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TMI Blog2024 (5) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... ssages retrieved during investigation can be considered as admissible evidence in view of the provisions u/s 138(c) of the Customs Act, 1962 read with Section 65(B) of the Evidence Act, 1872. Whether the confession statement of first appellant u/s 108 of the Customs Act, 1962 which stood retracted is substantially corroborated by other independent and cogent evidences to sustain the allegation against first appellant. Whether the findings of the adjudicating authority regarding role of second appellant in illegal import is sustainable considering the fact that during investigation, in spite of appearing before the investigating officer, no statement is recorded from the second appellant u/s 108 of the Customs Ac, 1962. ORDER [Per : Ms. Sulekha Beevi. C.S] - HELD THAT:- Undisputedly, the WhatsApp messages have not been retrieved by complying the provisions of Section 138C of the Customs Act, 1962. The Tribunal in the case of Commissioner of Customs, Lucknow Vs Sanjay Soni [ 2022 (3) TMI 367 - CESTAT ALLAHABAD] had occasion to consider the admissibility of evidence in the nature of WhatsApp messages. It was held that messages retrieved from phone is not reliable or admissible in evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roborative evidence, the statement which has been retracted cannot be the sole basis to sustain the penalties against either of the appellants. It has to be noted that in spite of appearing before the investigating officer no statement was recorded from him. The statement of the co-noticees having been retracted and cross examination of all other witnesses been denied, there is absolutely no evidence to uphold the confirmation of penalty on second appellant. Thus, I agree with all the four points of difference as recorded by Member (Judicial). Per R. BHAGYA DEVI : - Penalties imposed on Shri Dharaneesh Raju Shetty and Shri Shail Moiz Zafar is upheld. Accordingly, the impugned order is upheld and the appeals are dismissed. Per: P. A. AUGUSTIAN - No presumption can be drawn that evidences brought on record by way of confession which stood retracted is substantially corroborated by other independent and cogent evidences. Thus, appeals are allowed. Penalty imposed on appellants are set aside. MAJORITY ORDER - In view of the majority opinion, the penalties imposed on the appellants are set aside. Consequently, the impugned order is set aside and the appeals are allowed. - HON BLE MR. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ports Imports versus Commissioner of Customs, Cochin: 2012 (276) E.T. 505 (Ker.) Kuber India versus Commissioner of Customs, Jaipur-I: 2016 (340) E.LT. 404 (Tri. Del.) Kuldeep Kaur versus commissioner of Customs., (ICD, TKD), New Delhi: 2018 (363) B.L.T. 334 (Tri. - Del.) Syndicate Shipping Services Pvt. Ltd. vs. Commissioner or Customs:2003 (154) E.L.T. 756 (Tri. - Chennai) M. Shashikant Co. v. Union of India: [1987 (30) E.L.T 868(Dom.)] Commissioner of Customs (UP) v. P.D. Manjrekar: 2009 (244) E.L.T SI (Bom.) Harbhajan Kaur v. Collector of Customs: 1991 (36) E.L.T 273 Tri Del. Nazir-ul-Rehman vs. Commissioner of Customs, Mumbai: 2004 (174) E.L.T. 493 (Tri.-Mumbai) Vivek Joshi vs. Commissioner of Customs (Imports), Nhava Sheva, Mumbai: 2004 (178) E.L.T.526 (Tri.-Mumbai) Jeevaraj vs. Collector of Customs and Central Excise, Bangalore: 1985 (22) E.L.T 44 (Kar.) Jay Kay Exports Industries vs. C.C. (Port), Kolkata: 2004 (163) E.L.T. 359 Commissioner of Customs (Sea), Chennai-I versus M.R. Associates: 2013 (297) E.L.T. 504 (Mad.) Amrit Foods versus Commissioner of Central Excise, U.P.: 2005 (190) E.L.T. 433 (S.C.) Hindustan Steel Ltd. vs. State of Orissa reported in [1978 (2) ELT (J15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rney holder for his company and he was authorised to file documents for clearance of import and export cargo for their clients at Mumbai Customs. He was fluent in English and interacted with the client and the Customs officers in English. It is also stated that all G cardholders were required to possess adequate knowledge of English since they were to be aware of the Customs Act, Rules and procedures which were in English and one had to necessarily pass the exams conducted by the customs authorities to obtain a G cardholder and the exams are necessarily in English or Hindi. From the investigations, it is clear that the necessary documents for clearance of these mis-declared goods were shared by Shri Dharaneesh Raju Shetty. It is also noticed that transportation of the said goods from Mangalore to Mumbai was being arranged through M/s. Southern Travels. In view of the above, it is admittedly clear that Shri Dharaneesh Raju Shetty had in fact assisted in helping Shri Krishna Naik and Shri Dinesh Gowda in importing goods of much higher value by mis-declaring them and evading customs duty to the extent of Rs.16.20 crores and therefore, they are liable to penalty under the various Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to settle some previous payments and organise import of subsequent consignments. The call data records between Shri Sahil Moiz Zafar and his Chinese counterparts clearly show that he was in constant touch with the Chinese supplier along with Shri Dharaneesh Raju Shetty. The call records detailed in the show-cause notice for the period between June 2017 to December 2017 at para 1.16.1 clearly established the link between Shri Dharaneesh Raju Shetty and Shri Sahil Moiz Zafar with the supplier from China Shri Membo. The detail call records of Shri Sahil Moiz Zafar with different numbers which linked to the supplier in China as listed out in the show-cause notice at para 1.16.2. also proves his involvement. 7. Shri Ajay, Air Cargo Operation, Manager Etihad Airways in his statement dated 15.2.2018 admitted that the Airway Bill with mobile number of Shri Sahil Moiz Zafar was mentioned, which has been corroborated by Mr. Kiran Kumar, Cargo Handling Officer of Etihad Airways in his statement. In view of the above evidences, the appellant is liable for penalty under Section 112(b) of the Customs Act, 1962. None of the detail call records shown in the show-cause notice has been disputed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, it is on the basis of such revelation, further evidence has been collected like in the present case on the basis of the statement of the co-accused when search has been made and the contraband articles (watches and money) have been recovered from the other co-accused would in fact be a evidence against them. Further, there is no explanation with regard to this aspect in further statements under Section 313 of the Criminal Procedure Code. Therefore, cumulative effect of the entire evidence has to be considered and particularly when there is no explanation coming forth from the accused or the concerned accused with regard to the incriminating evidence against him. Therefore, it cannot be said that the impugned judgment and order recording conviction, which has been confirmed, is perverse or resulted into miscarriage of justice. It is also well settled that the provisions of Section 313 of the Criminal Procedure Code is specific for the purpose of pointing out circumstances with regard to the relevant evidence or incriminating evidence against him, which can be considered and opportunity is offered to give explanation or rebuttal even by preponderance of the probability. 9. The Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n offence during the inquiry under Section 108 of the Act or during confiscation proceedings is not a person accused of the offence within the meaning of Section 24 of the Evidence Act. (4) Though the Customs Officer is an authority within the meaning of Section 24 of the Evidence Act, by reason of statutory compulsion of recording the statement or the accused giving voluntary statement pursuant to his appearing either after issuance of summons or after the appellant s surrender, such statement cannot be characterised to have been obtained by threat, inducement or promise. (5) The collection of evidence under Section 108 and other relevant provisions relating to search and seizure are only for the purpose of taking further steps for confiscation of contraband and imposition of penalty. (6) The self-same evidence is admissible in evidence on the complaint laid by the Customs Officer for prosecution under Section 135 or other relevant statutes. 11. In view of the above decisions, all the statements recorded by the Customs Officers and corroborated by other employees and staff and other accomplices cannot be brushed aside only for the reason that cross-examination was not given. Moreo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Krishna Naik for clearance of the imported goods. It is further alleged that the First appellant had procured dummy IE code for facilitating import. The learned counsel for the Appellant draws our attention to the finding given by Adjudication Authority regarding role of the Appellant in the impugned order and submits that in spite of giving request, no opportunity for cross-examination extended and the impugned order is in violation of principal of natural justice. The Learned Counsel for the Appellant further submits that though an allegation was made that the Appellant had used the IE code of Shri. Nissar @ Nazir, during investigation, no summons was issued to him and there is no corroborative evidence to allege that the First Appellant had mis used the IE code of Shri. Nissar @ Nazir or any other person. 15. Regarding Second Appellant, he had appeared before the investigating officer on 05.01.2018 and no statement was recorded from him. His arrest was recorded on 14.03.2018 and subsequently released on bail. Thereafter, Adjudication Authority imposed penalty on him. Learned Counsel for the Appellant draws our attention to the findings of the Adjudicating Authority and submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded from the first appellant, learned counsel draws our attention to the Exhibit C medical Certificate issued by Hiranandani Hospital and submits that appellant appeared before the officers of DRI on 01.01.2018 and the statement came to be recorded on 03.01.2018 which is after more than 24 hours in DRI custody. On this ground alone the statement is illegal and bad in law. It is further submitted that the statement of the appellant was typed by the officers of DRI Bangalore and only the signature of the appellant was taken, which can be seen from the said statement. The appellant was physically beaten on his legs with sticks and mentally tortured due to which the appellant had to undergo knee surgery. That being so, the statement cannot be relied upon as evidence. Further submits that even while in judicial custody, First appellant had retracted the statement and as per the law laid down by Apex court, once statement is retracted, it can be considered as admissible evidence only if corroborated by other independent and cogent evidences. The Learned Counsel for the Appellant also draws our attention to the decision of the Apex court in the matter of M/s. Vinod Solanki Vs Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in the matter of M/s. Andaman Timber Industries Vs Commissioner of C. Excise, Kolkata-II reported in 2017 (50) STR 93(SC) wherein it was held that: 6. According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the proceedings, which shall give the assessee a chance to make his submissions in this behalf. It goes without saying that the authority would record reasons, based upon the said material, for such a decision effectively. Therefore, the elements of giving opportunity and recording of reasons are inherent in the exercise of powers. The aggrieved party is not remediless. This order/opinion formed by the quasi-judicial authority is subject to judicial review by the appellate authority. The aggrieved party can always challenge that in a particular case invocation of such a provision was not warranted. 21. Regarding allegation of lending the IE Code to third person, learned Counsel for the Appellants submitted that even if it is assumed for arguendo that the Appellant s used the IE code of the importer as alleged, goods are not prohibited or restricted. The issue was considered by Hon ble High Court of Kerala in the matter of M/s. Carmel Exporters: 2012 (276) E.L.T 505 (Ker) held that: 15. Coming to the submission that the appellant is only a name lender for the import of goods by one Anwar, we shall presume for the time being that the appellant is only a name lender, but the actua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Counsel for the Appellant also draws our attention to the finding of the Hon ble Hight Court of Bombay in the matter of CC (EP) vs. P.D Manjrekar: 2009 (244) E.L.T 51 (Bom.) wherein it is held that once charge against the accused on abetment, it was on the part of the Department to prove the knowledge on the part of the accused herein regarding alleged omission. The Learned Counsel for the Appellant also draws our attention to the finding of the Tribunal, New Delhi in the matter of Harbhajan Kaur vs. Collector of Customs: 1991 (56) E.L.T 273 (Tri.) wherein it is held that: 23. Be that as it may, there is a reference to the appellant s husband and some other persons said to be known to her but there is no specific charge of abetment or conspiracy as such; And yet the Additional Collector has recorded a finding of conspiracy . ------- -------- ------ 3. In this context it is necessary to remember that mere presence at the time of commission of a crime cannot amount to intentional aid unless it was intended to have that effect . Similarly A mere giving of an aid will not make the act an abetment of an offence, if the person who gives the aid did not know that an offence was being co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raders 1,85,920/- 3,34,36,726/- 77,80,771/- 2. 4549963 dt. 26.12.2017 M/s Maxco Traders 11,99,682/- 18,79,40,880/- 7,86,07,736/- 3. 4569857 dt. 27.12.2017 M/s Samarth Enterprises 84,574/- 2,52,97,946/- 87,34,968/- 4. No Bill of Entry filed M/s Noble Enterprises N.A 16,51,98,000/- 6,68,88,608/- 25. Learned Authorised Representative reiterated the findings in the impugned order and submits that Appellants herein are the keypersons in abetting illegal import of goods through various ports and was involved in similar offences in other ports. Hence evidence available on record is sufficient to impose penalties on appellants under Section 112(a), 112(b) and 114AA of the Customs Act, 1962 as held by adjudication authority. 26. Heard both sides. I have gone through the submissions. As per the impugned order, findings were made against both the Appellants based on the statement recorded from the first appellant on 03.01.2018, on the statements recorded from co-noticees and evidences recovered from WhatsApp messages of the co-noticees. As regards request for cross-examination, it is noticed that to deny the request of cross examination, adjudication authority categorically held that is not j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating or aiding the doing of a thing is required before a person can be said to be abetting the commission of offence. It is an admitted fact that no attempt was made by the investigating officer to issue summons to the IE code holder to substantiate the allegation regarding dummy importer. Even if it is proved that the documents were forwarded from the mobile of the First Appellant, no presumption can be drawn that the IE code holder is only a dummy importer and appellants are the persons behind such import. 29. Regarding the Second Appellant, he had appeared before the investigating officer on 05.01.2018 and no statement was recorded from him. In the absence of any statement recorded from Second Appellant or any specific question regarding his involvement in alleged illegal activities, only based on the statement of First Appellant which was retracted later, no presumption can be drawn that Second Appellant had abetted illegal import. On this ground also, the impugned order suffers from uncurable error and hence, is liable to be set aside. 30. Regarding undervaluation, Customs Act provides for the levy and collection of duty of customs and the power vested on the Customs Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of offending goods but also to protect revenue interest by timely disposal of the goods. In present case, there is no claimant for such goods and reasonable period after extending opportunity for provisional release of the goods, it should have been disposed. It is not expected for an offender to abandon the goods having market value of Rs. 60 crore if it can be released on payment of around Rs.10 cores as duty, fine and penalty as per the impugned order since there is no other illegality alleged than undervaluation. 31. Thus, no presumption can be drawn that evidences brought on record by way of confession which stood retracted is substantially corroborated by other independent and cogent evidences. Considering the above, appeals are allowed. Penalty imposed on appellants are set aside. (Order pronounced in open court on 10.01.2024.) DIFFERENCE OF OPINION On going through the order signed by the learned Member (Technical), it is seen that following differences of opinion emerge:- (i) Whether the evidence relied by the adjudicating authority regarding the WhatsApp messages retrieved during investigation can be considered as admissible evidence in view of the provisions under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E are detailed in Annexure I, II, III and IV of SCN. The department has rejected the transaction value on the ground of misdeclaration of goods and has enhanced the value. It is alleged that on examination, all goods were branded readymade garments, footwear etc. 3.1. It also needs to be stated that while considering the evidence put forward by department, the enhancement of value of the imported goods is glaringly dubious. The appellants have declared the goods as readymade garments and sun glasses . The allegation in the show cause notice is that they had imported branded goods in the guise of unbranded goods. On perusal of the entire impugned order, it is not seen as to what is the brand of these goods imported by the appellants. Mere mention in Annexure to SCN if any is not sufficient. The adjudicating authority should render a finding as to the nature of goods being branded. So also, there should be discussion of value of each type of goods and the basis for enhancement. The value declared in the Bill of Entry of Annexure-I is Rs.1,85,920/- and the department has enhanced the same by redetermining under Rule 12 of Customs Valuation (Determination of value of Imported Goods) Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) ELT 509 (Tri.-All.) had occasion to consider the admissibility of evidence in the nature of WhatsApp messages. It was held that messages retrieved from phone is not reliable or admissible in evidence if provisions of Section 138C of Customs Act, 1962 are not complied. Section 138C is pari materia to Section 36B of Central Excise Act, 1944. While analysing the issue of admissibility of evidence retrieved from electronic items, the Hon ble Supreme Court in the case of Anwar PV Vs P.K. Basheer Others - (2014) 10 SCC had held that the compliance of conditions in Section 138C is mandatory. Similar view was taken in the case of S.N. Agrotech Vs Commissioner of Customs, New Delhi 2018 (361) ELT 761 (Tri.). In a recent decision, the Mumbai Bench of the Tribunal in the case of M/s.Jeen Bhavani International Vs CC, Nhava Seva, vide F.O. No.A/85674-85675/2022 dt. 1.8.2022 had occasion to analyse similar issue and held that without complying with conditions of Section 138C of Customs Act, 1962, the contents retrieved from electronic items are not admissible in evidence. The evidence in the nature WhatsApp retrieved from phones cannot be considered in evidence without complying the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the nature of WhatsApp messages, call records cannot be relied in evidence unless the conditions under Section 138C of Customs Act, 1962 are followed. So also, the denial of cross examination has taken away the right from the appellant to establish their defence. Therefore, there is no independent corroborative evidence. In absence of independent corroborative evidence, the statement which has been retracted cannot be the sole basis to sustain the penalties against either of the appellants. 7. The fourth issue is regarding the role of second appellant in the import of misdeclared goods. It has to be noted that in spite of appearing before the investigating officer no statement was recorded from him. The statement of the co-noticees having been retracted and cross examination of all other witnesses been denied, there is absolutely no evidence to uphold the confirmation of penalty on second appellant. 8. From the above I agree with all the four points of difference as recorded by Member (Judicial). 9. From the foregoing, I hold that the penalties imposed on both the appellants requires to be set aside. The appeals are to be allowed as held by Member (Judicial). The reference is ans ..... X X X X Extracts X X X X X X X X Extracts X X X X
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