TaxTMI 
TaxTMI 
2018 (10) TMI 1650
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....that the Customs Authorities conducted a search in the offices of the appellant-firm and seized certain documents. Consequent to which, Ext. P2 show cause notice was issued calling upon the firm to show cause why the value of the betel nuts imported by the petitioner from Indonesia covered by 26 Bills of Entry referred to therein shall not be re-determined and the differential duty amounting to Rs. 6,42,67,411/- with interest and penalty be realised. The allegations were of mis-declaration of Country of origin and under-valuation. The betel nuts were said to be sourced from Indonesia but routed through Bangladesh to avail of the Preferential Trading Arrangement with SAARC Countries (SAPTA). The appellant-firm would assert that they were unaware of the Country of origin and had declared correct value in the bills of entry and that the proceeding was initiated solely based on the statements allegedly given to the Authorities by two persons, namely, Narendra Lodya and Dhaval Lapasiya, the former an Indonesian Indenter. The petitioner requested for copies of the statements and also sought permission to cross-examine those persons in order to discredit their versions. Exts. P3 and P4 ar....
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....so observed that if the adjudicating authority decides not to give an opportunity to cross-examine the person concerned, whose statement is relied on, the order would be certainly a nullity, if the same is founded on the said statement. On the other hand, if the order is founded on materials other than the statement the same would not be vitiated for noncompliance of the principles of natural justice. The decision declining permission to adduce evidence or cross-examine was held to be correct and the learned Single Judge has observed that it can be considered only after the conclusion of proceedings, having regard to the prejudice, if any, caused to the party on account of such denial. Approaching this Court under Article 226 of the Constitution, before the culmination of the proceedings in matters like this is wholly premature and such a view would promote expeditious completion of the proceedings and prevent protraction of the proceedings at the instance of unscrupulous litigants. 7. In Andaman Timber Industries, the appellant therein had challenged the finding of the adjudicating authority for the reason that he was not allowed to cross-examine the dealers, whose statements wer....
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....ld therefore, submit that the learned Single Judge was perfectly justified in holding that the permission now sought by the appellant at a stage when the adjudication proceedings is yet to commence, would be premature. 9. In State of Kerala v. Shaduli(1977 KHC 345 : AIR 1977 SC 1627), it is held thus: "3. One of the rules which constitutes a part of the principles of natural justice is the rule of audi alteram partem which requires that no man should be condemned unheard. It is indeed a requirement of the duty to act fairly which lies on all quasi judicial authorities and this duty has been extended also to the authorities holding administrative enquiries involving civil consequences or affecting rights of parties because, as pointed out by this Court in A.K. Kraipak and Ors. v. Union of India, "the aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice" and justice, in a society which has accepted socialism as its article of faith in the Constitution, is dispensed not only by judicial or quasi judicial authorities but also by authorities discharging administrative functions. This rule which requires an opportunity to b....
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.... force in the third contention of the appellant." 11. Section 108(1) of the Act empowers any Gazetted Officer of Customs to summon any person, whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under this Act. Sub-section (3) of S. 108 provides that all persons so summoned shall be bound to attend either in person or through authorized agent, as such officer may direct and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and produce such documents and other things as may be required. Every inquiry under S. 108 shall be deemed to be a judicial proceeding under Ss. 193 and 228 of I.P.C. S. 122A of the Act, gives an opportunity to the person affected to be heard in the proceedings, which fulfills the principles of audi alteram partem, which reads as follows: "122A. Adjudication procedure.-(1) The adjudicating authority shall, in any proceeding under this Chapter or any other provision of this Act, give an opportunity of being heard to a party in a proceeding, if the party so desires." 12. It has to be e....
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.... adjudication process is over and then deciding upon whether any prejudice was caused to the appellant, on grounds of not affording an opportunity to cross-examine the witnesses, whose statements were relied on, would amount to an abuse, in so far as the alleged delinquent being absolved of the consequences merely for reason of a procedural error. After so many years rectification of the error by permitting cross-examination would be rendered impossible in many circumstances. Vitiating the entire proceedings by reason of a procedural error, which cannot be redone is a greater evil, than the delay occasioned in following the principles of audi alteram partem, to ensure no ground of a procedural error being raised to challenge a final order. The popular adage "A stitch in time saves nine" applies equally to adjudication proceedings and that is the principle espoused in Shaduli's case. Andaman Timber Industries cautions us that if a prayer for cross-examination was allowed when it was sought, the order could have been sustained. 15. In case if the appellant is permitted to cross-examine the witnesses at an earlier stage, it would only help the Department to arrive at a right conc....