In a landmark judgment [HIM Logistics Pvt. Ltd vs The Principal Commissioner of Customs – W.P.(C) 1697/2016] delivered by the Delhi High Court recently allowed the cross-examination of persons who have given statements before the Additional Director General, Directorate of Revenue Intelligence (DRI).
The Petitioner “HIM Logistics Pvt. Ltd”a customs house agent, through a Writ Petition, has challenged the order passed by the Deputy Commissioner (Adjudication) ICD Import Thuglakabad has rejected the Petitioner’s request for cross-examination of two persons, whose statements have been relied upon in the proceedings initiated against the Petitioner.
On November 1 2004, the Additional Director General, Directorate of Revenue Intelligence (DRI) sent a SCN to the Petitioner and four others including M/s Spreet International, an importer,alleging that they have made 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 evaded apart from interest and penalty.
During the course of investigation, the partners of the importer firm had ‘voluntarily’ given statements to the DRI. The statements have been relied upon by the AA in the course of the adjudication proceedings. The specific case of the DRI is that the said partners of the importer acted in collusion with the Petitioner 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.
On 25th January 2016, the High Court of Delhi, through a Writ Petition filed by one of the co-noticee, has directed the department to complete the proceedings within 6 months. Later, the Petitioner requested the Adjudicating Authority to permit the cross examination of the partners who have given statements to the DRI. The request was rejected by the AA and fixed the final hearing for 26th February 2016.
On the same day, the petitioner approached the High Court and prayed for an opportunity to be provided to the Petitioner cross-examine the partners. The Respondents, on the other side, cited some of the past decisions of the Supreme Court and contended that in the lights of those decisions, the failure to afford an Assessee the right to cross-examine witnesses would not violate the principles of natural justice.
A bench comprising of Justice S.Muralidhar and Justice Vibhu Bkhru took a stand in favor of the Petitioners and set aside the order of AA rejecting the permission of cross-examination of the partners. While allowing the right of Cross examination to the Petitioners, the Court observed that, “the denial of such right would prejudice the Petitioner since the said statements are adverse to the Petitioner”. The Court further directed the AA to fix a date not later than within two weeks and from the date of judgment and conclude it within one week thereafter.
Read the full text of the judgment here.
