2006 (11) TMI 415 - AT - Customs

Tribunal Overturns Personal Penalties for Insufficient Evidence in Customs Case, Citing Unreliable Co-Accused Statements.

The Appellate Tribunal CESTAT, Mumbai, set aside the personal penalties imposed by the Commissioner of Customs on three individuals due to insufficient ... Imposition of penalty - act of smuggling of goods - consignment of imported goods - Trucks in question not registered in name of appellants - HELD THAT:- Assumption drawn by the adjudicating authority that since the registered owners of the trucks have not come forward either during investigation or any time thereafter, it is the appellants who is the owner because the photograph of the truck has been recovered from his premises, is nothing but an assumption drawn on the basis of conjectives and surmises. Though the said appellants has disputed the recovery of the truck photograph from his residential premises during the course of second search conducted on 24-7-95, inasmuch as the panchnama does not even show the exact place of recovery, even presuming the fact of recovery to be correct, the same does not reflect upon the appellants being owner of the said truck, especially when the same stand registered in the name of Shri Vikas Das Shri Tanvir Ahmed as per registration documents. Similarly, the deposition of sale as regards the disposal of the goods in the past by other two appellants on commission basis, does not reflect upon the fact that the said broker was aware about tented character of the goods. The Tribunal in the case of Orient Enterprises v. Collector of Customs [1985 (8) TMI 174 - CEGAT, NEW DELHI] has held that exculpatory statement of co-accused or co-conspirator is always tainted with falsehood because he twists the story or colours the version in a way so as to show himself innocent and paints his companion as the perpetrator of the crime. The statement of such a person loses its evidentionary value and is unworthy of credence against the co-accused. The said decision was subsequently upheld by the Hon’ble Supreme Court [1996 (12) TMI 389 - SC ORDER]. Thus, We set aside the penalties imposed upon the three appellants and allow their appeals with consequential relief to them. Issues:Imposition of personal penalty by the Commissioner of Customs on three individuals based on statements of co-accused; Denial of involvement in smuggling by the appellants; Lack of sufficient material evidence to support penalties; Interpretation of co-accused statements as weak evidence.Detailed Analysis:1. Imposition of Personal Penalty: The judgment revolves around the imposition of personal penalties by the Commissioner of Customs on three individuals, namely Shri Prasanta Sarkar, Shri M.G. Gupta, and Shri Atul U. Shah. The penalties were based on the statements provided by a co-accused, Shri R.K. Cibal. The penalties were Rs. 50 lakhs on Shri Sarkar, Rs. 50,000 on Shri Gupta, and Rs. 20,000 on Shri Shah. The penalties were challenged on the grounds of lack of substantial evidence to support the accusations.2. Denial of Involvement in Smuggling: The appellants consistently denied any involvement in the smuggling of goods, their transportation, or their disposal in the market with knowledge of their smuggled nature. They argued that they were not aware of the illicit nature of the goods and claimed innocence regarding the activities attributed to them based on the statements of the co-accused, Shri Cibal.3. Lack of Sufficient Material Evidence: The appellate tribunal found that there was a lack of sufficient material evidence on record to justify the imposition of penalties on the appellants. The tribunal emphasized that uncorroborated statements of co-accused cannot be the sole basis for penalizing the accused individuals. Notably, there were no recoveries of contraband goods from the appellants, further weakening the case against them.4. Interpretation of Co-Accused Statements: The tribunal highlighted the principle that statements of co-accused individuals are considered weak evidence and are often tainted with falsehood. The tribunal referred to a previous decision where it was established that such statements lack evidentiary value and are unreliable when used against the co-accused. This interpretation played a crucial role in the tribunal's decision to set aside the penalties imposed on the appellants.In conclusion, the judgment by the Appellate Tribunal CESTAT, Mumbai, emphasized the importance of substantial evidence in imposing penalties on individuals accused of smuggling activities. The tribunal ruled in favor of the appellants, setting aside the penalties based on the lack of concrete evidence and the unreliable nature of the statements provided by the co-accused.