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2025 (3) TMI 1075 - AT - CustomsLevy of penalties u/s 114(iii) and section 114AA of the Custom Act 1962 - Penalty on F -card holder of Custom House Agent (CHA) - export of Led Flash Torch light by gross over-valuation and mis-declaration with an intention to avail higher export incentive benefit - corroboration to the confession of appellant - admissible evidence or not - HELD THAT - The allegations of attempt to export goods improperly have been confirmed against the appellant solely relying upon his statement alleging the same as the admission on part of the appellant. The copy of the said statement is produced by the department. Perusal thereof reveals that the appellant is admittedly the authorized CHA of the exporting firm the main appellant. He produced all the requisite documents when demanded as that of packing list invoices etc. as were provided to him by the respective exporters or their representatives. He also deposed that his firm prepared check lists of shipping bills on the basis of said documents and thereafter filed the same with the customs authority at ICD TKD. This deposition clarifies that none of the ingredients of attempt appears to be fulfilled as against the appellant. There is no denial of the department that the detained consignment was tallying in quantity with the packing lists submitted along with the shipping bills. Overvaluation - HELD THAT - The appellant in his statement has deposed that he is not aware regarding the actual value of the goods however he accepted that supplier had overvalued the exported goods. In addition he deposed that he was getting 1% of the IGST/Drawback from the exporters in cash in lieu of preparing export documents of the goods which were overvalued by them. However except the said deposition there is no corroborative evidence produced by the department to show the receipt of the said amount by the appellant as an additional amount to his professional charges and nor to show that the appellant had knowledge of overvaluation being done by the exporters prior filing the shipping bills. No doubt the department has taken the stand that admissions need not to be proved but it has also been the settled proposition of law that such admissions which are voluntary and does not get vitiated on account of any of the premises envisaged Section 24 of the Evidence Act are admissible as cogent evidence. As per department the statement of Shri Mali Ram Agarwal is a corroboration to the confession of the appellant. However testimony of any statement recorded in the present case cannot be relied upon for the imposition of penalty unless it stands the test of Section 138B of the Customs Act 1962 which is para materia to sub-section (1) of Section 9D of the Central Excise Act. The plain reading of both these provisions makes it clear that clause (a) and (b) of the said sub-section set out the circumstances in which a statement made and signed by a person before the officer of a gazetted rank during the course of enquiry or proceeding under the act shall be relevant for the purpose of proving the truth of the facts contained therein provided that the person making the said statement has been examined by the adjudicating authority. Section 9D came in for detailed consideration and examination by Hon ble Delhi High Court in the case titled as J.K. Cigarettes Ltd. Vs. CCE 2009 (8) TMI 64 - DELHI HIGH COURT it has been held that in absence of the circumstances specified in Section 9D(1) the truth of the facts contained in any statement recorded by the gazetted officer is not admissible into evidence. The statement of Shri Mali Ram Agarwal has not stood the test of Section 138B of the Customs Act also that the appellant has objected his statement recorded under Section 108A as involuntary recorded under pressure. Resultantly the statements on record are miserably insufficient to prove the alleged act of attempt to export improperly and to use the false information is wrong. For appellant s alleged admission also since same stands retracted subsequently no evidentiary value can be attached that too in absence of any corroborative evidence. Conclusion - The department has failed to prove the guilt of the appellant who otherwise was the authorized CHA had all the KYC documents and had filed the shipping bills based on the documents provided to him by the respective exporter or their representative and that he was not personally sure about the value of the goods imported. The order of imposition of penalty upon the appellant set aside - appeal allowed.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Liability under Sections 114(iii) and 114AA of the Customs Act, 1962 Relevant legal framework and precedents: Section 114(iii) pertains to penalties for attempting to export goods improperly, while Section 114AA concerns penalties for using false and incorrect material. The legal framework requires a demonstration of intent and knowledge of wrongdoing for liability under these sections. Court's interpretation and reasoning: The Tribunal analyzed whether the appellant's actions constituted an "attempt" to export improperly. It defined "attempt" as an effort to accomplish a crime, requiring intent and an act falling short of the intended crime. Key evidence and findings: The appellant was involved as a CHA for the exporting firm and prepared export documents based on information provided by the exporters. The Tribunal found no evidence that the appellant had knowledge of the overvaluation at the time of filing shipping bills. Application of law to facts: The Tribunal concluded that the appellant's actions did not fulfill the criteria for an "attempt" to export improperly, as there was no evidence of intent or knowledge of overvaluation. Treatment of competing arguments: The Department argued that the appellant's admission of receiving 1% of IGST/Drawback was sufficient for penalty imposition. However, the Tribunal emphasized the lack of corroborative evidence and the appellant's subsequent retraction of the statement. Conclusions: The Tribunal held that the appellant was not liable under Sections 114(iii) and 114AA due to insufficient evidence of intent and knowledge. 2. Voluntariness and Admissibility of Statements Relevant legal framework and precedents: The admissibility of statements under Section 108 of the Customs Act requires scrutiny for voluntariness, as per the Evidence Act and relevant Supreme Court precedents. Court's interpretation and reasoning: The Tribunal examined whether the appellant's statements were voluntary. It noted the appellant's claim that his statements were made under pressure and were retracted. Key evidence and findings: The Tribunal found no corroborative evidence supporting the appellant's alleged admissions. It highlighted the need for corroboration, especially when statements are retracted. Application of law to facts: The Tribunal applied the principles from Supreme Court judgments, emphasizing that statements must be scrutinized for voluntariness and corroborated by independent evidence. Treatment of competing arguments: The Department relied on the appellant's statements as admissions. The Tribunal, however, focused on the lack of corroborative evidence and the appellant's retraction. Conclusions: The Tribunal concluded that the appellant's statements were not admissible as evidence due to lack of voluntariness and corroboration. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: "The statements on record are miserably insufficient to prove the alleged act of attempt to export improperly and to use the false information is wrong." Core principles established: The Tribunal reinforced the principle that admissions must be corroborated by independent evidence, especially when retracted, and that penalties under Sections 114(iii) and 114AA require clear evidence of intent and knowledge. Final determinations on each issue: The Tribunal set aside the penalties imposed on the appellant, concluding that the Department failed to prove the appellant's guilt beyond reasonable doubt. The appeal was allowed, and the order of imposition of penalty was overturned.
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