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Him Logistics Pvt. Ltd. Versus The Principal Commissioner of Customs

2016 (3) TMI 432 - DELHI HIGH COURT

Validity of Adjudicating Authority's order - Cross-examination of persons request declined - Partners of the importer acted in collusion with the Petitioner in making the illegal imports - Held that:- it is an admitted fact that the Respondent Department is placing considerable reliance on the statements of Mr. Shyam Lal and Ms. Preeti, the partners of the importer, in support of the case made out in the SCN. The impugned order of the AA does not indicate that any prejudice would be caused to th .....

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dvocates For the Respondent : Ms. Sonia Sharma, Senior Standing Counsel ORDER Dr. S. Muralidhar, J. CM No.7257/2016 (exemption) 1. Allowed subject to all just exceptions. 2. The application is disposed of. WP (C) 1697/2016 & CM No. 7256/2016 (Stay) 3. Notice. Ms. Sonia Sharma, Advocate, accepts notice for the Respondent. 4. Since the point involved is a short one, the petition is taken up for final hearing. 5. The challenge in this petition is to an order dated 17th February 2016 passed by t .....

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well as the Petitioner and four others by the Additional Director General, Directorate of Revenue Intelligence (DRI). The SCN alleged that the importer and the said persons, in collusion with the Petitioner who is a customs house agent (now known as 'customs broker') acted in collusion to make illegal import of auto parts by way of a Bill of Entry (B/E) using forged documents. The SCN inter alia proposed to confiscate the illegally imported goods, raise a demand for the customs duty evad .....

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itioner in making the illegal imports. Therefore, their statements are a critical piece of evidence being relied upon by the Respondent in support of the SCN. 8. One of the co-noticees of the SCN, Mr. Pawan Kumar Ralli, filed WP (C) No.777/2015 in this Court, in which an order was passed by the Court on 25th January 2016, by the consent of the parties, which included the Principal Commissioner of the Customs (Import), directing that the SCN dated 1st November 2014 should be adjudicated within a .....

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v. Commissioner of Customs 2013 (294) ELT 353(Del), Laxman Exports Ltd. v. Controller of Central Excise 2002 (143) ELT 21( SC) and Swadeshi Polytex ltd. v. Collector of Central Excise 2000 (122) ELT641 (SC). 10. By the impugned order dated 17th February 2016, the AA rejected the above request of the petitioner. The AA relied on a decision of the CESTAT in Jagdish Shankar Trivedi v. Commissioner of Customs 2006 (194) ELT 290 (Tri- Del) which held that the failure to afford an Assessee the right t .....

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ly resisted the said prayer. Reliance was placed by Ms. Sharma on the decision of the learned Single Judge of this Court in Shahid Balwa v. The Directorate of Enforcement (199) 2013 DLT 380 and the decision of the Supreme Court in M. Prabhulal v. Assistant Director, Directorate of Revenue Intelligence (2003)8 SCC 449. 12. The above submissions have been considered. At the outset it requires to be noted that the decision in M. Prabhulal v. Assistant Director, Directorate of Revenue Intelligence ( .....

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The decision in Shahid Balwa (supra) which arose under the Foreign Exchange Management Act 1999 acknowledged, in para 7.2, that the enforceability of the right to cross-examine witnesses or persons who have made statements against a party "if demanded, would depend upon the facts and circumstances of the case, the nature of enquiry, the provisions of the statute and the rules as also the regulations governing the enquiry, the conduct of the person seeking to enforce the right of cross-exami .....

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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 th .....

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a court." 14. The above provision is in pari materia Section 9D of the Central Excise Act 1944 ('CE Act'), which was explained by the Division Bench of this Court in Basudev Garg (supra) as under: 10. Insofar as the general propositions are concerned, there can be no denying that when any statement is used against the assessee, an opportunity of cross-examining the persons who made those statements ought to be given to the assessee. This is clear from the observations contained in S .....

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rg (supra) observed as under: 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 cross-examination can be taken away. The court also observed that such circumstances have to be exceptional and that those circumstances have been stipula .....

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t, the Noticee would have a right to cross- examine the persons whose statements are being relied upon even in quasi- judicial proceedings. The Division Bench also observed as under:- "29. Thus, when we examine the provision as to whether the provision confers unguided powers or not, the conclusion is irresistible, namely, the provision is not uncanalised or uncontrolled and does not confer arbitrary powers upon the quasi judicial authority. The very fact that the statement of such a person .....

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sed upon the said material, for such a decision effectively. Therefore, the elements of giving opportunity and recording of reasons are inherent in the exercise of powers. The aggrieved party is not remediless. This order/opinion formed by the quasi judicial authority is subject to judicial review by the appellate authority. The aggrieved party can always challenge that in a particular case invocation of such a provision was not warranted." 16. The legal position explained in the above deci .....

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