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2024 (2) TMI 1101 - HC - CustomsWhether guilty of fraud - Illegal export of red sanders by misdeclaring it as gypsum boards - red sanders are prohibited goods - Penalty imposed for abettment - statement given to the Customs Officer recorded u/s 108 - Whether the confessional statement of the appellant given to the Customs officers u/s 108 of the Customs Act, 1962 though retracted at a later stage, is admissible in evidence and could form basis for conviction? - HELD THAT - It is well settled principle of law that the statement recorded u/s 108 of the Customs Act is a substantive piece of evidence not only against the maker of the statement, but also against the co-accused. No corroboration to the statement is required. The appellant was given adequate opportunity to provide rebuttal evidence, but nothing produced by him to prove his innocence. It is to be noted, the records relied by the Department indicates, Alexander was summoned under Section 108 of the Customs Act for the second time and his statement was recorded on 19.06.2006 before the Jailer, Central Prison, Madurai. The appellant, vide summon dated 15.06.2006, was asked to appear before Senior Intelligence Officer, D.R.I., Chennai, on 19.06.2006 at 12.00 noon, to give evidence and produce documents in connection with the seizure of red sanders from M/s.Freedom Impex. The appellant had appeared before the Senior Intelligence Officer, D.R.I. at Chennai on 19.06.2006 in response to the summon. The statement recorded remain inconclusive with the noting that the appellant refused to reply to the question when confronted with the statement of John Alexander dated 19.06.2006, which was supposed to be recorded on the same day at Madurai Central Prison. In the impugned order, the conduct of the appellant his refusal to sign the statement been considered as an attended circumstances to infer his guilty. Whereas, the time and sequence apparently indicates that by all probability, the statement of John Alexander purported to have recorded in Madurai Central Prison on 19.06.2006 could not have reached Chennai and shown to the appellant on the same day at 12.00 noon, when he appeared before the Senior Intelligence Officer, D.R.I. Further, by recording that the appellant had refused to sign the statement, the Department has made it as a reason to arrest him and produce before the Magistrate on the same day at about 09.00 p.m. The facts, such as the alleged payment of Rs. 60,000/- through ICICI Bank as remuneration for the illegal export and the alleged transit of Cargo from Chennai to Tirunelveli by the appellant, were never verified, though they are verifiable. The admission that the appellant is a licensed dealer in red sander and he know the exporter John Alexander as Alex of Tutucorin is neither a fact to corroborate the incriminating statement of co-noticee, indicting the appellant. The principle of preponderance of probability been wrongly invoked by CESTAT without any fact either circumstantial or by way of corroboration relate the appellant to the Cargo seized by D.R.I. Not even a remote material available to believe the statement of a tainted person. The decisions of the Hon'ble Supreme Court in K.I.Pavunny's case 1997 (2) TMI 97 - SUPREME COURT or in Naresh J.Sukhawani's case 1995 (11) TMI 106 - SUPREME COURT and Imtiaz Ahmed's case 2022 (12) TMI 1341 - KARNATAKA HIGH COURT does not vouchsafe the impugned order holding the appellant guilty based on the confession of the co-accused without semblance of corroboration or circumstances. If statement of an accomplice accepted without material corroboration, it will be travesty of justice. Therefore this Court holds that the order of the CESTAT impugned in this appeal is liable to be set aside, being perverse and contrary to law. In the result, this Civil Miscellaneous Appeal is allowed. There shall be no order as to costs. Consequently, connected Miscellaneous Petition is closed.
Issues Involved:
1. Admissibility of inculpatory statement of a co-noticee without corroboration. 2. Evaluation of evidence and factual findings by the CESTAT. 3. Legal principles governing the use of statements recorded under Section 108 of the Customs Act. Summary: Issue 1: Admissibility of inculpatory statement of a co-noticee without corroboration The primary legal question was whether an inculpatory statement of a co-noticee can be a conclusive proof against another co-noticee without corroboration. The court examined various precedents, including the Supreme Court's rulings in Naresh J. Sukhawani vs. Union of India and K.I. Pavunny vs. Assistant Collector (HQ.), Central Excise Collectorate, Cochin, which held that statements recorded under Section 108 of the Customs Act are substantive pieces of evidence. The court concluded that while such statements are admissible, prudence requires corroboration, especially when the statement is retracted or made by an accomplice. Issue 2: Evaluation of evidence and factual findings by the CESTAT The CESTAT had dismissed the appellant's appeal, relying heavily on the inculpatory statement of John Alexander, which implicated the appellant, Manivannan. The court found that the CESTAT misapplied the law and distorted facts. The CESTAT's reliance on the uncorroborated statement of a co-accused without verifying easily verifiable facts, such as the alleged payment through ICICI Bank and the transit of cargo, was deemed perverse. The court emphasized that the principle of preponderance of probability was wrongly invoked without any corroborative material linking the appellant to the seized cargo. Issue 3: Legal principles governing the use of statements recorded under Section 108 of the Customs Act The court reiterated that statements recorded under Section 108 of the Customs Act are admissible as substantive evidence. However, the court stressed the need for corroboration, especially when the statement is retracted or made by an accomplice. The court cited the Supreme Court's decision in Kashmira Singh vs. State of Madhya Pradesh, which held that the confession of a co-accused cannot be treated as substantive evidence without corroboration. Conclusion: The court held that the CESTAT's order was perverse and contrary to law, as it relied on the uncorroborated inculpatory statement of a co-accused. The appeal was allowed, and the CESTAT's order was set aside. The court emphasized that accepting the statement of an accomplice without material corroboration would be a travesty of justice.
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