2013 (1) TMI 735 - AT - Customs

Undervaluation of goods - Hawala transactions - Penalty u/s 112 - Held that - Penalties have been imposed on the appellant on the basis of a statement recorded during the course of investigation and as well as on the basis of the statement of co-noticees. In this case, the appellant has specifically asked for cross-examination of some of the witnesses whose statements were relied upon by the adjudicating authority but cross-examination of some was not granted. Therefore, reliance made on the basis of co-noticees statement is incorrect. - Further, the adjudicating authority has not denied the contents of the affidavit/medical certificate filed by the appellant during the course of proceedings. In the absence of denial of the contents of both documents, therefore the statement recorded on 11-11-2009 is not corroborated with concrete evidence for imposing the penalty on the appellant. Moreover, the decision of Special Bench of the Settlement Commission is not binding on the Tribunal and Tribunal is bound by the decision of this Tribunal. - Therefore relying on the decision of Vijay R. Bohra (2010 (10) TMI 218 - CESTAT, AHMEDABAD), in this case also proceedings against the appellant come to an end. Therefore, no penalty is imposable.- Decided in favour of assessee.

Summary

Issues:
Delay in filing appeal, waiver of pre-deposit requirement, penalty imposition based on statements, relevance of Settlement Commission's decision, cross-examination of witnesses, reliance on co-noticees' statements, denial of documents, binding nature of Settlement Commission's decision, applicability of previous judgments.

Analysis:
The appellant filed an appeal with a stay application and a plea for condonation of the 21-day delay in filing the appeal. The delay was condoned by the Member. The issue was deemed narrow, leading to the waiver of the pre-deposit requirement for final hearing. The appellant, a director of a company involved in foreign exchange, faced penalties under the Customs Act due to undervaluation of imported goods and money transfers via hawala. The appellant contested the penalty based on the Settlement Commission granting immunity to main parties and the unreliability of statements recorded against them.

The appellant cited various case laws to support their argument, emphasizing the retraction of statements and lack of cross-examination opportunities. The respondent argued against the relevance of the cited cases and defended the penalty imposition based on the Settlement Commission's decision and the credibility of the statements. After hearing both sides, the Member analyzed the case laws and found the penalties imposed on the appellant unjustified due to reliance on statements without cross-examination and denial of appellant's documents.

The Member highlighted that the Settlement Commission's decision was not binding on the Tribunal, and previous judgments like Vijay R. Bohra were referenced to support the appellant's case. The Tribunal ruled in favor of the appellant, allowing the appeal and disposing of the stay application. The decision was pronounced on 18-1-2013, providing consequential relief to the appellant. The judgment emphasized the importance of due process and the need for concrete evidence before imposing penalties, ultimately leading to the appellant's success in the appeal.