1. This is an appeal filed before the Central Board of Excise and Customs, which under Section 35P of the Central Excises and Salt Act, 1944, stands transferred to this Tribunal to be disposed of as if it were an appeal presented before he Tribunal.
2. The issue in this appeal is whether the "scoured wool" exported by the appellants against 10 Shipping Bills between 13.5.1974 and 1.6.1974 was liable to export duty under Item 12 of the Second Schedule to the Customs Tariff Act, 1975 (referred to for convenience as "Export Tariff Schedule"). It appears that these 10 shipments were provisionally "assessed" under section 18 of the Customs Act and were allowed to be exported after taking a deposit of 2.5% of the amount of duty calculated at 25% ad valorem. Subsequently, after a chemical test had been conducted, the Customs authorities finalised the assessments, holding that the goods covered by the 10 consignments were liable to duty as raw wool, and demanded the differential duty amount of Rs. 41,206.06 (there is some controversy as to whether the final assessment was made on 10.6.1975 or 18.6.1975, but this is not material in the view which we propose to take). The appellants contested the demand.
The matter was adjudicated by the Additional Collector of Customs and Central Excise, Ahmedabad who ultimately, in his order under appeal, rejected their contentions and confirmed the demand for differential duty.
3. Both before the Additional Collector and before us a number of authorities as to what scoured wool is, and whether it can be considered as raw wool, were relied upon by the appellants. Before us, however, Shri Ashok Desai, the learned Counsel for the appellants, relied Strongly on certain preliminary grounds, to which reference is made below.
4. Shri Ashok Desai pointed out that the very same issue, namely whether the scoured wool exported by the appellants was liable to excise duty as raw wool, had been taken up to the then revisional authority under the Customs Act, namely the Central Government. In its Order No. 167-169 of 1972 dated 3.6.1972 the Central Government had held that the scoured wool exported by the appellants could not be found to be the same as raw wool, which alone attracted the export duty. In this view they had allowed the revision applications and had directed refund of the export duty to have been erroneously levied.
5. Shri Ashok Desai strongly urged that this decision of the then revisional authority, in a statutory revision application, was binding on the lower authorities and that the Collector was precluded from taking a decision which was in conflict with the above decision of the revisional authority.
6. Shri Ashok Desai further pointed out that in the adjudication proceedings the Additional Collector had relied on certain opinions said to have been expressed by two persons whom he described as "independent experts and unbiased authorities". One of these was stated to be from the Indian Council of Agricultural Research, New Delhi, and the other from the Central Sheep and Wool Research Institute, Jaipur.
Shri Ashok Desai filed copies of letter 19.10.1976 addressed by the Additional Collector to Shri P.L. Kama (the Advocate who was then appearing for the applicants). In this letter, which was issued after a personal hearing had been held, the Additional Collector had quoted what appeared to be extracts from two letters from the two Institutions mentioned above. He had called upon the advocate to send further submissions, if any, on or before 26.10.1976. Shri Kama had sent a reply dated 27.10.1986 to the Additional Collector. In this reply he had asked for an opportunity to cross-examine the two persons whose opinions were now sought to be relied upon. He had also challenged the statement that they were independent persons and that they were experts. To this letter the Additional Collector replied by a letter dated 4.11.1976. In this letter he stated that "your request to cross-examine two officers whose opinions were supplied to you would not be possible and practicable. However, you may make your submissions if any in the matter". The Additional Collector also offered the appellants an opportunity of further personal hearing if so desired by them.
7. In his further letter dated 13.11.1976 Shri Kama coutended that it was unfortunate that the appellants were being deprived of the right of cross-examination. However, he gave some comments on the opinions of the "experts", and sought a fortnight's time to make further submissions. In a further letter dated 23.11.1976 the Advocate stated that he had not been able to get further instructions from his clients because of some illness in their family and that he had little to add to what was stated in his letter dated 13.11.1976. Thereafter, the Additional Collector, without any further hearing, passed orders in the matter, to the effect indicated in para 2 above. In para 6 to his order, the Additional Collector has referred to the opinions of the two "experts" enclosed with his letter dated 19.10.1976, and given the substance of the further developments with reference to these opinions which have been set out in preceding paragraphs. In para 23 of his order, which constitutes a part of his findings, the Additional Collector has relied on the two-opinions, which he has reproduced and described as "self-explanatory".
8. Shri Ashok Desai argued that the procedure adopted by the Additional Collector was in obvious contravention of the principles of natural justice. He reiterated that the Additional Collector was precluded from taking a different view in a matter which had already been decided by a higher authority, and that too in proceedings between the same parties.
Even assuming that he had authority to do so, this could only be on the basis of very cogent reasons. He had sought to rely on the opinions of two persons who were described as experts. However, only extracts from the opinions said to have been expressed by them had been furnished to the appellants, and not the full text of their communications. Further, even though the appellants had asked for cross-examination of these two persons, indicating clearly that they proposed to challenge their status as experts and also to controvert the opinions expressed by them, the Additional Collector had denied them the opportunity to do so. He had nevertheless relied on the opinions of these two persons in coming to his findings. In the light of these facts, Shri Ashok Desai submitted that the order was contrary to the principles of natural justice and should be set aside without going into the merits of the case.
9. As there appeared to be substance in Shri Ashok Desai's arguments on this preliminary ground, we asked Shri Chandramouli, the learned Senior Departmental Representative, for his comments. Shri Chandramouli submitted; that it was not always possible to call for cross-examination every person whose opinion was relied upon. Thus, many text books and reference books were cited in such proceedings. But it was not the practice to call the authors of such publications for cross-examination. Apart from this, Shri Chandramouli also relied upon the decision of the Supreme Court in the case of Kanungo & Co. v.Collector of Customs, Calcutta and Ors., reported in 1983 E.L.T. 1486 (S.C.) for the proposition that "principles of natural justice did not require that in every matter, the person who has given opinion should be examined in the presence of the Appellant or allowed to be cross-examined by the person concerned in respect of the statements made before the Customs authorities".
10. We find ourselves unable to accept the arguments of Shri Chandramouli. On the first point, we must observe that there is a clear difference between a citation from a text book or a work of reference, and an opinion given with reference to a particular case. In the former case, since the views expressed are without reference to any particular case, there is a presumption of their objectivity. The identity and the qualifications of the writers are usually set our prominently, and the standing of various text books and works of reference and of their authors is also generally well-known. It is also not practicable in the normal course to call such authors to give evidence: indeed, some of them may be dead, many would be living in foreign countries, and the better known ones would be spending all their time giving evidence if this were to be a regular practice. On the other hand, when a person gives an opinion with reference to a particular case, his objectivity cannot be assumed as a matter of course. Further, it is to be presumed that he would be expressing his opinion in the knowledge that he would be required, if necessary, to stand by it and be examined with reference to it. The fact that he is available for giving the opinion would also indicate that he should be available for being examined with reference to it. The Additional Collector's conclusion that it was not "possible and practicable" to make the two "experts" available for cross-examination cannot, therefore, be held to be a satisfactory response to the demand of the appellants that they should be made available.
11. As regards the case of Kanungo & Co., relied upon by the learned SDR, we find that the facts in that case were substantially different.
Certain watches had been seized by the Customs authorities on the ground that they were smuggled watches. The dealers from whom they were seized sought to establish the legal acquisition/importation of these watches by producing cash memos and vouchers saying that they had been purchased from various other parties. The Customs authorities then made enquiries with these other parties, and found that the explanation given by the dealers was false and fictitious. Before the Supreme Court, the dealers had contended that all the persons from whom enquiries were alleged to have been made by the Customs authorities should have been produced in order to enable the dealers to cross-examine them; and that since this was not done, there had been a breach of natural justice. The Supreme Court repelled this contention, with the observations which have been referred to in para 9 above.
12. Shri Ashok Desai urged, and we agree with him, that the case of Kanungo & Co., was not on all fours with the case now before us. In that case, enquiries had been made by the Customs authorities from other parties on a question of fact as to whether the dealers acquired the watches from them. The other parties had apparently denied such acquisition. The dealers had sought that all such other parties should be allowed to be cross-examined by them, and the Supreme Court had held that the principles of natural justice did not require that they should have been given such an opportunity. Shri Ashok Desai pointed out that in that case the enquiries were as regards questions of fact. In the present case, the opinions of the "experts" were on the basis of their status as experts, and on a matter relating to tariff classification.
The appellants had legitimately asked for an opportunity, firstly to verify whether the persons were really experts, and secondly to rebut the opinions said to have been expressed by them. Denial of this opportunity undoubtedly amounted to a denial of natural justice.
13. We find force in these arguments of Shri Ashok Desai. We would also point out a further difference, namely that in Kanungo & Co's case it was the dealer himself who had furnished the names of the various other parties from whom he claimed to have acquired the watches. Therefore, in a sense, they were his own witnesses. He could not legitimately demand to be allowed to cross-examine his own witnesses, if their response to the enquiries of the Customs authorities was not what he wished it to be.
14. In the result, we find that the preliminary objection taken by Shri Ashok Desai on the grounds of a breach of the principles of natural justice is well-founded. Shri Ashok Desai has fairly stated that the appellants have no objection to the matter being remanded to the Collector for re-adjudication. He also appreciates that the witnesses who might then have been relied upon by either side may not be available now and does not express any objection to other witnesses being relied upon, or evidence taken into account, so long as the principles of natural justice are fully complied with. We accordingly set aside the Additional Collector's Order under appeal without going into the merits of the case, and remand the matter back to the Collector of Central Excise, Ahmedabad, for re-adjudication after giving full opportunity to the appellants to cross-examine any experts on whose evidence the Department proposes to rely, and to allow the appellants to produce expert evidence in rebuttal. It is made clear that in the de novo re-adjudication neither the Department nor the appellants will be restricted to the evidence or material already placed on record.