2006 (8) TMI 499 - AT - Customs

Summary

Issues:
1. Imposition of penalty on the appellant under Section 112(b) of the Customs Act.
2. Evidence against the appellant regarding the alleged offense.
3. Rejection of the request for cross-examination by the Adjudicating Authority.
4. Lack of material indicating the appellant's involvement in abetting the offense.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Bangalore was filed against the OIO No. 9/2004-Cus., dated 27-2-2004 passed by the Commissioner of Customs & Central Excise, Hyderabad-II Commissionerate. The charges involved three individuals carrying gold without foreign exchange to pay Customs Duty, violating Notification 171/94-Cus., dated 30-9-1994. The appellant's only charge was that his cell phone was used by another individual, Nusrat, to make calls related to the case. The Adjudicating Authority imposed a penalty of Rs. 5 lakhs on the appellant under Section 112(b) of the Customs Act, based on this connection.

The appellant's representative argued that there was no substantial evidence against the appellant, except for the use of his cell phone by Nusrat. The Adjudicating Authority denied the appellant's request for cross-examination of key individuals involved in the case, including K. Neelakanta Rao. It was highlighted that Neelakanta Rao, a crucial witness, stated that he did not know the appellant and was not present during the alleged calls. Moreover, the appellant was out of the country during the period in question, indicating his lack of involvement in the alleged offense.

Upon reviewing the case, the Tribunal found a lack of concrete evidence to justify the penalty imposed on the appellant under Section 112(b) of the Customs Act. It was noted that the Hon'ble High Court of Andhra Pradesh had already exonerated the appellant from similar charges. Consequently, the Tribunal concluded that the penalty on the appellant was not sustainable, and therefore, set aside the penalty of Rs. 5 lakhs imposed on the appellant, ultimately allowing the appeal.

In conclusion, the Tribunal's decision was based on the insufficiency of evidence linking the appellant to the alleged offense, the denial of the appellant's right to cross-examination, and the absence of material indicating the appellant's involvement in abetting the offense. The judgment emphasized the importance of substantial evidence and due process in imposing penalties under the Customs Act, ultimately leading to the favorable outcome for the appellant in this case.