2014 (10) TMI 713 - AT - Customs

Penalty u/s 112 - Seizure of goods - Held that - Adjudicating Authority first to satisfy himself that the statement recorded during the course of investigation and thereafter if necessary allow the cross-examination of the persons whose statement has been relied upon. As in this case, this has not happened. Moreover, the statement of Shri Sujit B. Satam has not directly implicated the appellant as accused for the impugned consignment. With regard to the earlier consignments, where the corroborative statement has been recorded by the investigating team, in this case, it has held that for the earlier consignment, there is no evidence on record, same cannot be confiscated. When this finding has been made by the Adjudicating Authority and same has been accepted by the department. In these circumstances, no penalty is warranted against the appellant as the appellant is not importer (as no bill of entry is filed), no inculpatory statement is recorded for the impugned consignment and the provisions of Section 138B of the Act were not followed - Decided in favour of assessee.

Summary

Issues involved:
Penalty imposed under Section 112A of the Customs Act, 1962 for alleged illicit import of contravened goods without filing a bill of entry.

Detailed Analysis:

Issue 1: Alleged Involvement of Appellant in Import of Contravened Goods
The case involved the appellant appealing against a penalty of Rs. 5 lakhs imposed under Section 112A of the Customs Act, 1962 for the alleged import of a consignment of cigarettes under the guise of computer casing. The investigation revealed that the container was stuffed with foreign-origin cigarettes, leading to the seizure and initiation of proceedings. Statements of various individuals were recorded, implicating the appellant and others. The appellant denied involvement, stating no bill of entry was filed, and no inculpatory statement was recorded regarding the import. The appellant argued that cross-examination of co-noticees was allowed, but not for the appellant. The appellant cited precedents to support the contention that penalty was unwarranted.

Issue 2: Defense and Prosecution Arguments
The appellant's counsel argued that the appellant had no nexus with the import, emphasizing the lack of evidence implicating the appellant. In contrast, the Assistant Revenue (AR) submitted that statements indicated the appellant's involvement and past illicit imports. The AR highlighted the appellant's attempt to flee and subsequent arrest, with an unretracted statement supporting the case. The AR cited legal precedents to strengthen the argument.

Issue 3: Adjudication and Legal Analysis
Upon hearing both sides, the Tribunal analyzed the evidence. Notably, no bill of entry was filed, and the appellant did not claim to be the importer. The Tribunal scrutinized statements, emphasizing that the appellant was unaware of the consignment's import, as confirmed by involved parties. The Tribunal referenced legal provisions and court decisions regarding cross-examination and the necessity of following procedural requirements. It noted discrepancies in the evidence and the lack of direct implication of the appellant in the illicit import. The Tribunal highlighted the absence of evidence for earlier consignments and the failure to follow statutory procedures, leading to the conclusion that no penalty was warranted against the appellant.

Conclusion:
The Tribunal set aside the penalty against the appellant, allowing the appeal with consequential relief. The decision was based on the lack of evidence implicating the appellant, procedural irregularities, and the failure to meet statutory requirements. The judgment emphasized the importance of following legal procedures and ensuring substantial evidence before imposing penalties under the Customs Act, 1962.