officer of a gazette rank during the course of any inquiry or proceedings under this Act shall be relevant, for the purpose of proving, an any prosecution for an offence under this Act, the truth of the facts which it contains:- (a) When the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. (2) The provisions of subsection (1) shall, so far as may be, apply in relation to any proceedings under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court." 11. We may straightaway say that the provisions of Section 9D of the Central Excise Act, ....
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.... of Section 9-D of the Act were invoked by the Collector holding that it was not possible to procure the attendance of some of the witnesses without undue delay or expense. Whether such a finding was otherwise justified or not can be taken up in the appeal." 14. The Division Bench also observed that though it cannot be denied that the right of cross-examination in any quasi judicial proceeding is a valuable right given to the accused/Noticee, as these proceedings may have adverse consequences to the accused, at the same time, under certain circumstances, this right of crossexamination can be taken away. The court also observed that such circumstances have to be exceptional and that those circumstances have been stipulated in Section 9D of the Central Excise Act, 1944. The circumstances referred to in Section 9D, as also in Section 138B, included circumstances where the person who had given a statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay and expense which, under the circumstances of the case, the Court considers unreasonable. It is clea....
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....hi High Court would be the answer to the said plea on behalf of the respondent Customs quoting Section 138-B of the Customs Act. 85. During the course of arguments, yet another interesting ground has been raised by the learned Counsel appearing for the petitioners that, the Central Board of Excise and Customs, New Delhi has issued a Master Circular dated 10.03.2017 where 89 earlier circulars issued by the Board have been rescinded and this Master Circular was issued. Though the said circular was issued primarily for the purpose of administration of Central Excise Act, 1944 as contended by the learned Counsel appearing for the respondents, certain aspects mentioned in the Master Circular can be pressed into service in the present case. In clause 14.9 under the heading 'Corroborative evidence and Cross-examination', the circular states as follows: "14.9. Corroborative evidence and Crossexamination: Where a Statement is relied upon in the adjudication proceedings, it would be required to be established though the process of cross-examination, if the noticee makes a request for cross-examination of the person whose statement is relied upon in the SCN. During investi....
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....ed in the Order-in-Original in the said case. (ii) In a case, where penalty alone is in dispute and penalties have been imposed under different provisions of the Act, the pre-deposit would be calculated based on the aggregate of all penalties imposed in the order against which appeal is proposed to be filed. (iii) In case of any short-payment or non-payment of the amount stipulated under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962, the appeal filed is liable for rejection. (iv) Section 35F of the Central Excise Act, 1944 has been amended with effect from 6.8.14 to provide for mandatory payment of 7.5% or 10% of the duty demanded where duty demanded is in dispute or where duty demanded and penalty levied are in dispute for admission of appeal before Commissioner (Appeals) or CESTAT. Once the amount is paid, no coercive action shall be taken for recovery of the balance amount during the pendency of the appeal proceedings before these authorities." 87. Though it was argued by learned Counsel appearing for the respondents that this Master Circular is only meant for Excise Department and it cannot be applied to the c....
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....nd fair play in quasi judicial proceedings are the important facets of judicial proceedings and when that being so, such a fair play or fairness in adjudication whether has been ensured by the officer or the authority concerned who does the adjudication process, is an important facet to be looked into. 91. In this context, if we look at the way in which the adjudication process went on unmindful of the order passed by the Writ Court as indicated above dated 26.04.2021, which was available or in force where the Customs also did notice the same and appended their note in the show cause notice itself, the proprietary requires that the Customs authorities should have waited for some time in the first fold. 92. Assuming that on 30.06.2021, if they were able to get a stay order from the Division Bench staying the operation of the order of the Writ Court, no doubt the Customs authorities should have waited for some time and granted opportunity to all the noticees including these petitioners. However, in this case there was no such chance as before 30.06.2021, adjudication was over and orders were passed. 93. Though in this aspect a point has been raised by the learned Standing Co....