Gujarat High Court Quashes Customs Authority Order; Reaffirms Importance of Cross-Examination in Legal Proceedings

Court mandates fresh adjudication ensuring principles of natural justice are upheld in the case of M/s Mitesh Impex v. Union of India.

In a significant judgment dated November 25, 2025, the Gujarat High Court set aside an order passed by the customs adjudicating authority, reinforcing the legal principle that witness statements cannot be relied upon without cross-examination, in accordance with Section 138-B of the Customs Act, 1962.

The case involved M/s Mitesh Impex, a partnership firm engaged in the manufacturing of excisable goods, which had been penalized under Sections 112(a) and 114(iii) of the Customs Act. The firm challenged the customs order that relied on statements from witnesses who did not appear for cross-examination. The High Court, comprising Justices A.S. Supehia and Pranav Trivedi, ruled that the adjudicating authority failed to adhere to the principles of natural justice by ignoring the statements of three witnesses who were cross-examined and deposed in favor of the petitioners.

The Court emphasized the necessity for compliance with procedural fairness, highlighting that statements recorded under Section 138-B are inadmissible without providing the assessee an opportunity for cross-examination. The judgment noted the adjudicating authority's reliance on the statements of three absent witnesses, which contravened the Tribunal's earlier directions and violated natural justice principles.

The Court ordered the matter to be remanded for fresh adjudication, instructing the authority to consider all evidence, including statements from witnesses who were available for cross-examination, and to ensure procedural integrity is maintained.

Bottom Line:

Customs Act, 1962 - Admissibility of witness statements under Section 138-B - Statements of witnesses who do not appear for cross-examination cannot be relied upon without following prescribed procedure to establish their relevancy and admissibility, ensuring principles of natural justice are adhered to.

Statutory provision(s): Customs Act, 1962, Section 138-B; Indian Evidence Act, 1872; Central Excise Act; Sections 112(a) and 114(iii) of the Customs Act.

M/s Mitesh Impex v. Union of India, (Gujarat)(DB) : Law Finder Doc Id # 2817198