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2020 (10) TMI 741 - HC - CustomsImposition of penalty - designation of appellant on the company - non-executive Chairman of the Company or not - existence of mens rea - reliability of statements recorded - rectification of mistake - HELD THAT - In view of the dictum of law with regard to the statement recorded under section 108 of the Act coupled with concurrent findings of fact arrived at by the adjudicating authority and the CESTAT, we are not inclined to interfere as no perversity is pointed out in such factual findings arrived at by the both the authorities. For the foregoing reasons and considering section 112(a) of the Customs Act which provides that penalty against person who in relation to any goods does or omits to do any act which act or omission would render such goods liable to confiscation under section 111 or abets the doing or omission of such an act, penalty can be imposed not exceeding the value of the goods or five thousand rupees whichever is greater. Therefore, invoking such provision would require mens rea on part of the appellant which is duly established on record. Rectification of mistake - HELD THAT - The CESTAT was justified in rejecting the rectification application as any interference in the impugned order passed by the CESTAT would have resulted in review of its own order which is not permissible under the provisions of the Customs Act. Appeal dismissed.
Issues Involved:
1. Imposition of personal penalty on the appellant by the Customs authorities. 2. Appellant's role and involvement in the company's operations. 3. Admissibility and reliance on statements recorded under Section 108 of the Customs Act. 4. Denial of cross-examination request by the appellant. 5. Rejection of the Rectification of Mistake (ROM) application by the CESTAT. 6. Determination of substantial questions of law. Issue-wise Detailed Analysis: 1. Imposition of Personal Penalty on the Appellant by the Customs Authorities: The Customs authorities imposed a personal penalty on the appellant, which was upheld by the CESTAT. The appellant argued that as a Non-Executive Chairman, he was not involved in the company's day-to-day operations. However, the CESTAT found that the appellant was the authorized signatory, overseeing all company operations and bank accounts, and approving policy matters. 2. Appellant's Role and Involvement in the Company's Operations: The appellant contended that he rarely visited the company and was not involved in the import transactions. However, the Customs Investigation found that the company imported HDPE granules under the DEEC scheme but diverted them to the local market, violating the exemption notification. Statements from company officials indicated that the appellant was aware of and approved the import transactions and the subsequent diversion of goods. 3. Admissibility and Reliance on Statements Recorded Under Section 108 of the Customs Act: The statements of Shri V.V. Kamath, Shri Srinivasa Naik, and Shri Vinayak D. Gavadi, recorded under Section 108 of the Customs Act, were crucial in establishing the appellant's involvement. The court held that such statements are admissible in evidence and can form the basis for conviction, as they are not considered statements of accused persons but are part of the investigation process. 4. Denial of Cross-Examination Request by the Appellant: The appellant's request for cross-examination of witnesses was denied by the adjudicating authority. The court supported this decision, noting that cross-examination is not a right in departmental proceedings and that the evidence on record was sufficient to hold the appellant liable. 5. Rejection of the Rectification of Mistake (ROM) Application by the CESTAT: The appellant's ROM application was rejected by the CESTAT, which concluded that reconsidering the facts and evidence would amount to a review of its own order, which is not permissible. The court upheld this decision, citing the Supreme Court's ruling that rectification cannot involve reappreciation of evidence or correction of debatable points. 6. Determination of Substantial Questions of Law: The court found no substantial question of law arising from the CESTAT's order. The findings of fact by the adjudicating authority and the CESTAT were based on substantial evidence, and no perversity was pointed out. The court dismissed the appeal, affirming the penalties imposed on the appellant. Conclusion: The court upheld the imposition of penalties on the appellant, emphasizing the admissibility of statements under Section 108 of the Customs Act and the sufficiency of evidence to establish the appellant's involvement in the company's operations and the diversion of imported goods. The denial of cross-examination and the rejection of the ROM application were also upheld, with no substantial question of law warranting interference.
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