2020 (4) TMI 184 - AT - Customs

Imposition of penalty u/s 112 (a) of the Customs Act, 1962 - import of the cigarettes without the mention of MRP - Confiscation - demand based on statements of co-noticee - HELD THAT - The bill of lading revealed the consignee as M/s. Ankit Enterprises and there was no name of the appellants either in the bill of lading or in the invoices issued by the foreign exporters. It is only during the recoding of the statements, the co-noticee impleaded the present appellants. When the appellants were contacted, they denied any role in the import of goods in question. It is well settled law that the statements of the co-noticee cannot be adopted as a legal evidence to penalize the accused unless the same are corroborated in material particulars by independent evidence. Even the statements of various persons are not conclusive to establish the appellants as the importer of the goods as the same are in the nature of hear-say evidence. No deponent has clearly mentioned that they were fully aware of the fact of the appellants being the owner of the goods and have merely mentioned that they were told so by the other concerned persons. There is virtually no evidence in the present case so as to show that the appellant were the actual importer of the goods - Revenue has not made any enquiries with the supplier of the goods so as to establish as to who ordered the import of the goods. The entire case of the revenue is based upon the statements of the other persons, who have not been even offered for cross examination. The appellants statements are ex-culpatory and there is no evidence produced by the revenue to show that the same are false statements. In the absence of any evidence to the contrary, to impose penalty under Section 112 (a) of the Customs Act, which provides for imposition of penalty in case of the asseessee importer being related to the smuggled goods, is not justified and warranted. Penalties set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Dismissal of appeals by Commissioner (Appeals) as barred by limitation.
2. Imposition of penalty under Section 112 (a) of the Customs Act, 1962.

Issue 1: Dismissal of appeals by Commissioner (Appeals) as barred by limitation:
The Commissioner (Appeals) dismissed the appeals as barred by limitation due to a delay of 94 days and non-deposit of the required pre-deposit of 7.5%. However, the Tribunal noted that the appeals were initially filed within the limitation period, but were returned by the registry for not being accompanied by pre-deposit evidence. The appeals were re-filed within the limitation period, and the pre-deposit has now been made. Consequently, the Tribunal held that the appeals should not have been dismissed as time-barred and proceeded to decide them on merits.

Issue 2: Imposition of penalty under Section 112 (a) of the Customs Act, 1962:
The challenge in both appeals was the imposition of a penalty of ?50,000 under Section 112 (a) of the Customs Act, 1962. The case involved the import of a container with undeclared cigarettes, seized for violation of legal Metrology Act, 2009. Various statements were recorded during post-seizure investigations implicating the appellants in the import. However, the Tribunal observed that mere statements, without corroboration and independent evidence, cannot be sole grounds for penalization. The statements were hearsay and lacked concrete evidence linking the appellants to the imported goods. The Revenue failed to establish the appellants' ownership or involvement in the import, and no thorough investigations were conducted. The Tribunal held that the penalty imposition was unjustified, as there was no conclusive evidence proving the appellants' connection to the smuggled goods. Therefore, the penalties were set aside, and the appeals were allowed in favor of the appellants.

In conclusion, the Tribunal ruled in favor of the appellants, setting aside the penalties imposed under Section 112 (a) of the Customs Act, 1962, due to lack of substantial evidence linking them to the smuggled goods. The dismissal of the appeals by the Commissioner (Appeals) as time-barred was also overturned, allowing the appeals to be decided on their merits.