2022 (4) TMI 214 - AT - Customs

Levy of penalty u/s 114 of the Customs Act - appellant is a freight forwarder - export of non-basmati rice - prohibited goods or not - submissions made in the reply to show cause notice were not considered by the adjudicating authority - evidentiary value of retracted statements - whether case can be foisted on the basis of the statements of co-accused - recovery of incriminating evidences during search or not - recovery of fabricated documents/ passport/ stamps of government officials - charges can be levelled solely and only on the basis of uncorroborated statements of co-accused or not - HELD THAT - It is not the case of demand of duty from this appellant under Section 28(4) of Customs Act. Accordingly, the issue of jurisdiction is not involved and the show cause notice have been rightly issued on the allegation of violating the provisions of the Customs Act including bringing of the prohibited goods in the customs area, for export, by resorting to mis-declaration. From a conjoint reading of the statements of this appellant alongwith the statement of Sh. Sinder Pal, Sh. Rakesh Kumar and Others, it is evident that this appellant have knowingly connived for money with Sh. Sinder Pal and Sh. Abhishek Gupta and others, in the export of prohibited goods, non-basmati rice, by resorting to mis-declaration and fraud. Further, admittedly in the course of various statements recorded on different dates from this appellant he has admitted the modus operandi and have stated in detail the modus operandi as well as the amount of remuneration he was getting from Sh. Sinder Pal, which leads to the conclusion that he had connived with Sh. Sinder Pal and Sh. Abhishek Gupta in the export of prohibited goods for money. The penalty imposed upon him but in the facts and circumstances reduce the penalty from ₹ 8 lakhs to ₹ 4 lakhs. So far the retraction is concerned before the Court of Duty Magistrate, the same is not of much consequence as the appellant have admitted the misdoing in his various statements recorded on various dates and such statements are supported by co-accused and also corroborated with the live consignment for export, intercepted, and forgery noticed by the Customs Officers to which the appellant has also admitted. The appeal is allowed in part.

Issues Involved:
1. Imposition of penalty on the appellant under Section 114 of the Customs Act.
2. Mis-declaration and fraudulent export of non-basmati rice.
3. Use of forged documents and seals.
4. Role and involvement of various individuals and entities in the fraudulent activities.
5. Jurisdiction of the Additional Commissioner (SIIB) to issue the show cause notice.
6. Evidentiary value of retracted statements.
7. Corroboration of statements by co-accused.

Issue-wise Detailed Analysis:

1. Imposition of Penalty on the Appellant:
The central issue in this appeal is whether the penalty of ?8 lakhs imposed on the appellant, a freight forwarder, under Section 114 of the Customs Act, was justified. The appellant was found to have facilitated the export of non-basmati rice by mis-declaring it as sanitary ware.

2. Mis-declaration and Fraudulent Export of Non-Basmati Rice:
The appellant facilitated the export of non-basmati rice, which was prohibited under DGFT Notification No. 39(RE-2007)/2004-2009, by using the IEC codes of other companies and declaring the goods as sanitary ware and gas regulators. The containers were seized and found to contain non-basmati rice instead of the declared goods.

3. Use of Forged Documents and Seals:
The investigation revealed that the appellant and his associates used forged rubber stamps of Central Excise and fake export documents to facilitate the fraudulent export. The appellant admitted to preparing fictitious export documents and using forged stamps and signatures of Central Excise officials.

4. Role and Involvement of Various Individuals and Entities:
The statements of various individuals, including Sh. Rakesh Dhamir, Sh. Rakesh Kumar, and Sh. Sinder Pal, indicated their involvement in the fraudulent export activities. The appellant admitted to receiving payments for facilitating the export and was aware of the mis-declaration. The CHA firms, M/s Neptune Cargo Movers Pvt. Ltd., and Sh. Rajinder P. Kapoor, were also implicated for their roles in the clearance process.

5. Jurisdiction of the Additional Commissioner (SIIB):
The appellant contested the jurisdiction of the Additional Commissioner (SIIB) to issue the show cause notice. However, it was held that the issue of jurisdiction was not involved as it was not a case of demand of duty under Section 28(4) but rather a case of violating the provisions of the Customs Act by bringing prohibited goods into the customs area for export through mis-declaration.

6. Evidentiary Value of Retracted Statements:
The appellant retracted his statements before the Court of Duty Magistrate, arguing that a retracted statement had no evidentiary value. However, the Tribunal found that the retraction was not of much consequence as the appellant had admitted his involvement in various statements recorded on different dates, which were corroborated by the statements of co-accused and the live consignment intercepted by Customs Officers.

7. Corroboration of Statements by Co-Accused:
The Tribunal noted that the statements of the appellant were supported by the statements of co-accused and were corroborated with the live consignment intercepted and the forgery noticed by the Customs Officers. The appellant's detailed admission of the modus operandi and the remuneration received from Sh. Sinder Pal and others led to the conclusion that he had knowingly connived in the export of prohibited goods for money.

Judgment:
The Tribunal confirmed the penalty imposed on the appellant but reduced it from ?8 lakhs to ?4 lakhs, considering the facts and circumstances. The appeal was allowed in part.

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