Rachna Gupta ORDER
Rachna Gupta, Member (J)
1. Present appeal has been filled against the Order-in-Original adjudicating authority bearing No. 05/2022 dated 13.8.2021 vide which the request for cross examination of panch-witnesses and of departmental officers with respect to Show Cause Notice No. 33238 dated 7.2.2020 and corrigendum to Show Cause Notice No. 1720 dated 18.1.2021 has been rejected.
2. The appellant was suspected based upon the intelligence to be engaged in evasion of duty and other government tax by way of mis-declaration of brand of goods/description of the goods and also through undervaluation in imports. The said Show Cause Notice was issued proposing rejection of classification of the goods in the Bills of Entry as parts and panel of LED TV and proposing the goods to be classified as complete set of LED TV. The declared value was proposed to be re-determined with a demand of differential customs duty and imposition of penalty. While adjudicating the said Show Cause Notice the appellant requested for cross examination of 9 witnesses and officers which was rejected vide the order under challenge holding that there is sufficient admission of the appellant-applicant about the allegations levelled in the Show Cause Notice. Denial of cross examination in such circumstances is alleged by the appellant to be violative of principles of natural justice.
3. The appellant is aggrieved by the denial of cross examination in the impugned appeal and prays for setting aside of said order and a permission to cross examination of panch witnesses of departmental officers based upon whose statement that the impugned Show Cause Notice has been issued.
4. We have heard Shri Akhil Krishan Maggu, learned Counsel for the Appellant and Shri Rakesh Kumar, learned Authorised Representative for the Department.
5. It is submitted on behalf of the appellant that the right to cross examination is an indefeasible right. The violation thereof amounts to violation of basic principles of natural justice i.e., audi alteram partem. It is submitted that to substantiate the charges against the appellant persons whose statements have been relied upon need to be cross examined to enable the appellant to show the discrepancy in the show cause notice and to show the negligence during the investigations. It is mentioned that the allegation that full TV sets have been imported by the appellants can be conflicted only by cross examining the investigating officers and even the panch witnesses in whose presence the imported goods were opened and examined. The cross examination was required more for the reason that the department has failed to file any Chartered Engineers' report about the goods so as to verify if the goods were mere parts of TV sets or were complete sets of TV. The appellant is otherwise engaged in selling imported spare parts. Various bills and purchase orders and invoices in the possession of the appellant are required to be produced and the witnesses are required to be confronted with respect to the said documents. It is further submitted that there have otherwise been several illegalities in the process of investigations. The proprietor of the appellant Shri Harsh Mittal was illegally and forcibly detained by the investigating authority. The order is accordingly prayed to be set aside and appeal is prayed to be allowed.
6. Learned Counsel places reliance upon the following decisions:
1. Zahira Habibullah Sheik vs. State of Gujarat [MANU/SC/1344/2006 : 2006 AIR SC 1367];
2. Ayaaub Khan Noorkhan Pathan vs. The State of Maharashtra & Ors. decided on 08.11.2012 in Civil Appeal No. 7728 of 2012.
3. Laxman Exports Ltd. vs. Collector of Central Excise decided on 18.4.2003 [MANU/SC/0548/2002 : 2005 (10) SCC 634];
4. Basudev Garg vs. Commissioner of Customs, by Division Bench of Hon'ble High Court of Delhi delivered on 12.4.2013.
5. Writ Petition 1854 of 2000 1992 decided on 28.8.2009 titled J.K. Cigarette Ltd. & Ors. Vs. Collector of Central Excise & Ors.; and
6. Andaman Timber Industries vs. Commissioner of Central Excise Kolkatta decided 02.09.2015 by Hon'ble Apex Court in Civil Appeal No. 4228/2006].
7. To rebut the submissions, learned Departmental Representative has submitted that the appellant filed the Bill of Entry declaring the goods as unbranded LED TV panels whereas on examination, the goods were found as Curved LED panel of Samsung Brand. The value thereof was also found to be wrongly declared. Hence present is the case of clear mis-declaration and under valuation. Not only this the appellant has been found to be wrongly availing the benefit of exemption notification No. 50/2017-Cus. It is mentioned that the goods were not at all parts of LED panels as claimed by the appellant but these were ordered to be supplied as either TVs in SKD form or as complete TV sets which were deliberately unassembled into panels and parts so as to fit into different containers to take inadmissible benefit of the notification. The documents recovered during investigation and the statement recorded even of the proprietor of the appellant sufficiently proves the allegations of the Show Cause Notice. It is in the reply dated 16.6.2021 to Show Cause Notice that the cross examination of 5 Departmental Officer and 4 independent witnesses was made by the appellant which has been rightly been rejected by the Department. Thus Appeal is accordingly prayed to be dismissed. Learned Departmental Representative has emphasised upon the decisions of:-
1. Surjeet Singh Chhabra vs. Union of India [MANU/SC/0660/1997 : 1997 (89) ELT 646 (SC)];
2. Silicon Concept International (P) Ltd. vs. Pr. Commissioner of Customs, ICD, TKD [MANU/CE/0252/2019 : 2019 (368) ELT 710 (Tri-Del)];
3. M/s. AV Agro Products Ltd. vs. Commissioner of Customs, CE & CGST, New Delhi [MANU/CE/0028/2020 : 2020 (373) ELT 258 (Tri-Del)].
8. After hearing the rival contentions, it is held as follows:
The moot question to be decided is whether the right to cross examination of departmental and panch witnesses must be allowed to the appellant in the given facts and circumstances?
9. The right to cross examination is considered as a principle of natural justice as it corresponds to foremost principle of natural justice what is commonly known as 'audi alteram partem' and the absence thereof may adversely affect the party. As it was held by Hon'ble Apex Court in the case of Canara Bank and Ors. vs. Shri Debasis Das and Ors. reported as [MANU/SC/0225/2003 : 2003 AIR SCC 2041] and was reiterated in the case titled as Nagarjun Construction Co. vs. Government of Andhra Pradesh. The Constitution Bench of Hon'ble Apex Court earlier in the case of Sate of Madhya Pradesh vs. Chintaman Sadashiva Vaishampayan reported as [AIR 1961 SC 1623] has held that rules of natural justice requires that party must be given the opportunity to adduce all relevant evidence upon which he relies and further that the evidence of positive commencement should be taken in his presence was that he be given an opportunity to cross examination, the witnesses examination of the other party charges the non providing of the said opportunity was held to be violation of principles of natural justice. The said view has been endorsed in the case of Andaman Timber Industries vs. Commissioner of Central Excise Kolkata decided on 02.09.2015 in Civil Appeal No. 4228 of 2006 and also in J & K Cigarettes Ltd. (supra) case. Simultaneously the Hon'ble Apex Court in the case of Transmission Corporation of AP Ltd. vs. Shri Rama Krishna Rice Mill reported as [MANU/SC/8032/2006 : AIR 2006 SC 1445 held that:
"In order to establish that the cross-examination is necessary the consumer has to make out a case for the same. Merely stating that the statement of an officer is being utilised for the purpose of adjudication would not be sufficient in all cases. If an application is made requesting for grant of an opportunity to cross examine any official, the same has to be considered by the adjudicating authority who shall have to either grant the request or pass a reasoned order if he chooses to reject the application. In that event an adjudication being concluded, it shall be certainly open to the consumer to establish before the Appellate Authority as to how he has been prejudiced by the refusal to grant an opportunity to cross examine any official."
10. Earlier also while deciding the case titled as KL Tripathi vs. State Bank of India & Ors. reported as [MANU/SC/0334/1983 : AIR 894 SC 273] the Hon'ble Apex Court held that in order to sustain the complaint of violation of principles of natural justice on the ground of absence of opportunity of cross examination, it must be established that some prejudiced has been caused to the appellant by the procedure followed. It was held that the party who does not want to controvert the veracity of evidence on record, or of the testimony gathered behind his back, cannot expect to succeed in any subsequent grievance raised by him, stating that no opportunity of cross-examination was provided to him. Similarly was the view of Hon'ble Apex Court in the case titled as Union of India vs. PK Roy, reported as [MANU/SC/0049/1967 : AIR 1968 SC 850] and the case titled as Channabasappa Basappa Happali vs. State of Mysore, reported as [MANU/SC/0476/1970 : AIR 1972 SC 32].
11. Coming to the facts of the present case, the allegations of Show Cause Notice are based upon the physical examination of the goods that too in the presence of the appellant and the appellant's proprietor. He had declared the said goods in the Bill of Entry as unbranded TV panels. There is no denial of the appellant that said physical examination revealed that the goods instead of being TV parts were LED TVs of Samsung brand though in SKD form. There is no denial that the parts were imported in different consignments. In his statement dated 15.01.2018 the appellants proprietor himself has admitted that there was no written agreement or contract existed for the export nor any written purchase order placed nor even any written quotation/proforma invoice was supplied to him with respect to the goods in question. He produced some invoices through e-mil and assured to provide the same to the Department but he fails to supply the same with the plea that he is in the habit of deleting emails. Still when his email was got opened by him in the presence of investigating officer, the invoices which were recovered were containing the price of complete LED TV, and mode of supply as SKD module Kit. Similar was the mention in the sale contract and proforma invoice which got recovered from the goggle drive of Shri Harsh Mittal, proprietor of Mittal Impex company, the invoice No. 17066 as was mentioned in the impugned Bill of Entry was also found having the description of the goods as 24" LED TV. Thus the definite match was observed by the investigating team in the documents submitted by the importer/appellant at the time of importing goods and the invoices recovered during investigation. These documents were recovered from the appellant's own mail which was got opened by him in the presence of investigating officer but on the computer installed in the SIIB brand. He also put his signatures on the print outs of various emails retrieved from his emails. These documents have been made the basis for allegations in the impugned Show cause notice.
12. The appellant had submitted his reply to the said Show cause notice vide letter dated 16.06.2021. Perusal thereof shows that the no instance of prejudice has been mentioned in the said reply. The appellant was still declaring his goods as unbranded TV parts with no specific denial that the physical examination of his consignments in his presence revealed that all goods in his consignments were of Samsung brand. That the appellant has taken the plea that there is no Chartered Engineer's report to support the allegation of the Department, but there has been the examination report of Customs Officer dated 19.11.2017 (check) and re-examination reported dated 11.5.2018(check) categorically stating that the goods were branded LED panels and parts in TV glass casing but they found them without remote control without power cable without the mother board and without the sockets. There is no denial that the parts were simultaneous imported by the appellant but in different consignment.
13. Thus we are of the opinion that nothing cogent has been brought in reply to the Show Cause Notice to prima facie falsify the allegation of show cause notice or even to make the case of any prejudice or to establish that some prejudice has been caused to the appellant by procedure followed. There is no case of the appellant that his statement dated 15.01.2018 was his involuntary statement given in coercion. No retraction is at all apparent on record. The Hon'ble Apex Court in the case of Surjeet Singh Chhabra vs. Union of India (supra) has held that confession though retracted is an admission and binds the petitioner. The Customs Officer is not a police officer. Hence the confession made to them is an admissible evidence, hence there will be no need to permit the cross examination of the panch witnesses. We also draw support from the decision in the case of Kanungo & Co. Vs. Collector of Customs Kolkata and Others reported as [1993 (13) ELT 1486 SC] wherein it is observed as under:
"12 ......... In our opinion, the principles of natural justice do no 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-examined by them on the statements made before the Customs Authorities."
14. The Hon'ble High Court of Karnataka also in the case of NS Mahesh vs. Commissioner of Customs, Cochin reported as [MANU/KE/2519/2015 : 2016 (331) ELT 402 (Ker)] has held that-
1. ............the respondent specifically deals with the request of the petitioner, and finds as follows:
"i. Cross-examination of all officers who assessed, audited, I examined the impugned consignments:
The investigating unit has developed the case on the basis of documents recovered during investigation and other evidences and not relied on statements of any officers who examined/audited/assessed the consignment. Moreover said officers have discharged these functions as part of their official duty, based on documents provided by the importer. Further noticee No. 2 has not given any reasons for examining the said officer, nor the evidences sought to be brought out from them. It is also learnt that the dockets of the bills of entry relied upon by investigation have already been supplied along with the show cause notice. However if required, noticee No. 2 can obtain additional set of copies of documents from SIIB, under prior intimation to undersigned. Accordingly the request for cross-examining all officers who assessed/audited/examined the impugned consignments cannot be acceded to.
............
2. On a perusal of Ext. P5 order, and the reasons given by the respondent to deny the request of the petitioner for cross-examination, I do not find any illegality in the said order that would warrant an interference with the said order in these proceedings under Article 226 of the Constitution of India. The writ petition, in its challenge against Ext. P5 order, therefore fails, and is accordingly dismissed."
15. In the decision of this Tribunal in the case of M/s. AV Agro Products Ltd. Vs. Commissioner of Customs, Central Excise and CGST New Delhi reported as [MANU/CE/0028/2020 : 2020 (373) ELT 258 (Tri-Delhi) has held that-
"5. ......As far as applicability of Section 9D of Excise Act/138B of Customs Act as rightly observed by the adjudicating authority that the statement recorded were more in the nature of confession. The same cannot be the scope applicability of Section 9D. I draw support from Silicone concept (supra) as is emphasised by the Department."
16. Similarly in another decision this Tribunal in the case of Silicon Concept International (P) Ltd. Vs. Pr Commissioner of Customs, ICD TKD reported as [MANU/CE/0252/2019 : 2019 (368) ELT 710 (Tri-Del)] has held that-
13. From the above discussion it becomes clear that the confessional statements are out of the ambit of Section 9D as relied upon by the appellant and as has been considered in the various case laws relied upon by the appellant. The co-noticee, if his statement amounts to confession, cannot be compelled to be cross-examined and there would be no violation of principles of natural justice in that case. Though ample opportunity with the proceedee/assessee has to be granted to put forth his defence, however, the assessee cannot be compelled to self-incriminate himself. In view of the said observations we are of the opinion that permission for cross-examining Shri Vineet Saluja and Shri Pradeep Sharma has rightly been denied. As far as Ms. N. Rashmi and Shri Amit Mallik are concerned, since their statements as were given during the investigation do not amount to confession, they both can be allowed to cross-examine but not against their wish.
17. In the light of entire above discussions, we are of the opinion that the Adjudicating Authority has committed no error while denying the opportunity of cross examination of investigating officers and the panch witnesses. As a result, we uphold the order under challenge and consequent thereof, the appeal stands dismissed.
(Pronounced in the open Court on 31.03.2022)
© Manupatra Information Solutions Pvt. Ltd.