The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed customs duty demand and observed that the adjudication order passed without allowing cross-examination is gross violation of natural justice.
The main appellant is M/s. Indu Overseas Pvt Limited, a 100% Export Oriented Unit, engaged in the manufacture of brass parts and accessories from imported duty free brass scrap under EOU scheme. The manufacture/ assessee was undertaking export of manufactured brass parts and accessories as well as they were also clearing in the domestic tariff area on payment of duty as per the permission obtained by them from the authorities.
Working on the intelligence, the officers of DRI started investigation against the importer/assessee on the allegation that the 100% EOU unit are engaged in exporting brass items after regularly inflating the weight of the consignments in the export/ deemed export documents with an objective to wrongly claim fulfilment of their export obligation. After detailed investigation, a show cause notice was issued to the importer/ assessee namely Indu Overseas Pvt Limited and most of the other appellants which have filed the appeals.
At the very beginning the Advocate appearing for the appellants contended that there is gross violation of principles of natural justice. In this matter, at the time of adjudication they have asked for the cross-examination of certain persons but no cross-examination was granted.
It has further been contended that the Adjudicating Authority behaved in an arbitrary manner and had not accepted the demand of cross-examination of the above mentioned persons. The Adjudicating Authority has confirmed the Customs demand as well as imposed penalty in gross violation of the laid down principles of natural justice.
Quashing the customs duty demand, a Two-Member Bench of the Tribunal comprising Mr. Ramesh Nair, Member (Judicial) and C L Mahar, Member (Technical) observed that “We are of the view that it is necessary on the part of the Adjudicating Authority to accord opportunity of cross-examination of witnesses whose statements have been used as evidence in the matter. It is mandatory for Adjudicating Authority to follow the principles of natural justice.”
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