2020 (5) TMI 369 - HC - Customs

Smuggling - Contraband Gold - Confiscation - imposition of penalty u/s 112(a) of the Customs Act, 1962 - HELD THAT - Reading of Section 122 of the Customs Act, 1962 indicates that in every case under the said Chapter i.e., Chapter XIV under which anything is liable to be confiscated or any person is liable to be imposed with the penalty has to be adjudicated under Clause (a) of Section 122 of the Act by the Principal Commissioner of Customs or Commissioner of Customs or a Joint Commissioner of Customs without limit. Under Clause (b) the penalty has to be adjudicated by the Assistant Commissioner of Customs or Deputy Commissioner of Customs where the value of goods came to be confiscated does not exceed ₹ 5 Lakhs and under Clause (c) same shall be adjudicated by a Gazetted Officer of Customs lower in rank than an Assistant Commissioner of Customs where the value of the goods confiscated would not exceed ₹ 50,000/-. Undisputedly, in the instant case, value of goods was more than ₹ 5 lakhs and as per the appraisal value, who had appraised the gold bar so confiscated and had certified the weight at 2566.05 grams of 24 carot gold of foreign origin he had valued at ₹ 77,87,962/-. Before levy of penalty show cause notice came to be issued by Additional Commissioner of Customs proposing to levy penalty on appellant. It would clearly emerge from the orders of the original authority as affirmed by the appellate authority the statement of appellant recorded under Section 108 of the Customs Act penalty under Section 112(a) came to be imposed. In fact, whatsapp messages exchanged between the noticees including the appellant herein, which formed part and parcel of the show cause notice and adjudication order, it came to be held that appellant herein has admitted in his statement furnished under Section 108 of the Customs Act and his role in the act of smuggling of gold - In fact, appellant has not retracted his retrospective statement and it has never been contended by the appellant that statement has been obtained from him under threat or duress or coercion. It is only after show cause notice was issued proposing to levy penalty, appellant has tried to retrace his steps and not before the said date. Appeal dismissed.

Summary

Issues: Authority of the order passed, reliance on statements under Customs Act, imposition of penalty, competency of the authority, involvement in smuggling activity, retraction of statement, cross-examination.

Authority of the order passed:
The judgment dealt with the authority under Section 122 of the Customs Act, 1962, which specifies the adjudication of confiscation and penalties. It was highlighted that the Additional Commissioner of Customs had the competence to pass the order in this case. The value of the confiscated goods exceeded the threshold for adjudication by the Assistant Commissioner of Customs, thus falling under the jurisdiction of the Additional Commissioner. The argument challenging the authority of the Additional Commissioner was dismissed based on the interpretation of Section 2(8) of the Act.

Reliance on statements under Customs Act:
The judgment discussed the reliance on statements recorded under the Customs Act, particularly Section 108, for imposing penalties. The appellant's statement was recorded under Section 108, and it was noted that the appellant did not retract the statement or claim coercion. The appellate tribunal found that the appellant had admitted involvement in smuggling activity based on the statement and WhatsApp communications. The judgment emphasized that the safeguards under Section 164 of the Cr.P.C. were not required for statements recorded by Customs officers under Section 108.

Imposition of penalty:
The case involved the imposition of a penalty under Section 112(a) of the Customs Act, 1962. The penalty was contested by the appellant, arguing that it was based on the statement of a co-employee and that the procedure followed was erroneous. However, the appellate authorities upheld the penalty, citing the appellant's admission of guilt in the statement recorded under Section 108. The judgment highlighted that the appellant did not retract the statement even after the show cause notice was issued.

Competency of the authority:
The competency of the Additional Commissioner of Customs to pass the order imposing penalties and confiscating goods was a crucial aspect of the judgment. The judgment clarified that the Additional Commissioner fell within the definition of the Principal Commissioner of Customs or Commissioner of Customs under Section 2(8) of the Act for the purposes of Chapter XIV. Therefore, the order passed by the Additional Commissioner was considered valid and in accordance with the law.

Involvement in smuggling activity and retraction of statement:
The judgment addressed the appellant's involvement in smuggling activity, as evidenced by the statements recorded under the Customs Act and WhatsApp communications. It was noted that the appellant did not retract the statements made before the Customs Officer, where he admitted his role in the smuggling activity. The appellant's attempt to backtrack on the statement after the issuance of the show cause notice was highlighted as a key point in the case.

Cross-examination:
The judgment discussed the lack of cross-examination of the appellants, noting that they never retracted their statements made before the Customs Officer. The appellate tribunal found that the appellants' versions given during the original statements were consistent with their WhatsApp communication, indicating their involvement in smuggling activity. The lack of retraction and the consistency of statements were crucial factors in the decision.

The judgment ultimately dismissed the appeal, affirmed the order passed by CESTAT, and made no order as to costs. The application for stay was also dismissed in light of the appeal's dismissal.