2020 (6) TMI 39 - HC - Customs

Jurisdiction - proper officer to adjudicate the case - Adjudication of confiscation and penalties - Smuggling - contraband item - Gold - Section 122 of the Customs Act, 1962 - HELD THAT - A plain reading of Section 122 would indicate 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 - In the instant case, order under Section 122 having been passed by the Additional Commissioner of Customs under Chapter XIV, said authority would fall within the definition of Section 2(8) and as such order passed by the Additional Commissioner of Customs cannot be faulted or in other words, contentions raised by Sri.Dakshina Murthy, learned counsel appearing for appellant cannot be accepted and it stands rejected. The 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 - there is no substantial question of law involved in this appeal for being admitted, adjudicated and answered. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Competency of the authority passing the order in original dated 04.08.2017 under Section 122 of the Customs Act, 1962.
2. Validity of penalty imposed under Section 112(a) of the Customs Act based on statements recorded under Section 108 of the Customs Act.

Issue 1: Competency of the authority passing the order

The judgment delves into the interpretation of Section 122 of the Customs Act, 1962, which specifies the authorities competent to adjudicate confiscation and penalties. The Additional Commissioner of Customs passed the order in question, ordering confiscation of contraband gold and imposing a penalty. The provision outlines that confiscation or penalty may be adjudged by the Principal Commissioner of Customs, Commissioner of Customs, or a Joint Commissioner of Customs without limit. The value of the goods confiscated in this case exceeded the threshold for the Assistant Commissioner of Customs or Deputy Commissioner of Customs. The judgment clarifies that the Additional Commissioner of Customs falls within the definition of Principal Commissioner of Customs or Commissioner of Customs for the purposes of Chapter XIV, thus validating the authority's competence to issue the order.

Issue 2: Validity of penalty based on recorded statements

The judgment scrutinizes the imposition of penalty under Section 112(a) of the Customs Act, relying on statements recorded under Section 108 of the Act. The appellant contested the reliance on these statements, alleging coercion and lack of competency of the authority. However, the appellate tribunal upheld the penalty, emphasizing that the appellant admitted involvement in smuggling activities in his statement under Section 108. The judgment highlights that the appellant did not retract his statement or claim coercion until after the show cause notice was issued. The tribunal noted the appellant's admission in his statement and communication evidence, concluding that there was no requirement for retraction or cross-examination. Ultimately, the court found no substantial question of law for consideration, leading to the dismissal of the appeal and affirming the CESTAT's decision.

In conclusion, the judgment meticulously analyzes the competency of the authority passing the order and the validity of the penalty based on recorded statements under the Customs Act. It clarifies the legal provisions, evidentiary considerations, and procedural aspects, ultimately upholding the penalty and dismissing the appeal.