Case Law Details
Mango Tree Traders Vs Commissioner of Customs(Audit) (Madras High Court)
Case Background
Mango Tree Traders challenged an order dated January 23, 2024, before the Madras High Court. This order had rejected the declared description of their goods as “unflavoured supari (betel nut product); APL supari (boiled betel nut product)” and reclassified them as “areca nuts split.” Consequently, the customs duty and penalty were revised based on the new classification.
Petitioner’s Arguments
The petitioner, Mango Tree Traders, argued that the order violated principles of natural justice by denying their request for cross-examination of key officials involved in the assessment. Their counsel relied heavily on precedents set by the Supreme Court in Andaman Timber Industries v. Commissioner of Central Excise, Kolkata – II and the Calcutta High Court in Commissioner of Customs, Central Excise & S. T., Siliguri v. Subodh Das. They highlighted that the Food Safety and Standards Authority of India (FSSAI) report supported their classification, but contradictory conclusions were drawn based on other reports.
Respondent’s Position
The learned senior standing counsel for the respondents, Rajendran Raghavan, accepted notice for the respondents. They contended that the right to cross-examination is not absolute and depends on the specifics of each case. They argued that all relevant documentary evidence had been provided to the petitioner, fulfilling the requirements of natural justice.
Court’s Analysis
The court examined the petitioner’s request for cross-examination of various officials involved in the assessment process. The impugned order noted that the petitioner did not provide a cogent reason for this request. It referenced judgments from the Supreme Court and the Madras High Court, emphasizing that the right to cross-examination is not an absolute necessity and is contingent on the circumstances of each case.
The court found that all relevant documents, including statements, reports, and relied-upon documents (RUDs), had been supplied to the petitioner. The judgment from Andaman Timber Industries was considered, wherein the denial of cross-examination was significant because the witnesses’ statements were the foundation of the impugned order. In the present case, the petitioner’s counsel failed to demonstrate how the witnesses’ statements formed the basis of the order.
Conclusion and Directions
The Madras High Court concluded that there was no infirmity in the assessing officer’s decision to deny cross-examination, as it aligned with established principles of law. The court noted that the petitioner had the option to appeal the order. Given the circumstances, the court disposed of the writ petition by allowing the petitioner to file a statutory appeal.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order in original dated 23.01.2024 is challenged in this writ petition. By such order, the declared description of goods as “unflavoured supari (betel nut product); APL supari (boiled betel nut product)” was rejected and it was held that the products are “areca nuts split”. As a consequence, the declared classification in the relevant bills of entry were rejected and the goods were reclassified. The assessable values were revised on that basis and customs duty and penalty was imposed.
2. The petitioner assails the said order on the ground that principles of natural justice were violated by rejecting the petitioner’s request for examination. The petitioner also raises other grounds on the merits of the order, but the same are not of significance at this juncture.
3. Learned counsel for the petitioner submits that the denial of the right of cross-examination vitiates the order. In support of this contention, learned counsel relies upon the judgment of the Supreme Court in Andaman Timber Industries v. Commissioner of Central Excise, Kolkata – II, 2017 (50) STR 93 (SC) (Andaman Timber Industries), particularly paragraph 6 He also relies upon the judgment of the Division Bench of the Calcutta High Court in Commissioner of Customs, Central Excise & S. T., Siliguri v. Subodh Das, 2023 (385) E.L. T. 693 (Calcutta), particularly paragraph 9 thereof. He also points out that the report of the FSSAI with regard to classification was in the petitioner’s favour, but a contrary conclusion was drawn on the basis of other reports.
4. Rajendran Raghavan, learned senior standing counsel, accepts notice for the respondents.
5. At paragraph 19 of the impugned order, it is recorded that the petitioner made a request for cross-examination of the auditors, assessing officers, officers who approved the assessment, the examining staff and the chemical examiner, who tested the samples before assessment. It is further recorded that no cogent reason was adduced for cross-examination. After referring to judgments of the Hon’ble Supreme Court and this Court to the effect that the right of cross-examination is not an absolute requirement and depends on the facts and circumstances, it was concluded that all relevant documentary evidence such as copies of statements, mahazars, reports and RUDs had been provided to the petitioner. In fact, the order contains a categorical statement that all documentary evidence relied upon in the show cause notice had been provided to the petitioner. In these facts and circumstances, the conclusion of the assessing officer does not contain any infirmity and is in consonance with principles laid down by the Supreme Court and this Court. In fact, it is clear from paragraph 6 of the judgment of the Supreme Court in Andaman Timber Industries that interference with denial of cross-examination, in that case, was on account of the fact that the statements of the witnesses, whom the assessee requested to cross-examine, he basis of the impugned order. Learned counsel for the petitioner is unable to point out as to how the statements of the witnesses sought to be cross-examined form the foundation of the present order. The order impugned in this writ petition can be appealed against. The present writ petition was filed in the last week of April 2024. If the period of pendency of this writ petition is excluded, the petitioner should be permitted to prosecute a statutory appeal.
6. For reasons set out above, W.P.No.13353 of 2024 is disposed of by permitting the petitioner to file a statutory appeal. If such appeal is filed within ten days from the date of receipt of a copy of this order, the Tribunal is directed to receive and dispose of such appeal on merits without going into the question of limitation. There will be no order as to costs. Consequently, connected miscellaneous petition is closed.
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