Case Note & Summary
The petitioner, Sameer Shah (real name Javed Shaikh), was employed as a clearing agent with Airport Sorting Authority (APSO). A criminal conspiracy was alleged involving Naishad Kapadia, Mohmmad Manaswal, Ketan Kothari, and others to defraud the Government of India by importing Iridium Sponge from Singapore at an understated value. Based on intelligence, a speed post parcel was intercepted, and statements of several individuals were recorded under Section 108 of the Customs Act, 1962, including the petitioner. A show cause notice was issued to the petitioner and six others. Except for the petitioner and one Mohammadi Manaswala, the other noticees approached the Settlement Commission, which passed final orders directing payment of duty with interest. The adjudicating authority (Respondent No. 2) imposed a penalty of Rs. 90,05,396/- on the petitioner under Section 112 of the Customs Act, 1962 vide Order-in-Original dated 13th March, 2013. The petitioner challenged this order by filing Writ Petition No. 2948 of 2020. The court directed the petitioner to file an affidavit and scheduled a personal hearing on 24th February 2020, which was held on 29th April 2020. During the hearing, the petitioner requested cross-examination of six witnesses whose statements were recorded under Section 108 and relied upon. This request was denied by Respondent No. 2, who passed the impugned order dated 8th May, 2020 dismissing the appeal. The petitioner then filed the present writ petition seeking quashing of that order. The court considered the issue of whether denial of cross-examination violated principles of natural justice. The court held that the statements recorded under Section 108 were used against the petitioner, and without affording an opportunity to cross-examine the witnesses, the proceedings were vitiated. The court quashed the order dated 8th May, 2020 and remanded the matter to Respondent No. 2 for fresh consideration after granting the petitioner an opportunity to cross-examine the witnesses whose statements were relied upon. The court also directed that the petitioner be given a reasonable opportunity of hearing and that the matter be decided afresh within four months.
Headnote
A) Customs Law - Penalty under Section 112 - Denial of Cross-Examination - Customs Act, 1962, Sections 108, 112 - The petitioner was imposed a penalty of Rs. 90,05,396/- under Section 112 of the Customs Act, 1962 based on statements of witnesses recorded under Section 108. The petitioner's request for cross-examination of those witnesses was denied by the adjudicating authority. The court held that such denial violates principles of natural justice as the statements were used against the petitioner without affording an opportunity to test their veracity. The impugned order was quashed and the matter remanded for fresh consideration after granting cross-examination. (Paras 1-6) B) Customs Law - Settlement by Co-Noticees - Effect on Penalty - Customs Act, 1962, Sections 112, 127 - The fact that other noticees settled their cases with the Settlement Commission does not preclude the petitioner from contesting the penalty or from seeking cross-examination of witnesses whose statements were relied upon. The court noted that the petitioner did not approach the Settlement Commission and thus the proceedings against him continued independently. (Paras 4-5)
Issue of Consideration
Whether the denial of the petitioner's request for cross-examination of witnesses whose statements were recorded under Section 108 of the Customs Act, 1962, and relied upon to impose penalty under Section 112 of the said Act, violates principles of natural justice.
Final Decision
The court allowed the writ petition, quashed the order dated 8th May, 2020, and remanded the matter to Respondent No. 2 for fresh consideration after granting the petitioner an opportunity to cross-examine the witnesses whose statements were relied upon. The matter to be decided afresh within four months.
Law Points
- Natural justice
- right to cross-examination
- Section 108 Customs Act
- 1962
- Section 112 Customs Act
- penalty proceedings
- quasi-judicial authority
- denial of opportunity
- violation of principles of natural justice
