2019 (11) TMI 851 - HC - Customs

Imposition of penalty u/s 112(b) of the Customs Act, 1962 - Confiscation of goods - gold biscuits for foreign origin cut into two pieces - Nokia mobile phone - reliability on statements - HELD THAT - As far as the statement made by the respondent no.2 Sujeet Kumar under Section 108 of the Customs Act, 1962 is concerned, the same would certainly not be hit by bar of admissibility under Section 25 of the Evidence Act, but the evidentiary value of such statement would also depend on various other factors. The statement under Section 108 of the Customs Act and its retraction are both required to be corroborated and proved - The same cannot be treated as substantive piece of evidence in terms of Section 3 of the Evidence Act, as it is not given by the witness and not subjected to cross-examination. It is also not given on oath. The Tribunal has taken note of the statement of Sujeet Kumar and his retraction made from jail in its order. The Tribunal has given a categorical finding that the respondent no.1 herein had produced retail invoices of M/s Bhawana International in order to substantiate his claim that he had purchased two pieces of gold bars from Chandni Chowk, Delhi on 14.04.2014 and on his instructions his brother Chandreshwar Prasad Sah (Respondent no.3) had handed over the gold pieces to Sujeet Kumar (Respondent no.2) for carrying it to Patna to hand it over to Mahavir Prasad to make gold ornaments in exchange of the said gold. Under Section 130 of the Customs Act, 1962 an appeal would be maintainable before the High Court from every order passed in appeal by the Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having relation to the rate of duty of customs or to the value of goods for purposes of assessment) only if the High Court is satisfied that the case involves a substantial question of law. Appeal dismissed.

Issues Involved:
1. Legality of the Tribunal's order setting aside the Commissioner (Appeals)' order.
2. Admissibility and evidentiary value of statements made under Section 108 of the Customs Act, 1962.
3. Verification and genuineness of retail invoices submitted by the respondents.
4. Substantial question of law for appeal under Section 130 of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Legality of the Tribunal's Order:
The appellant challenged the Tribunal's order, arguing it was flawed both legally and factually. The Tribunal had set aside the Commissioner (Appeals)' order, which had reduced the penalty imposed by the adjudicating authority. The Tribunal found that the investigating officers failed to verify the retail invoices produced by the respondents, which were VAT paid and contained VAT TIN and PAN. The Tribunal emphasized that the purchase documents could not be discarded without verification. The Tribunal concluded that the lower authorities had relied on initial statements without corroborating the documents provided by the respondents.

2. Admissibility and Evidentiary Value of Statements under Section 108 of the Customs Act:
The appellant contended that the Tribunal failed to treat the statements made under Section 108 of the Customs Act as evidence. The Tribunal noted that while such statements are not hit by the bar of admissibility under Section 25 of the Evidence Act, their evidentiary value depends on corroboration and proof. The Tribunal considered the retraction of Sujit Kumar's statement from jail and concluded that the initial statement alone could not substantiate the case without further verification.

3. Verification and Genuineness of Retail Invoices:
The Tribunal found that the investigating officers did not verify the retail invoices submitted by the respondents, which showed VAT payment and contained VAT TIN and PAN. The Tribunal criticized the lack of effort to corroborate the documents with the records of M/s Bhawana International. The Tribunal emphasized that the purchase documents should prevail over the initial statements unless proven false or fabricated. The Tribunal noted that the proprietor of M/s Bhawana International was shown only photographs of the seized gold and not the actual invoices.

4. Substantial Question of Law for Appeal under Section 130 of the Customs Act:
The High Court considered whether the case involved a substantial question of law under Section 130 of the Customs Act. The appellant failed to demonstrate that any substantial question of law was involved. The High Court noted that the Tribunal's findings were based on proper appreciation of evidence and were neither illegal nor perverse. The High Court concluded that the appeal was not maintainable in the absence of a substantial question of law.

Conclusion:
The High Court dismissed the appeal, stating that the Tribunal's order was based on sound reasoning and proper appreciation of evidence. The High Court found no substantial question of law to warrant an appeal under Section 130 of the Customs Act. The parties were directed to bear their own costs.

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