Ramesh Wadhera vs. Additional Commissioner Of Customs

Held

The Court held that the right to cross-examination is not an unfettered or absolute right and that prejudice must be demonstrated. The Court referred to its decision in M/s Vallabh Textiles v. Additional Commissioner Central Tax GST, Delhi East, which held that parties cannot convert SCN proceedings into mini-trials by making blanket requests for cross-examination. Specific reasons for needing cross-examination of particular witnesses must be provided. In this case, the Court found the Petitioner's request for cross-examination to be vague and an attempt to delay proceedings, especially since the alleged firms were fraudulent and non-existent, and the Petitioner was aware of the co-noticees. Therefore, the impugned order denying cross-examination was upheld. The Court allowed the Petitioner to file an additional reply to the SCN by January 20, 2026, after which a personal hearing would be scheduled. The SCN is to be decided within three months from the date of the judgment.

Facts

The Petitioner, Ramesh Wadhera, filed a writ petition challenging a Show Cause Notice (SCN) dated September 16, 2016, and an order dated May 16, 2019, issued by the Additional Commissioner of Customs (Export). The SCN alleged that the Petitioner and his son engaged in fraudulent availment of drawbacks by exporting readymade garments through numerous bogus firms, overvaluing the goods to claim higher drawbacks. The Directorate of Revenue Intelligence (DRI) conducted searches, finding the alleged firms non-existent. The Petitioner requested cross-examination of DRI officials and co-noticees, which was denied by the impugned order. The Petitioner's request for cross-examination was made via letters dated January 4, 2017, and May 14, 2019. The impugned order stated that necessary details were available in the SCN, most noticees were untraceable, and statements under Section 108 of the Customs Act, 1962, were admissible.

Key Issues

1. Whether the Petitioner has a right to cross-examine DRI officials and co-noticees in proceedings initiated by a Show Cause Notice under the Customs Act, 1962, particularly when the Petitioner alleges prejudice if such cross-examination is denied? Petitioner's arguments: The Petitioner contended that the right to cross-examination is essential for a fair hearing and that denying it would cause prejudice. Reliance was placed on the Supreme Court judgment in Eicher Tractors v. Commissioner of Customs. The Petitioner also referred to coordinate bench decisions in similar matters involving the Petitioner and others. Revenue's arguments: The Respondent argued that the right to cross-examination is not absolute and depends on the facts of each case. Prejudice must be shown, and a blanket request for cross-examination of all persons whose statements were recorded is not sustainable. The Respondent highlighted that the firms were alleged to be fraudulent and non-existent, and the Petitioner was aware of the co-noticees. The Respondent also emphasized that statements recorded under Section 108 of the Customs Act, 1962, are admissible evidence.