2024 (2) TMI 312 - AT - Customs

Levy of penalty u/s 114 of the Customs Act, 1962 on the owners of the seized goods - Allegation that, pulses (URAD ki Dal) in question were meant for illegal export from India to Nepal - requirement to cross-examination of the witnesses - violation of principles of natural justice - genuineness of the Punchnama - panch witnesses are stated to be daily wage laborers' - HELD THAT - It is found that the Tribunal, while remanding, has referred to a number of decisions in Para-7 of the order by which it has been held that cross-examination in such a situation needs to be allowed. The impugned order which has been passed contrary to the directions recorded in the order remanding the matter for de novo consideration without any valid justification cannot be sustained. Further, as the prayer made in the appeal is only to the extent of setting aside the penalty of Rs. 14,00,000/- imposed under Section 114 of the Customs Act, 1962 on the present appellant, the same is set aside. Accordingly, as far as the present appellant is concerned, there are no merits in the impugned order and the same is set aside - the appeal of the appellant is allowed to the extent of prayer made in the appeal.

Summary

Issues Involved:
1. Confiscation of goods and vehicles.
2. Imposition of penalties.
3. Denial of cross-examination of witnesses.
4. Compliance with principles of natural justice.

Summary:

Confiscation of Goods and Vehicles:
The Commissioner ordered the confiscation of 40,000 Kg. of Urad Ki Dal valued at Rs. 14,20,000 under Section 113(b) & (d) of the Customs Act, 1962, and appropriated the cash security of Rs. 3,55,000/- to the exchequer. Additionally, two trucks bearing Registration Nos. UP-35-H-9828 and UP-78-CN-4811 were confiscated under Section 115(2) of the Customs Act, 1962, with redemption fines of Rs. 2,00,000/- each already deposited by their lawful owners.

Imposition of Penalties:
Penalties were imposed as follows:
- Rs. 14,00,000/- on Shri Kamlesh Gupta, owner of the seized Urad Ki Dal, with Rs. 5,00,000/- already appropriated from pre-deposits.
- Rs. 10,000/- on Shri Bhola Shanker Pandey, owner of one of the seized trucks, with the amount already deposited.
- No penalty was imposed on Shri Vijay Shanker Tripathi, owner of the other seized truck.

Denial of Cross-Examination of Witnesses:
The Tribunal had previously remanded the matter to the Commissioner for de novo consideration, emphasizing the need for cross-examination of witnesses. The Commissioner, however, expressed inability to allow cross-examination, citing the unavailability of daily wage laborers who were panch witnesses. The Tribunal found this unacceptable, noting that the genuineness of the Panchnama could not be established without cross-examination.

Compliance with Principles of Natural Justice:
The Tribunal highlighted that the denial of cross-examination violated principles of natural justice. It referenced several judicial precedents, including decisions from the Hon'ble Supreme Court and High Courts, which underscored the necessity of cross-examination to test the veracity of statements and documents relied upon in adjudicatory proceedings.

Conclusion:
The Tribunal set aside the impugned order due to the failure to provide cross-examination of witnesses, which was crucial for establishing the genuineness of the Panchnama. The penalty of Rs. 14,00,000/- imposed on the appellant was also set aside, and the appeal was allowed to the extent of the prayer made.