2023 (2) TMI 331 - AT - Customs

Penalty imposed on the Respondents under Section 112(a) and (b) of the Customs Act 1962 dropped - It was alleged that the Respondents had admitted to have been involved in several smuggling activities including the one seized on 09.06.2019 - statement recorded before the Customs official is a statement recorded under section 161 of the Criminal Procure Code or not - evidence collected by the Customs officials under section 108 of the Customs Act - existence of corroborative evidence or not - retraction of statements - Monetary amount involved in the appeal. Maintainability of appeal - Monetary amount involved in the appeal - HELD THAT - In view of instructions issued by the Ministry of Finance Department of Revenue Central Board of Excise Customs F.No.390/Misc./163/2010-JC dated 17.12.2015 the revenue involved in the Appeals are nil as Commissioner(Appeals) has not imposed any penalty on the Respondents therefore Appeals are not maintainable before this Tribunal. On merits also it is found that except the statements recorded by the DRI dated 10.06.2019 and 11.06.2019 which were retracted by the Respondents on the first opportunity available on 12.06.2019 before the Ld.CMM Kolkata no other corroborative evidence has been brought on record. In that circumstances penalty on the Respondents are not imposable. In the case of Surjeet Singh Chhabra 1996 (10) TMI 106 - SUPREME COURT there was an evidence of recovery of gold in the possession of the accused apart from the statement recorded under Section 108 of the Customs Act 1962. In that circumstances the decision is not applicable. The Ld.Commissioner(Appeals) has rightly dropped the penalty against the Respondents as there is no corroborative evidence on record in support of the statement made before DRI Officers which were retracted on first available opportunity before the Ld.CMM and no cross-examination of any witness has been granted to the Respondents - Appeal of Revenue dismissed.

Summary

Issues Involved:
1. Maintainability of the Appeals.
2. Validity of the Penalty Imposed under Section 112(a) and (b) of the Customs Act, 1962.
3. Admissibility and Corroboration of Statements Made to DRI Officers.
4. Violation of Principles of Natural Justice.

Issue-wise Detailed Analysis:

1. Maintainability of the Appeals:
The Respondents argued that the Appeals are not maintainable as per the instructions issued by the Ministry of Finance, Department of Revenue, Central Board of Excise & Customs (F.No.390/Misc./163/2010-JC dated 17.12.2015), which stipulate that Appeals should not be filed before the Tribunal if the amount involved is less than Rs.10.00 Lakhs. The Tribunal agreed with this argument, noting that the Commissioner(Appeals) had not imposed any penalty on the Respondents, rendering the revenue involved in the Appeals as nil. Consequently, the Appeals were deemed not maintainable before the Tribunal.

2. Validity of the Penalty Imposed under Section 112(a) and (b) of the Customs Act, 1962:
The Adjudicating authority had imposed penalties of Rs.15.00 Lakhs on Shri Ashok Kr. Jalan and Rs.7.5 Lakhs on Shri Amit Jalan under Section 112(a) and (b) of the Customs Act, 1962. However, the Ld.Commissioner(Appeals) dropped these penalties. The Tribunal upheld the decision of the Commissioner(Appeals), finding no corroborative evidence to support the statements made by the Respondents to the DRI officers, which were later retracted. The Tribunal emphasized that penalties could not be imposed solely based on uncorroborated statements.

3. Admissibility and Corroboration of Statements Made to DRI Officers:
The Revenue's argument relied heavily on the voluntary statements made by the Respondents on 10.06.2019 and 11.06.2019, which were retracted on 12.06.2019. The Tribunal noted that these statements were not corroborated by any other evidence. The Tribunal referenced several case laws, including Surjeet Singh Chhabra Vs. UOI and Naresh J. Sukhawani Vs. UOI, to underline that statements recorded under Section 108 of the Customs Act could be considered substantive evidence only if corroborated by additional evidence. In the absence of such corroboration, the Tribunal found the statements insufficient to impose penalties.

4. Violation of Principles of Natural Justice:
The Respondents argued that they were not granted cross-examination, which is a violation of the principles of natural justice. The Tribunal agreed, noting that no cross-examination of any witness had been granted to the Respondents. This lack of cross-examination further weakened the case against the Respondents, as it denied them the opportunity to challenge the evidence presented by the DRI.

Conclusion:
The Tribunal dismissed the Appeals filed by the Revenue, holding that the Ld.Commissioner(Appeals) had rightly dropped the penalty against the Respondents due to the lack of corroborative evidence and the violation of principles of natural justice. The Tribunal emphasized that statements made to DRI officers, which were retracted and uncorroborated by additional evidence, could not form the sole basis for imposing penalties.