2023 (9) TMI 733
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....ss-examination of natural persons whose statements recorded under Section 108 of the Customs Act, 1962 had been referred to and relied upon in the adjudication order, or not. 3. Learned Senior Advocate appearing for the appellants in FEA 2 of 2009 and FEA 3 of 2009 hereinafter referred to as the first set of appeal, has submitted that, the appellants prayed for cross-examination of one Shri Nirmal Kumar Karmakar before the adjudication authority. Such prayer had been turned down by the adjudication authority in the order dated May 31, 2005. The Appellant Tribunal had rejected the prayer also. 4. Learned Senior Advocate appearing for the appellants in the first set of appeal has submitted that, since the department was relying upon statements made by the persons who were being investigated in the case and who gave statements against the appellants, it was incumbent on the part of the adjudicating authority to allow examination of such persons. In support of his contention, he has relied upon 2019 SCC OnLine Cal 150 (Sampad Narayan Mukherjee Vs. Union of India), unreported decision of the Division Bench in CUSTA 4 of 2022, MAT 556 of 2019 (Commissioner of Customs, Airport and Admn ....
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....R 2013 III Del 2269 (Basudev Garg vs. Commissioner of Customs), 2016 SCC OnLine Del 1236 (HIM Logistics Pvt Ltd vs. The Principal Commissioner of Customs), 2017 SCC OnLine KER 21780 (Krishna Brothers and Ors. Vs. Commissioner of Customs) in support of his contention. 8. Learned Senior Advocate appearing for the appellants in the first set of appeal has contended that, statement of co-accused is very weak type of evidence. In support of such contention he has relied upon AIR 1964 SC 1184 (Haricharan Kurmi and Anr. Vs. State of Bihar), and 2007 Volume 8 Supreme Court Cases 271 (Surinder Kumar Khanna vs. Intelligence Officer, Directorate of Revenue Intelligence). 9. Learned Advocate appearing for the appellant in the 2nd set of appeal has referred to the facts obtaining in three cases. He has pointed out that, on February 2, 1996, a consignment of live crabs was intercepted by customs authorities and in one basket, foreign exchange was seized. The stationery used for export had borne the name of the firm of the appellant. However, no signature of the appellant had been produced on any document. The appellant had claimed that, he was not aware of the foreign currency found in the co....
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....makar was asked to appear before the adjudicating officer for cross-examination but he did not appear and being a noticee in the proceeding he remained absent in such proceedings and did not contest the same. He has pointed out that, the Tribunal considered 1997 Supreme Court Cases (508) (Surjeet Singh Chhabra versus Union of India and Others) with regard to denial of cross-examination. 15. Learned Advocate appearing for the ED has pointed out that the case against the appellants in the first set of appeals is not solely dependent upon the statement of Mr Nirmal Kumar Karmakar. He has contended that contravention of Sections 9 (1) (b) and 9 (1) (d) of FERA had been established on the basis of documents recovered during the search by the officers of ED from the premises of Mr Nirmal Kumar Karmakar on March 4, 1997, as well as from the premises of the appellants on April 3, 1997. The recovered documents had been explained thoroughly by Mr Nirmal Kumar Karmakar as well as by the appellants. Such explanation had revealed Hawala transactions by the appellants. Statements of the appellants had been recorded under Section 40 of FERA which is deemed to be a judicial proceeding within the ....
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.... Volume 1 Supreme Court Cases 508 (Surjeet Singh Chhabra versus Union of India and others), 2013 Volume 9 Supreme Court Cases 549 (Telstar Travels Private Ltd and Others versus ED), 2014 SCC OnLine Bom 791 (Patel Engineering Ltd. Vs. Union of India and Another) and 2015 (323) ELT 73 (SC) (Patel Engineering Ltd versus Union of India and others), 2021 (376) ELT 46 (Telegana) (Mohammed Muzzamil versus Central Board of Indirect Taxes), 2003 Volume 4 Supreme Court Cases 557 (Canara Bank and others versus Debasis Das and others), judgement and order dated December 16, 2022 passed in CEXA 22 of 2021 (Commissioner of CGST and CX, Howrah versus Ashirwad Foundries Private Limited and another). 21. Learned Advocate appearing for the ED has contended that, the appellants in the first set of appeals failed to demonstrate any prejudice suffered by them due to non-availability of the opportunity of cross-examination of Mr. Nirmal Kumar Karmakar. He has contended that since the imposition of penalty upon the appellants had been based on corroborative evidence on record, the order dated October 27, 2008 passed by the Tribunal should be upheld. 22. In Tulsiram Patel (supra) the Supreme Court has ....
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....hem, and to lead his own evidence, both oral and documentary, in his defence.......... ........" 23. Lakshman Exports Ltd (supra) has also recognized that, an assessee should be allowed to cross examine the representatives of the prosecution to establish that the goods in question had been accounted for in their books of accounts and appropriate amount of Central Excise had been paid, in proceedings under the Central Excise Act, 1944. 24. With regard to breach of principles of natural justice by not allowing the assessee to cross examine the witnesses by the adjudicating authority, Andaman Timber Industries (supra) has held as follows: - "6. According to us, not allowing the assessee to cross-examine the witnesses by the adjudicating authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the st....
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....tute for a pre-decisional hearing, in given circumstances, post decisional hearing may be substantial compliance of the principles of natural justice particularly when, the delinquent was unable to establish any prejudice caused by a post decisional hearing. 28. In Surjeet Singh Chhabra (supra) the importer had made a confessional statement that he purchased the gold and brought the same. In such context, it has been held that the importer was bound by the confessional statement and the failure to give him the opportunity to cross examine the witnesses is not violative of principles of natural justice. Nothing has been placed before us in the 3 appeals that, any of the appellants made any confessional statement as to their guilt in the adjudication proceedings. 29. In Telstar Travels Private Limited (supra) the Supreme Court has held that, production of documents in terms of Section 139 of the Evidence Act, where the witnesses producing the documents is not subjected to cross-examination, did not violate the principles of natural justice. Moreover, in the facts of that case, the documents had been disclosed to the noticees and they had been permitted to inspect the same. The docu....
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....only one element in the consideration of all the facts proved the case. It has observed that, though confession may be regarded as evidence in that generic sense because of the provisions of Section 30 of the Evidence Act, the fact remains that it is not evidence as defined by Section 3 of the Evidence Act, 1872. 34. Noor Aga (supra) has been rendered in the context of a prosecution under the Narcotic Drugs and Psychotropic Substances Act, 1985. It has also considered provisions of section 108 of the Customs Act, 1962. It has held that, enquiry under section 108 of the Customs Act, 1962 is for the purpose of such Act and that it cannot be used for the purpose of convicting accused under the NDPS Act, 1985 or under any other statute including the provisions of the Customs Act, 1962. It has also explained section 138B of the Customs Act, 1962 as follows: - "84. Even otherwise Section 138-B of the 1962 Act must be read as a provision containing certain important features, namely: (a) There should be in the first instance statement made and signed by a person before a competent customs official. (b) It must have been made during the course of enquiry and proceedings under the ....
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....be treated as evidence against co-accused. Confessional statement of co-accused cannot by itself be treated as substantive piece of evidence against another co-accused and can, at best, be used or utilized in order to lend assurance to the Court. 37. The contours of natural justice in the context of seizure of a vehicle by the Customs Department under the provisions of the Customs Act, 1962 had come up on consideration in Tapan Kumar Biswas (supra). In the facts of that case, the writ petitioner had neither filed show-cause nor took any steps to inspect the documents. In such context, request for cross-examination had been turned down. It had observed that, Section 124 of the Customs Act, 1962 itself provides for the extent of application of the principles of natural justice. In the facts of that case, it had held that, the writ petitioner was not entitled to cross-examine any witness. 38. The Bombay High Court in Patel Engineering Ltd. (supra) on the aspect of breach of principles of natural justice has noted that, no technical breach can be advantageous, provided the breaches caused by such breachers is not established. In the facts of that case, the Court did not find any viol....
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....ourt in HIM Logistic Pvt Ltd (supra) had set aside the order of the adjudicating authority for not allowing cross-examination of the prosecution witnesses. 45. The Kerala High Court in Krishna Brothers and Ors. had set aside proceedings under the Custom Brokers Licensing Regulation, 2013 on the grounds of principles of breach of natural justice. 46. The Bombay High Court in Prakash Raghunath Autade (supra) has considered the stage at which a noticee is entitled to cross examine the witnesses. It has referred to previous authorities and observed that, it is only after the statement of witnesses are recorded by the relevant authority in course of adjudication proceedings and such evidence is regarded as relevant that the noticee has the right to claim that he be extended the opportunity to cross examine such witnesses so as to extend to him fair, reasonable and adequate opportunity of defence. 47. Sampad Narayan Mukherjee (supra) has considered Sections 108, 122, 122A and 138B of the Customs Act, 1962 and the right of cross-examination of witnesses introduced by the prosecution in an adjudication process under the Customs Act, 1962. It has observed as follows:- "26. The Act of 1....
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....justice have two primary facets, namely, no one should be the judge of his cause and hear the other side. The issues that have been raised in the three appeals pivot around the audi alterem partem rule of the principles of natural justice. 51. Principles of natural justice have been recognized to be a part of Article 14 of the Constitution of India. It has also been recognized that, Article 14 is not the sole repository of the principles of natural justice. Principles of natural justice stand attracted in every adjudicatory proceeding, be it judicial, quasi judicial or administrative, unless specifically excluded by statute. An administrative action or a quasi judicial decision has to conform with the principles of natural justice when such action or decision affects the rights or results in consequences for a party. Orders that have been assailed in these appeals have resulted in consequences for the appellants. Impugned orders have to pass the test of adherence to principles of natural justice to attain validity. Adherence to the principles of natural justice in the adjudicatory process resulting in consequences for the affected party is so imperative that has to be read into a ....
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....fficer. 56. In the adjudication proceedings, the prosecution had relied upon statement made by Mr. Nirmal Kumar Karmakar to bring home the charges as against the appellant. Prayer for cross-examination of Mr. Nirmal Kumar Karmakar had been denied first by the adjudicating authority and thereafter by the appellate Tribunal. At no stage, did the adjudicating authority or the appellate authority had returned a finding that cross-examination of Mr. Nirmal Kumar Karmakar was not possible in view of events akin to those enumerated in Section 138 B of the Customs Act, 1962, happening. Mr. Nirmal Kumar Karmakar was alive both at the point of time of the order of adjudication dated January 31, 2005 and the appellate authority order dated October 22, 2008. The prosecution has not established that Mr. Nirmal Kumar Karmakar could not be found or was incapable of giving evidence or was kept out of the way by the appellant or his presence could not be obtained without an amount of delay and expense under the circumstances of the case, the authorities considers unreasonable. The adjudicating authority and the appellate authority did not return any finding akin to Section 138 B (1) of the Customs....