2017 (12) TMI 728 - AT - Customs

Principles of natural justice - penalty - case of Revenue is that appellant like Kirit Dhruv who is a repeated offender threaten the basic fabric of the society and any leniency towards them will encourage further fraudsters. - Held that - it is expected that the appellant shall not follow any dilatory tactics but shall cause appearance before adjudication authority to reduce the litigation as expeditiously as possible - appeal is remanded to learned Adjudicating Authority - appeal allowed by way of remand.

Summary

Issues Involved:
1. Violation of natural justice.
2. Allegations of smuggling and misdeclaration.
3. Role and penalties imposed on individuals involved.
4. Evidence and circumstantial proof.
5. Cross-examination and retraction of statements.
6. Typographical error in the imposition of penalties.
7. Negative equality defense.

Issue-wise Detailed Analysis:

1. Violation of Natural Justice:
The appellant contended that natural justice was violated as they were not allowed to cross-examine witnesses, and the adjudication order was passed without considering the available evidence. The Tribunal acknowledged this grievance, stating that the violation of natural justice is incurable at the appellate stage and that the appellant deserves a hearing. The appellant was directed to apply for a hearing in January 2018, and the Authority was instructed to pass an appropriate order within three months of the last hearing date.

2. Allegations of Smuggling and Misdeclaration:
The Revenue's submission detailed the smuggling operation, where high-value drugs were misdeclared as Epoxy Resin. A consignment was detained, revealing that M/s Raj Associates was a fake entity used for importing Dexamethasone Sodium Phosphate. The imports were conducted at the behest of an individual who orchestrated the smuggling operation. The goods were confiscated, and duties were confirmed for both the present and past consignments.

3. Role and Penalties Imposed on Individuals Involved:
The adjudication order summarized the roles of various individuals:
- Mastermind: The main individual behind the smuggling racket, who placed orders and used a fake IEC for imports.
- Accomplice: The proprietor of the importing firm, who allowed his IEC to be used for a fee and was involved in clearing the goods.
- Middle Man: Facilitated the clearance process and received payments for his role.
- Delivery Boy: Linked the CHA and the importer, handling documents and consignments.

Penalties were imposed on each individual based on their involvement, with significant amounts for both present and past consignments.

4. Evidence and Circumstantial Proof:
The Tribunal noted that the overwhelming evidence gathered during the investigation remained unrefuted. This included statements, call records, financial transactions, and past associations between the individuals involved. The evidence clearly established the mastermind's role and justified the penalties imposed under Section 112(a) of the Customs Act, 1962.

5. Cross-examination and Retraction of Statements:
The appellant argued that cross-examination was not allowed, but the Tribunal held that the investigation was based on both statements and circumstantial evidence. The principles of natural justice did not require cross-examination in this context. The retraction of statements was deemed an afterthought, and the Supreme Court has held that retracted statements can be relied upon if corroborated by independent evidence.

6. Typographical Error in the Imposition of Penalties:
The appellant argued that penalties were imposed under a non-existent section (112 A). The Tribunal clarified that this was a typographical error and that penalties were actually imposed under Section 112(a). The Supreme Court has ruled that an order remains valid if it can be justified under the correct provision of law.

7. Negative Equality Defense:
The appellant contended that another individual should have been charged, but the Tribunal dismissed this argument, citing that negative equality cannot be used as a defense. Actions in accordance with the law and justified cannot be challenged based on the non-action against others.

Conclusion:
The appeal was remanded to the Adjudicating Authority for a fresh hearing, with instructions to consider the submissions and evidence presented by the Revenue. The appellant was expected to cooperate and not employ dilatory tactics. The appeal of Revenue regarding the non-imposition of redemption fine would also be considered during the re-adjudication process.