2013 (10) TMI 273 - HC - Customs

Validity of Order passed by Appellate Committee, Ministry of Commerce Penalty - goods imported under the DEEC scheme had been diverted and sold in the market. - The imported material itself could not be seized and located. It was not found to be in possession of the petitioner. No investigation was carried out to locate and seize the imported consignments. There is no evidence to show that any payment was made by the petitioner for the imported consignment - Held that - the oscillating statements made by Ramesh R. Desai as it was sometimes stated that the petitioner had purchased the imported goods and on the other occasion it was stated that DEEC book itself was sold to the petitioner. The order of the Collector of Customs (Judicial) also refers to the statement of the petitioner recorded on 5th October, 1990 under Section 108 of the C Act. In this statement the petitioner had stated that he had not purchased the said CRCA sheets from Ramesh R. Desai, though he was engaged in import of steel from various countries for trading purpose. He has also stated that he arranged for import of steel on behalf of actual users as a letter of authority holder and had never arranged for import of steel other than in cases of actual users. The petitioner has further accepted that he knew Ramesh R. Desai, who was dealing in steel but he did not have any business dealings with Ramesh R. Desai. One authority has relied upon and accepted the statements of Ramesh R. Desai and whereas the other authority on the basis of the same statements felt that this was not sufficient. It is apparent that there has been error in the decision making process. Relevant statements had been ignored and not taken into consideration. The appellate order dated 22nd July, 1996, is brief and cryptic and does not deal with the contentions and issues raised by the petitioner. The said order cannot be sustained. the order of Appellate Committee, Ministry of Commerce quashed - matter remanded back for reconsideration.

Issues Involved:
1. Validity of the penalty imposed on the petitioner.
2. Reliance on the contradictory statements of Ramesh R. Desai.
3. Lack of corroborative evidence.
4. Discrepancies between the decisions of different authorities.

Detailed Analysis:

1. Validity of the penalty imposed on the petitioner:
The petitioner challenged the order dated 22nd July 1996, which confirmed the penalty imposed by the Additional Chief Controller of Imports and Exports. The initial penalty of Rs.75 lakhs was reduced to Rs.25 lakhs by the appellate order. The petitioner argued that there was no substantial evidence to justify the penalty, relying solely on the statements of Ramesh R. Desai recorded under Section 108 of the Customs Act, 1962. The petitioner contended that the statements were contradictory and insufficient to implicate him.

2. Reliance on the contradictory statements of Ramesh R. Desai:
The petitioner argued that the statements of Ramesh R. Desai, a self-confessed wrongdoer, should not be the basis for imposing a penalty. The petitioner referenced Supreme Court judgments in Haroon Haji Abdulla Vs. State of Maharashtra and Chandan & Anr. Vs. State of Rajasthan, emphasizing that the statements of an accused cannot be solely relied upon without corroboration. The court noted that the Additional Chief Controller of Imports and Exports had relied on these statements, despite their contradictory nature.

3. Lack of corroborative evidence:
The court observed that the evidence against the petitioner was primarily based on the statements of Ramesh R. Desai. There was no documentary evidence or independent corroboration to prove the petitioner's involvement in the import and sale of the imported cold rolled sheets. The imported material was neither seized nor located in the petitioner's possession. The court highlighted that the Collector of Customs (Judicial) had examined the same statements and found them insufficient to impose a penalty on the petitioner.

4. Discrepancies between the decisions of different authorities:
The court noted that the Collector of Customs (Judicial) had exonerated the petitioner based on the same evidence, while the Additional Chief Controller of Imports and Exports had imposed a penalty. The Collector of Customs (Judicial) concluded that the petitioner, along with other individuals, could not be held liable for the unauthorized disposal of the goods after clearance. The court emphasized that the appellate order dated 22nd July 1996 was brief and cryptic, failing to address the contentions and issues raised by the petitioner comprehensively.

Conclusion:
The court found that there were errors in the decision-making process, with relevant statements being ignored and not considered. The appellate order did not adequately address the contentions raised by the petitioner. Consequently, the court issued a writ of certiorari, quashing the impugned order dated 22nd July 1996. The case was remanded for a fresh decision by the Appellate Committee, Ministry of Commerce, with instructions to consider all aspects independently. The deposit made by the petitioner would abide by the new order, and the Appellate Committee was directed to dispose of the case within six weeks. The writ petition was disposed of without any order as to costs.

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