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TMI Blog2023 (5) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... the work of carrying smuggled gold from Basirhat to Kolkata against payment of Rs.1000/- for carrying 10 Pcs. Of Gold Biscuits per trip . Since he was coming to Kolkata every week in connection with his own business, he agreed and started carrying smuggled gold from middle of March 2017 and intimated the same to Gobinda Babu in his Mobile No. 8276875110. Shri Dey did not know the proper home address or office address of Gobinda Babu but he knew that Gobinda Babu had an Office in Sonapatti at Burrabazar and his home was at Barasat. Regarding the 120 pcs of gold seized, he stated that he was to handover the said gold to one Sri Ratan Kumar Saha who was introduced to him by Shri.Gobinda Babu . Shri Dey was carrying the gold biscuit at the instruction of Gobinda Babu to deliver the same to Shri Ratan Kumar Saha, whose Mobile Number was 9073804239. 2. On 03.04.2017, Shri Dey was arrested . On 07.04.2017, his house was searched but nothing incriminating was found. The search of his shop premises also did not yield anything incriminating. On 14.07.2017, he had given statement again but he did not say anything about the Appellant. 3. Further, investigation was made in respect of Shri Rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered the work of carrying smuggled gold to Shri Bishnupada Dey. The alleged admission of Shri Bishnupada Dey is of no consequence in this case in the absence of any corroborative evidence. The non-appearance of the Appellant in response to summons cannot be a ground for alleging commission of any offence, more-particularly when the summons were responded and reply given. There is no scope for inferring that the Appellant was actively involved in smuggling of gold at any point of time. Therefore, the finding in the Order-in-Original against the Appellant in Paras 38.25.1 to 38.25.6 and para 38.29 are erroneous and without any evidence. Since the findings are based only on the statement of the co-accused, without any independent, corroborative evidence, the Order passed by the Adjudicating Authority imposing penalty on the Appellant solely on the basis of the statement of the co-accused cannot be sustainable in law. 6. In support of their claim, the appellant relied upon the following decisions: i) Mohtesham Mohd. Ismail Vs. Special Director, Enforcement Directorate- 2007(220) ELT 3 (SC) . That a confession of a co-accused person cannot be treated as substantive evidence and can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty under Section 112(b) of the Customs Act, 1962 in the absence of any other corroborative evidence. 7. The Appellant further submits that the statement of the co-accused in this case cannot be considered as relevant in view of non-compliance of the mandate under Section 138B of the Customs Act, 1962 by the Adjudicating Authority which is pari materia with Section 9D of the Central Excise Act, 1944. In the case of Flemingo DFS Pvt. Ltd., Vs. Commissioner of Customs, Visakhapatnam reported in 2018 (363) ELT 450 (Tri-Hyderabad), it has been held that if Revenue chooses not to examine any person in the adjudication proceedings, it amounts to giving up that witness and such statement cannot be considered relevant. Since the co-accused person whose statement has been relied upon in this case was not examined in adjudication proceedings, his statement could not have been considered relevant against the Appellant. Reliance was placed in the case of Haricharan Kurmi reported in AIR 1964 SC 1184, wherein it was held that even otherwise the statement of co-accused can only be considered for corroboration of any tangible evidence and in the instant case, there is no tangible evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om a third party to the effect that Gold Pellets under seizure were eventually intended to deliver to the Appellant. In the case of Sourav Goyal reported in 2020 (373) ELT 676 (Tri.-Del.), it was held by the Tribunal that the statement of the co-noticees unless corroborated by any independent evidence do not constitute the legal evidence and there is no justification for imposition of penalty on the Appellant. 12. In the present case, the Appellant submits that only on the basis of the statement of the co-accused inference has been made about his involvement in the smuggling and penalty was imposed. The appellant relied on the decision in the case of Surinder Kumar Khanna- Vs. Intelligence Officer, DRI- 2018 (362) ELT 935 (SC) on the facts identical with the facts of the Appellant's case wherein the Hon'ble Apex Court has held as under: Para-14 - "In the present case it is accepted that apart from the aforesaid statements of co-accused there is no material suggesting involvement of the appellant in the crime in question. We are thus left with only one piece of material that is the confessional statements of the co-accused as stated above. On the touchstone of law laid down by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat sufficient materials are available to corroborate the same". I also rely on the order of the Hon'ble High Court at Allahabad in the case of Praveen Dumar Saraogi Vs. Vs. Union of India, Application No. 1471 of 1998, decided on 09.05.2013, reported in 2014 (299) ELT 151 (All.) wherein interalia it is stated that "Statement of co-accused recorded under Section 108 of the Customs Act, 1962 can be used against accused of a case When there is admission on part of co-accused, the same can be read against co-accused-complaint not liable to be quashed Section 135 of Customs Act, 1962, "Further reliance is placed on the order of the Hon'ble Supreme Court of India in the case of Naresh J. Sukhawani Vs. Union of India, SLP [C] No. 23708 of 1995, decided on 06.11.1995 wherein, inter-alia, it is stated that "Statement of co-accused whether usable without other corroborative evidence- Attempt to export foreign exchange out of India- Carrier naming Shri Subhash Dudani who had given such foreign exchange to him for delivery at Hong Kong- Statement of Shri Dudani under Section 108 of the Customs Act, 1962 named Shri Sukhawani who had given the foreign exchange to him-Statement of co-accus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and actively colluded in such activities. I find Shri Gobinda Das @ Gobindababu has knowingly, consciously and actively involved himself in smuggling of gold of foreign origin which he knew or had reasons to believe were liable to confiscation under Section 111 (b) and Section 111 (d) of the Customs At, 1962, Shri Gobinda Das @ Gobindababu is thus liable to penalty under Section 112 (b) of the Customs Act, 1962. Held so. ...." 17. From the above findings, we observe that Bishnupada Dey, the co-accused in this case only implicated the Appellant. There is no evidence available on record to establish that the Appellant has asked Bishnupada Dey to carry the gold. The connection between the Appellant and Bishnupada Dey was a phone number. Mr. Dey was told to call the Appellant in the phone number 8276875110. On verification, the phone number was found to be registered in the name of Soumyadeep Talapatra. So, on the basis of these evidences alone it cannot be concluded that Mr. Dey was carrying the gold for the Appellant. 18. Next evidence relied upon by Revenue is that in another case 140 pieces of gold was seized from G.D.Gold House in Burrabazar, whose proprietor was one Mr.Gobinda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Abdul Majeed Vs. Commissioner of Customs, Cochin reported in 2014 (309) ELT 671 (Ker.). The facts of the case in the said decision, is also different since there were other evidences of 17 persons as mentioned in Paragraphs 2, 9 & 14 of the said order. Several persons have spoken about the involvement of the petitioner in the smuggling activity. The said judgment also mentioned that confessional statement of co-accused can be treated as evidence provided sufficient materials are available to corroborate the same. In the case of the appellant there is only one statement and no other corroborative evidence. The said judgment has no relevance in the facts and circumstances of the Appellant's case. 19.4. The fourth decision relied upon by the Revenue is K.I. Pavunny Vs. Assistant Collector, Headquarter, Central Excise Collectrate, Cochin reported in 1997 (9) ELT 241 (S.C.). This decision is in respect of the confession of the accused himself and not by co-accused. The said decision also repeatedly speaks about the requirement of corroborative evidence by holding that the Rule of Practice & Prudence requires that confession should be corroborated by independent evidence. In the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances, (i) A statement made and signed by a person before any Central Excise Officer of a gazette rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains.- (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the court considers unreasonable: or (b) when the person who made the statement is examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this act, other a proceeding before a court, as they apply in relation t a proceeding before a court. 24. The Appellant relied upon the decision of the Hon'ble Punjab and Haryana High Court in the case of G-Tech I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1944 to admit statement can be challenged in appeal and writ proceedings - Hence, to invoke Section 9D(1)(a) ibid, adjudicating authority has to pass reasoned and speaking order, which is amenable to challenge by assessee. [para 12] Evidence - Statement before Central Excise Officer - Reliance without invoking Section 9D(1) of Central Excise Act, 1944 to find that attendance of makers of statements could not be obtained for any of reasons contemplated therein - It is violation of mandatory requirement of section which vitiated adjudication order - On facts, directions given that if Revenue intended to rely on statement, they would apply to adjudicating officer to summon him, have his examination-in-chief and give copy thereof to assessee to cross-examine them. [paras 22, 23, 24] Evidence - Statement before Central Excise Officer - Procedure prescribed in Section 9D(1)(b) of Central Excise Act, 1944 - Use of 'shall' indicates that it is mandatory to follow it - Rationale for this is that statement before Gazetted Central Excise officer has every chance of having been recorded under coercion or compulsion. [paras 14, 15] Evidence - Statements - Recorded behind back of assesse ..... 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