2018 (8) TMI 1354 - HC - Customs

Quantum of penalty u/s 114(i) of Customs Act - cross-examination of witnesses - Statement made under duress and/or threat - Held that - The impugned order of the Tribunal has examined these very contentions raised by the appellant before us and reduced the penalty imposed upon Smt. Bharti Bhutada and the appellant from ₹ 25 lakhs to ₹ 1 lakh and ₹ 50 lakhs to ₹ 5 lakhs taking into account the role attributable to each of them in illegal export of foreign currency. This is a finding of fact and in the absence of it being pointed out that the role of Smt. Bharati Bhutada was much more than mere handing over the foreign currency, no reason to interfere with the impugned order can arise. Cross-examination of witnesses - Held that - The impugned order of the Tribunal has considered the same and held that some of the witnesses had been offered for cross-examination and those not offered for cross-examination were not shown to have prejudiced the appellant in any manner - no fault in these fact can be found in not granting cross-examination of some of the witnesses. Statement made under duress and/or threat - Held that - It has been recorded that there was no complaint made by the appellant when he was produced before the Magistrate. Besides holding that retraction of the statement by the appellant was an after thought. Thus, partially dismissing the appeal while reducing the quantum of penalty. There is no merit requiring interference - appeal dismissed - decided against appellant.

Summary

Issues:
Challenge to penalty reduction under Customs Act

Analysis:
1. The appellant challenged the penalty reduction under Section 114(i) of the Customs Act in this appeal. The Customs, Excise and Service Tax Appellate Tribunal (Tribunal) had reduced the penalty from ?50 lakhs to ?5 lakhs in its order dated 15th January, 2015. The appellant raised questions of law regarding the justification of upholding the penalty adverse to them and sustaining the penalty imposed.

2. The appeal stemmed from an incident where the appellant was intercepted by the Air Customs Intelligence Unit at Mumbai Airport in 2006, resulting in the recovery of foreign currency equivalent to ?1.59 crores. Subsequently, penalties were imposed on the individuals involved, including the appellant. The Commissioner of Customs confiscated the currency and imposed penalties, which were later challenged in the Tribunal.

3. The Tribunal, in its order dated 15th January, 2015, upheld the penalties but reduced the quantum for all individuals involved. The penalty imposed on the appellant was reduced from ?50 lakhs to ?5 lakhs. The appellant contended that the penalty was excessive compared to the penalty imposed on another individual involved in the incident, and raised concerns regarding the lack of opportunity for cross-examination and the alleged coercion leading to statements made by the appellant.

4. The Tribunal's order addressed the appellant's contentions and found no reason to interfere with the penalty reduction. It considered the roles of each individual in the illegal export of foreign currency and reduced penalties accordingly. The Tribunal also dismissed the appellant's claims of lack of cross-examination opportunities, citing the Supreme Court's decision in Telestar Travels Pvt. Ltd. v. Special Director of Enforcement (2013 TIOL 17 SC FEMA) to support its stance.

5. Regarding the appellant's claim of statements made under duress, the Tribunal found no merit in the argument, noting that the appellant did not complain about coercion when produced before the Magistrate. The retraction of statements was deemed an afterthought. Ultimately, the Tribunal partially dismissed the appeal while maintaining the penalty reduction.

6. The Tribunal's decision was deemed a possible view based on the facts presented, and no substantial question of law arose from the case. Additionally, the appeals filed by other individuals involved and the Revenue seeking penalty enhancements were also dismissed, further solidifying the Tribunal's decision.

7. In conclusion, the High Court upheld the Tribunal's decision and dismissed the appeal, as no grounds for interference were found. The penalties were proportionately reduced after examining the roles of each individual involved in the illegal export of foreign currency.