TaxTMI 
TaxTMI 
2026 (1) TMI 1496
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..... Since the issues involved in all these appeals are similar in nature and the decision in Custom Appeal No. 19 of 2025 would have a bearing upon all the appeals, we are deciding the specific questions of law in C.U.S.A. No. 19 of 2025. 3. In Custom Appeal No. 19 of 2025, the following substantial questions of law have been raised by the Revenue department:- "(1.) Whether the CESTAT was justified in applying the provisions of Section 138B of the Customs Act to the 'adjudication proceedings', so as to hold that statements of co-accused cannot be relied upon and thus the proceedings are vitiated for not following the procedure specified under Section 138B of the Customs Act, 1962? (2.) Whether the findings of the CESTAT that the statement recorded under Section 108 and retracted later on by the maker cannot be relied upon (without bringing any evidence as to threat, inducement or promise on record) contradicts the law laid down by the Hon'ble Supreme Court in Union of India v. Padam Narain Agarwal (2008) 231 E.L.T. 397 (S.C.), Surjeet Singh Chhabra v. Union of India (1997) 89 E.L.T. 646 (S.C.) and KTMS Mohammed Vs UOI (AIR 1992 SC 1831) and thus viola....
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....r production of the persons for cross-examination, even though the materials were brought to his notice, the grievance relating to non-observance of principles of natural justice would not appeal to the Court. The Special Leave Petition against the said judgment that was taken up before the Hon'ble Supreme Court was also dismissed by the Hon'ble Supreme Court. He has further relied on several judgments as in the case of Kannungo & Co. Vs. Commissioner of Customs, Calcutta and others reported in 1983 (13) ELT 1486 (SC); Lakshman Exports Limits Vs. Collector of Central Excise reported in 2002 (143) ELT 21 (SC); Sushil Aggarwal Vs. Principal Commissioner of Customs reported in (2025) 30 Centax 482 (Del.); Surjeet Singh Chhabra Vs. Union of India reported in 1997 (89) ELT 646 (SC); and Naresh J. Sukhwani Vs. Union of India reported in 1996 (83) ELT 258 (SC) to indicate that there would be violation of the principles of natural justice only when the show cause noticee demands cross-examination and the same is not provided for by the adjudicating officer. 6. Learned counsel on behalf of the respondents / noticees has relied on the judgments of the Hon'ble Supreme Court and....
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....oss examination in customs adjudication did not, by itself, constitute a violation of natural justice. The relevant paragraphs of the judgment are quoted herein below: "(12) On the point of natural justice, Mr. Sarf relied on a decision of the Hon'ble Supreme Court in the case of M/s. Kanungo & Co.-vs.-Collector of Customs reported in (1973) 2 SCC 438. Ld. Counsel relied on paragraph 12 of the judgement which is set out hereunder:- 12. We may first deal with the question of breach of natural justice. On the material on record, in our opinion, there has been no such breach. In the show- cause notice issued on August 21, 1961, all the material on which the Customs Authorities have relied was set out and it was then for the appellant to give a suitable explanation. The complaint of the appellant now is that all the persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it to cross-examine them. In our-opinion, the principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed to be cross....
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....tural justice may be different in different situations depending upon not only the facts and circumstances of each case but also on the powers and composition of the tribunal and the rules and regulations under which it functions. A court examining a complaint based on violation of rules of natural justice is entitled to see whether the aggrieved party had indeed suffered any prejudice on account of such violation. To that extent there has been a shift from the earlier thought that even a technical infringement of the rules is sufficient to vitiate the action. Judicial pronouncements on the subject are legion. We may refer to only some of the decisions on the subject which should in our opinion suffice." 10. Hon'ble the Supreme Court has, in earlier occasions as well, cautioned against "strait-jacket" application of principles of natural justice. In Maharashtra State Board of Secondary and Higher Secondary Education v. K. S. Gandhi reported in (1991) 2 SCC 716 the Court observed as follows: "(22). ...The omnipresence and omniscience (sic) of the principle of natural justice acts as deterrence to arrive at arbitrary decision in flagrant infraction of fair play. But t....
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.... witness, the witness being incapable of giving evidence, the witness not being traceable, amongst others. 12. The judgements relied upon by respondents/noticees do not come to their assistance as in each of the cases it is categorically mentioned that it would be open to the assessee to seek permission to cross-examine the persons whose statements have been relied upon and only if upon such request being made and the same not being complied with, then there would be a violation of the principles of natural justice. Even in such cases, as indicated above at paragraph 11, if the witnesses are not available to be cross-examined, the adjudicating authority would mention the reason for not providing such cross-examination to the respondent/noticees. 13. 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....