2013 (11) TMI 791 - AT - Customs

Commissioner (Appeals) overturns order for lack of panch-witnesses, stressing procedural fairness in customs.

The Commissioner (Appeals) set aside the impugned order due to the Department's failure to produce panch-witnesses, resulting in injustice to the ... Confiscation u/s 113 - Attempt of illegal export of 15 silver bars weighing 10.235 Kgs. - Commissioner (Appeals) set aside the order of confiscation - Held that:- It is amply clear that the seizing authority has failed to substantiate the legality of the seizure inasmuch as that they failed to produce the Panch Witness as per direction of Hon’ble CESTAT. Without the panch witness the veracity of the seizure and the place of seizure cannot be fully established. Since the department is not able to substantiate the legality of its action the order of confiscation and imposition of fine and penalty are not sustainable in the eyes of law. Therefore, the failure of the department to produce the panch witness invariably strengthens the case of the appellant and the benefit of doubt is in their favour - Decided against Revenue. Issues:1. Failure to produce panch-witnesses for cross-examination.2. Dispute regarding the place of seizure.3. Confiscation of impugned goods and imposition of penalties.Issue 1: Failure to produce panch-witnesses for cross-examinationIn this case, the Customs Officers intercepted an individual attempting to illegally export silver bars. The respondents filed appeals after their goods were confiscated and penalties imposed. The Tribunal remanded the matter for fresh adjudication, directing the Department to allow cross-examination of panch-witnesses. However, the panch-witnesses were not produced in the subsequent proceedings. The Revenue argued that the non-production of panch-witnesses should not vitiate the entire proceeding, emphasizing the importance of other circumstantial evidence. The Tribunal noted that the failure to produce panch-witnesses was crucial, as directed earlier, to establish the legality of the seizure. The Commissioner (Appeals) set aside the impugned order due to the Department's failure to produce panch-witnesses, resulting in injustice to the appellants.Issue 2: Dispute regarding the place of seizureThe initial round of litigation highlighted a dispute over the actual place of seizure of the impugned goods. The Tribunal had directed the Department to produce panch-witnesses for cross-examination to clarify this issue. The Revenue accepted this directive but failed to comply, leading the Commissioner (Appeals) to observe that the non-production of panch-witnesses resulted in injustice to the appellants. The failure to substantiate the legality of the seizure by not producing panch-witnesses led to the setting aside of the impugned order in favor of the appellants.Issue 3: Confiscation of impugned goods and imposition of penaltiesAfter the matter was remanded for fresh adjudication, the Department confirmed the charges against the respondents based on circumstantial evidence. However, the Commissioner (Appeals) overturned this decision, citing the Department's failure to produce panch-witnesses as directed. The Tribunal agreed with the Commissioner's observation that the Department's inability to produce panch-witnesses strengthened the appellants' case. Consequently, the appeals filed by the Revenue were dismissed, upholding the decision to set aside the lower adjudicating authority's order in favor of the appellants.In conclusion, the judgment emphasized the importance of following procedural directives, such as producing panch-witnesses for cross-examination, to ensure the legality and fairness of customs proceedings. The failure to adhere to such directives can result in the reversal of decisions and benefit the party adversely affected by non-compliance.