Accused Entitled To Cross-Examine Statements Of Natural Person Recorded Under Customs Act, 1962: Calcutta High Court

The Calcutta High Court has held that the accused is entitled to cross-examine natural persons whose statements were recorded under the Customs Act, 1962.

The bench of Justice Debangsu Basak and Justice Md. Shabbar Rashidi observed that the appellant or accused can be said to be prejudiced for not having been granted the right of cross-examination in as much as the appellant lost the opportunity to establish the truthfulness of the statement made by the natural person.

The issue raised was whether the adjudicating authority was right in refusing an opportunity for cross-examination of natural persons whose statements recorded under Section 108 of the Customs Act, 1962, had been referred to and relied upon in the adjudication order or not.

A consignment of live crabs was intercepted by customs authorities, and in one basket, foreign exchange was seized. The stationery used for export bore the name of the appellant's firm. However, no signature of the appellant had been produced on any document. The appellant had claimed that he was not aware of the foreign currency found in the consignment. No nexus between the appellant and the foreign currency found had been established. The appellant had been proceeded against and arrested under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA). The appellant had been released from custody in the proceedings, and the authorities abandoned the proceedings.

The proceedings under FERA had been conducted on materials consisting of statements by Paresh Saha.

The appellant contended that the statement recorded under Section 108 of the Customs Act, 1962, cannot be used in FERA proceedings. The penalty order passed by the adjudicating authority relying upon the statement of Paresh Saha was in derogation of the law.

The department contended that the right of cross-examination cannot be considered a mandate in a quasi-judicial proceeding under FERA and could depend upon the facts and circumstances of each case. Unless the noticee demonstrates prejudice suffered by him for want of the opportunity of cross-examination, a question of violation of natural justice does not arise.

The court held that since the authorities had introduced evidence of natural persons in the adjudication proceedings, the appellant was entitled to cross-examine natural persons.

Case Title: Monotosh Saha Versus Special Director, Enforcement Directorate, Foreign Exchange Management Act

Case No.: FEA 2 of 2009

Date: 31/08/2023

Counsel For Appellant: Farook Razack

Counsel For Respondent: Vipul Kundalia

Click Here To Read The Order