S. 138B Customs Act | Witness Statements Inadmissible Without Cross-Examination Unless Non-Availability Proven: Gujarat High Court

The Gujarat High Court has said that under Section 138B Customs Act, statements of witnesses given before a concerned officer, who are unavailable for cross-examination by the assessee, can be considered relevant only when the circumstances of unavailability are established, and a finding is given on the impossibility to secure their presence. The petitioner entity argued that the Central Excise and Service Tax Appellate Tribunal, in the petitioner's Customs Appeal, while remanding the matter, had directed the adjudicating authority to grant an opportunity to the petitioner to cross-examine the witnesses, who were not cross-examined in the first instance. It was argued that the authority had passed the order, ignoring the statements of three witnesses, who had deposed in favour of the petitioners after cross-examination, while concurrently considering the evidence of three other witnesses, who were not cross-examined in the first round of adjudication. A division bench of Justice AS Supehia and Justice Pranav Trivedi referred to Section 138B(1)(b), which relates to the admissibility of the statements in evidence in the interest of justice, which are made by the witness, who is available during the course of inquiry or proceedings, and has offered for cross-examination. "Thus, clause (b) envisages and introduces the element of cross-examination of the witness who has given the statement before the officer during the course of inquiry or proceedings. Unless an opportunity of cross-examination is given to the person (assessee) against whom the statement of such witness is proposed to be used, the same is inadmissible in evidence, since the denial or absence of cross-examination of the witness, and the admissibility of such statement in evidence will be in violation of the principles of natural justice and also against fair play and equity," the bench said. The court however, noted that Section 138B(1)(a) authorises the officer to consider the relevancy of the statements of that witness, who, under the circumstances narrated, is unavailable for cross-examination. It said that language of Section 138B(1) (a) is akin to Section 32 of the Indian Evidence Act (Section 26 Bhartiya Sakshya Adhiniyam), which prescribes the evidentiary value of the statement of a witness who is not available to testify.The court said:"However, the quintessential feature is that the statement of such witness can be treated as relevant only when the circumstances mentioned in clause (a) regarding the non-availability of the person/witness are established and a finding is recorded to the extent that it is impossible to secure the presence of the person. At this stage, while attempting to secure the presence of such a witness, an opportunity is also required to be offered to the assessee for securing presence of the witness at his/her expense. The process of securing the witness should not be delayed as per the provision of clause (a), and effort should be made for a reasonable time, and the inquiry or the proceedings should not procrastinated beyond a reasonable time".The bench said that in case all attempts have failed to secure the presence of the witness within a reasonable time, then a finding has to be recorded on this aspect. Then after such a finding is recorded by the officer, the officer has to give an opportunity to the assessee to respond to the statement of such a witness."The statement of such witness, recorded during the course of inquiry or proceedings, cannot be used against the assessee unless he is confronted with the statement and has been afforded full opportunity to deal with the same. The officer cannot blindly rely on the bare statement of the witness unless some corroborative material is produced to support such statement, and the assessee is offered an opportunity to rebut the same. The officer has to record reasons, based upon the material placed before him, for arriving at a definite finding. In our opinion, in either of the scenarios envisaged in clause (a) or clause (b), the evidence has to pass the test of admissibility in the interest of justice," the bench said. When the court posed a specific query to the standing counsel for the authority regarding non-cross-examination of three witnesses, the counsel was unable to dispute the same. However, the counsel said that as per Section 138-B of the Customs Act, statements of three witnesses, who did not remain present despite having been given four opportunities, can still be considered as evidence.Referring to the tribunal's order the court said, "...it appears that there were six witnesses whose evidence was considered against the petitioner's bereft of their cross-examination, though requested as per the provisions of Section 138-B of the Act, and by placing reliance on the judgments of various High Courts. Hence, the matter was remitted back to the adjudicating authority for fresh adjudication after granting the...

S. 138B Customs Act | Witness Statements Inadmissible Without Cross-Examination Unless Non-Availability Proven: Gujarat High Court

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