2024 (11) TMI 1241 - AT - Customs

Undervaluation of imported goods - reliability of statement of the co-accused - Penalty on the appellant u/s. 112(a)(i) 112(a)(ii) the Customs Act, 1962 and another penalty u/s. 114AA of the Customs Act, 1962 - as alleged for the purpose of clearing the disputed consignments, Appellant/Superintendent of Customs, SIIB, Mundra had demanded gratification - as alleged Appellant, Superintendent, working then at SIIB, Customs House, Mundra had deliberately misguided his superior officer to aid in clearance of subject consignment illegally and that he handed over customs file to a private person and used a fabricated panchnama in clearance of goods HELD THAT - We find that in the impugned order, the Ld. Commissioner noted that Shri Ankit S. Travadi has affirmed in his statement that he offered amount to accused Customs officers for clearances of disputed goods and he was also actively involved in negotiation with the Customs Officers. The amount is seen to have been arranged through Anagadia and had reached Mundra. In addition to the statement of Shri Mayur Mehta, Shri Ankit Travadi, Shri Chirag Taavadi and Shri Nasir Khan, there are some Audio clips/voice message retrieved from the mobile phone of Shri Nasir Khan which show that Shri Nasir khan and Shri Mayur Mehta sent big amount of illegal gratification to the Customs Officers at Mundra. We find that in the present matter even after the request of appellant for cross-examination of these persons/witnesses and panchas, were not offered. In such circumstances we find that their statements are not reliable evidence against the Appellant. The adjudicating Authority has not examined the persons who have given the statements which have been relied upon to implicate the appellant. Also, no opportunity of cross-examination was given to the appellant to question the basis on which the co-accused has implicated the appellant in this case. When the procedure set out in Section 138B is not followed, the statement of the co-accused has no evidentiary value. Also, in this case the statement of the co-accused has not been corroborated by any other evidence. Except the bald allegation that Appellant had demanded illegal gratification, there is no specific allegation against the appellant to prove that Appellant have done or omitted to do any act which itself rendered the goods liable to confiscation. We also observed that as evident from show cause notice, Shri Ankit S. Travadi reiterated in his statement dtd. 29.09.2017 recorded u/s 108 of the Customs Act, 1962 that the amount of Rs. 8 lakhs arranged through angadia and collected by his younger brother Chirag from Bhuj; that the said amount was given by him to Shri Rajdeep Sinh and Shri Vaibhav Dholakia from whom he had borrowed earlier. Shri Rajeepsinh Jadega and Shri Vaibhav Dholakia have in turn confirmed this fact in their respective statement dtd. 01.11.2017. None of these persons has ever stated that they have paid any money to Appellant. We find that for Customs Act, irrespective of the fact whether the person is an officer of Customs or any other person, penalty for an offence of abetting can be imposed only on establishing a positive act on abetment of another person s act or omission which will make the connected goods liable for confiscation. On careful consideration of the evidence on record and submission made by the appellant, we find that there is no sustainable ground to impose penalties u/s 112 on the appellants in the present case. We also find that section 114AA (supra) is attracted when a person knowingly or intentionally makes, signs or uses or causes to be made, signed or used, any declaration, statement or document which is false or incorrect. Needless to mention that when the appellant had no personal interest in the transaction or that the charge of demand of illegal gratification fails, then automatically it is concluded that there was no knowledge or intention on part of the appellant. Therefore, no penalty could be imposed on the appellant u/s 114AA also. Thus, it is difficult to uphold the orders passed by the Ld. Commissioner imposing penalties on the Appellant.

Summary

Issues:
Allegations of undervaluation of imported goods, counterfeit goods, non-compliance with BIS provisions, and WPC regulations. Imposition of penalties under Sections 112(a)(i), 112(a)(ii), and 114AA of the Customs Act, 1962. Cross-examination request denial, alleged involvement in illegal gratification, backdating of panchnama, and valuation dispute.

Analysis:
The case involves allegations against the Appellant, a former Superintendent of Customs, regarding undervaluation of imported mobile accessories, counterfeit goods, and non-compliance with regulatory provisions. The Customs Authorities detained goods imported by M/s. Crescent Traders, leading to penalties imposed on the Appellant under Sections 112(a)(i), 112(a)(ii), and 114AA of the Customs Act, 1962. The Appellant challenged the findings, arguing against the conclusion of deliberately aiding in illegal clearance and receiving illegal gratification. The Adjudicating Authority relied on statements and audio clips implicating the Appellant but denied the request for cross-examination, which was pivotal in determining the evidentiary value of the statements.

The Appellant contested the allegations of demanding gratification, handing over files to unauthorized persons, and backdating panchnama. The Appellant highlighted discrepancies in witness statements and emphasized the lack of opportunity for cross-examination, citing legal precedents supporting the importance of cross-examination in determining the credibility of evidence. The Appellant also disputed the valuation of goods, asserting that the appraiser had already assessed and enhanced the declared value based on contemporaneous imports, which the Assistant Commissioner had approved.

On the Revenue's side, the Superintendent reiterated the findings of the impugned order, emphasizing the involvement of the Appellant in illegal clearance activities and receiving gratification. However, the Appellate Tribunal, after hearing both sides and examining the case records, found discrepancies in the evidentiary value of the statements and audio clips relied upon by the Adjudicating Authority. The Tribunal noted the lack of corroboration and cross-examination, rendering the statements unreliable and insufficient to prove the allegations against the Appellant.

Ultimately, the Tribunal set aside the penalties imposed on the Appellant under Sections 112(a)(i), 112(a)(ii), and 114AA of the Customs Act, 1962. The Tribunal concluded that there was no sustainable ground to uphold the penalties, considering the lack of concrete evidence and procedural lapses in the adjudication process. The appeal was allowed, providing consequential relief to the Appellant, and the impugned order was overturned in relation to the penalties imposed.