Customs, Excise and Gold Tribunal - Mumbai
M.P. Jain vs Collector Of Customs on 21 March, 1988
Equivalent citations: 1988(19)ECR108(TRI.-MUMBAI), 1988(37)ELT577(TRI-MUMBAI)
ORDER K. Gopal Hegde, Member (J)
1. The Revision Application filed before the Central Government against the Order-in-Appeal bearing No. S/49-98/81-GC, dated 5-4-1982 passed by the Collector of Customs (Appeals) Bombay statutorily stood transferred to the Tribunal.
2. The brief facts necessary for the disposal of this appeal are : On 21-1-1981 during the personal search of the appellant Shri Manila! P. Jain gold in the form of crude kada weighing 126.000 grams was recovered from his pant pocket. In the statement immediately recorded by the Gold Control Officer Shri M.P. Jain, among other things, stated that he was doing the business as broker in gold and silver and the kada in question was given to him "by his mother when he had gone to his native place. During the investigation the mother corroborated the version of the son. After investigation, after issue of show cause notice, after receipt of reply and after affording personal hearing, the Deputy Collector (Preventive) Gold Control, Bombay ordered absolute confiscation of the seized gold and also imposed a penalty of Rs. 2,0007- on Shri Manilal P. Jain. The appellant herein carried the matter in appeal to the Collector (Appeals) unsuccessfully and hence this appeal.
3. At the outset Shri Wazifdar submitted that the order passed by the authorities below is bad in law inasmuch as there had been a denial of the principles of natural justice. He contended that request to cross-examine the Panchas was denied to the appellant and he was, therefore, prejudiced in his defence. He could not establish to the satisfaction of the authorities below that the kada seized by the gold control officers was not primary gold but an ornament. He submitted that if the above contention is acceptable the matter requires to be remanded for consideration afresh. He also complained that disregarding the experts evidence, the Deputy Collector as well as the Collector (Appeals) had based their findings on their own personal observation as if they were the experts. The very approach of the authorities, to say the least, was improper and their order is based mostly or their own judgment and not on the evidence on record.
4. Shri Prabhu, appearing for the Collector, while admitting that an opportunity had not been given to the appellant to cross-examine the Panch witness, submitted that the Deputy Collector as well as the Collector (Appeals) had given cogent reasons in not allowing cross-examination. Shri Prabhu, further, submitted that granting of cross-examination is entirely within the discretion of the adjudicating authority and if the adjudicating authority had exercised that discretion the Tribunal should not interfere with such discretion. He also placed reliance on the decision reported in 1982 ELT 386 (Madras).
5. I have carefully considered the submissions made on both the sides. Short question for my consideration is whether the order passed by the authorities below is vitiated by reasons of denial of the principles of natural justice.
6. From the order of the adjudicating authority it is clear that on behalf of the appellant a request was made to cross-examine the Penchas and Shri Vasantrao Shankar-rao on whose statement the department placed reliance. This request was not granted by the adjudicating authority. The adjudicating authority had also given reasons for not granting the request. The relevant portion reads :
"I now come to the question of the defence request to cross-examine the Panch witness and Shri Vasudeo Shankarrao, whose statement has been recorded by the department and relied upon. One thing that is clear is that at the time of issuing the show cause notice, all the statement relied upon have been given to the defence. The defence has been given adequate opportunity to defend themselves after going through the contents of the statement and other documents. They have also been given an opportunity to examine the gold. I have not allowed the cross-examination of the panch witness and Vasudeo Shankarrao mainly for the following reasons:
(1) Ordinarily, the principle of natural justice is that no man shall be a judge in his own cause and no man should be condemned unheard. This latter doctrine is known as "audi alteram partem". It is on this principle that natural justice ensures that both sides should be heard fairly and reasonably. A part of this principle is that if any reliance is placed on evidence or record against a person, then that evidence or record must be placed before him for his information, to comment and criticism. That is all is meant by the doctrine above quoted. No natural justice requires that there should be a kind of formal cross-examination. Formal cross-examination is procedural justice. It is governed by Rules of Evidence. It is the creation of Courts and not a part of natural justice but of legal and statutory justice. It is agreed that natural justice certainly includes that any statement of a person before it is accepted against somebody else, that somebody else should have an opportunity of meeting it whether it is by way of interrogation or by way of comment, does not matter. So long as the party charged has a fair and reasonable opportunity, to see, comment, and criticise the evidence, statement or record on which the charge has been made against him, the demands and test of natural justice are satisfied. Cross-examination in that sense is not the technical cross-examination in a Court of Law in the Witness Box. (Kishanlal Agarwal v. Collector of Land Customs, AIR 1967 Cat. 80 at page 87).
From the above judgment and also from personal experience, it is clear that cross-examination is not an essential requisite to satisfy the principles of natural justice. All said and done one fact must be admitted. The quasi-judicial authority is ignorant of Rules of Evidence. In quasi-judicial proceedings, strict compliance of Rules of Evidence is not adhered to. When the adjudicating officer himself is ignorant of the Rules of Evidence, he will not be in a position to Judge which question in cross-examination can be allowed and which cannot be. This ignorance of the adjudicating officer of the Rules of Evidence may lead to serious miscarriage of justice in so far as the department is concerned. Moreover when there is no examination in chief, the question of cross-examination does not arise. The departments cases are not presented by any Prosecutor who examines a witness and then only he is made available to the defence for cross-examination. I, therefore, feel that I have rightly rejected the plea of the defence to cross-examine the witnesses. It is enough when the statement of the concerned persons are placed before them. Whatever they have to say they have already stated in the form of statement and the defence can always find out loopholes in that and argue the case."
7. Coming to the reasoning of the Appellate Collector it reads:
"As regards the contention that the appellant was not allowed to cross-examine certain witnesses resulting in failure of justice, one has to see whether the conclusion about the nature of the article would be affected by what these persons would have said in favour of the appellant. I find that the description of the article in the Panchnama is confirmed during its inspection before me is good enough to justify the conclusion reached by the Dy. Collector. In view of this, it is not necessary to go into these contentions. In this view of the matter, the appeal fails."
8. It is true that the Criminal Procedure Code and the Indian Evidence Act in term are not applicable to the adjudication proceeding. But then, it is settled law that the Fundamental Principles of criminal jurisprudence are applicable to adjudication proceedings. The said proceedings are not only quasi-judicial proceedings but are also quasi-criminal proceedings. The Evidence Act and the Criminal Procedure Code to certain extent embody the principles of natural justice. The adjudication proceeding being quasi-judicial proceeding is also governed by the principles of natural justice.
9. The Deputy Collector, who held the adjudication, was of the view that cross-examination is not a part of the requirement of natural justice. He has further observed that quasi-judicial authorities are ignorant of Rules of Evidence. It is further stated in his order that the adjudicating officer who is ignorant of the Rules of Evidence will not be in a position to judge which question in cross-examination can be allowed and which cannot be. This ignorance, according to the Deputy Collector, may lead to serious miscarriage of justice in so far as the department is concerned. He has further observed when there was no Examination-in-Chief, the question of cross-examination does not arise.
10. The reasons assigned by the Deputy Collector for not allowing cross-examination of certain witnesses are mostly irrelevant. It is true that ordinarily in an adjudication proceeding there is no procedure like examination of witness. Therefore, there would be no Examination-in-Chief, Cross-examination and re-examination as are being done in the courts of law. But then, whenever a request for cross-examination of any witness is granted, the statement earlier recorded of that witness is treated as Examination-in-chief and the witnesses allowed to be cross-examined.
11. The Deputy Collector Shri Moheb. A.M. Is, no doubt, competent to speak about his ignorance of Rules of Evidence. But then, his generalisation that all adjudicating officers are ignorant of Rules of Evidence and that they will not be in a position to judge which question to be allowed in cross-examination and which should not be allowed and his further observation that the ignorance leads to serious miscarriage of justice in so far as the department is concerned, to say the least, not only betrays his ignorance of the knowledge of the other adjudication officers but is also highly presumptuous.
12. If the ignorance of Evidence Act is a ground for not allowing cross-examination as held by the Deputy Collector then on the same reasoning the adjudication which involve disputed questions of law cannot be undertaken by the Customs and Central Excise officers who do not possess Law Degree or studied law. We have come across several adjudication orders Involving disputed questions of law which were considered and resolved by the adjudicating officers who did not possess law degree.
13. The Customs and Central Excise Officers of a particular rank are statutorily conferred with the power of adjudication. The three Acts which they administer are the Customs Act, 1962, the Central Excises and Salt Act, 1944, and the Gold (Control) Act, 1968. In none of these Acts or in the Rules made under the said Acts procedure for holding adjudication are laid down. But all the three Acts provide that before confiscating any goods or imposing penalty on any person the owner of the goods or such person should be informed of the grounds on which it proposed to confiscate the goods or to impose a penalty. Secondly, he should be given an opportunity of making a representation against the grounds of confiscation or imposition of penalty and thirdly, he should be given a reasonable opportunity of being heard in the matter. In short the Acts incorporate one of the facets of the principles of natural justice namely no decision shall be given against a party without giving him a reasonable hearing.
14. Whether a party was given a reasonable opportunity of being heard depends on the facts and circumstances of each case. The law requires that the enquiry must be conducted consistently with the principles of natural justice. Broadly stated the requirements of the principles of natural justice are fair opportunity to adduce evidence, opportunity to cross-examination of either side with regard to the evidence produced and relied on by the adjudicating authority. But then, the adjudicating officer is required to exercise his discretion as to whether he should permit cross-examination of all the witnesses or some alone. This discretion has to be exercised not arbitrarily or capriciously but judicially. While considering the request for cross-examination the adjudicating authority is required to bear in mind the nature of the allegations, the defence taken, the motive behind seeking cross-examination and further whether rejecting of the request would result in grave miscarriage of justice.
15. Though the adjudicating authority may refuse cross-examination of the informants for justifiable reasons, he should invariably allow cross-examination of seizing officers and the panch witnesses as well as the witness who do not come under the category of the informants but on whose evidence the adjudicating authority places reliance. The adjudicating authority should bear in mind that cross-examination is an effective tool to test the veracity of the witness and the reliability of his evidence. It is further necessary to remember that what is relevant in considering the request for cross-examination is not as to whether the Act or the Rules provide such a right but whether the request is relevant, justified or genuine or was it made just to protract the proceedings or with a view to malign or browbeat the witness or that the defence taken does not justify cross-examination.
16. The High Court of Orissa had an occasion to consider the fact of not allowing cross-examination of the seizing officer. In Ramakrishna Agarwala v. Collector of Customs and Central Excise (1981 ELT page 217) the Division Bench of the Orissa High Court observed "It is not disputed before us by learned Standing Council that the petitioner was entitled to an adequate opportunity of substantiating his stand and we are not prepared to accept the position maintained in the counter affidavit that the opinion of the adjudicating officer was final on the question as to what could be relevant in the defence of the petitioner. The matter should have been left to the petitioner and the adjudicating authority should not have taken that burden on him. We are inclined to agree with Mr. Mohante that principles of natural justice have been violated and the petitioner have been denied a reasonable opportunity to substantiate his stand.
17. The Central Board of Excise and Customs in the case of Vaidyanath Agency 1981 ELT page 94 (CBEC) held that the denial of cross-examination of the officer who conducted the inspection of stock is denial of natural justice. As stated earlier what is required to be considered is not as to whether the party has the right to cross-examine a witness but to consider whether the facts and circumstances of the case justify granting of such a request made by the party who was required to rebut the charges and was to establish his defence.
18. In the instant case, the cross-examination of panch witnesses and another witness by name Shri Vasant Rao Shankar Rao on whose evidence the adjudicating authority relied on and who was not the informant was sought. A panch was a gold-smith. The defence of the appellant was that the kada which was seized was not a primary gold but an ornament. It was also the appellants defence that kada was manufactured and worn in the rural areas. Therefore, goldsmith panch was a competent person to give opinion as to the manufacture of kada in rural areas and also whether kada was considered as an ornament in the rural areas. If the cross-examination of the panch witness had been allowed it would have enabled the appellant to rebut the allegation made against him and also established his defence. Both the authorities on extraneous and irrelevant consideration disallowed cross-examination.
19. The Deputy Collector had relied on the statement of Shri Vasantrao Shankar Rao in support of his conclusion that the appellant was dealing in gold and thereby contravened Section 27(1) of the Gold (Control) Act. The Deputy Collector, however, rejected the request to cross-examine Shri Vasantrao Shankar Rao which in the circumstances of the case was unjust and improper. In the whole of his order the Deputy Collector did not even whisper that the request to cross-examine the witnesses was intended to protract the proceedings or was not required to rebut the allegations or to establish the defence. The adjudicating authority had not exercised his discretion properly. The Appellate Collector's reasoning is also not valid. As has been observed by their Lordships of the Orissa High Court what could be relevant for the defence should have been left to the appellant and the Appellate Collector ought not to have taken the burden on him.
20. On consideration of all the aspects I am satisfied that by denying cross-examination of the panch witnesses and Shri Vasant Rao Shankar Rao there was clear violation of the principles of natural justice. The order passed in violation of the rules of natural justice (5 a void order. It can neither be affirmed nor modified nor annulled. Therefore, the Appellate Collector's order confirming the void order of the Deputy Collector is also void order.
21. In the result and for the reasons stated above, I allow this appeal and set aside the orders passed by the authorities below. The matter is remand to the Deputy Collector for passing fresh order after affording an opportunity to cross-examine the witnesses and Shri Vasantrao Shankar Rao and thereafter to pass order in accordance with law.