2016 (4) TMI 141 - AT - Customs

Tribunal reduces penalties, stresses evidence corroboration and impartial investigation.

The Tribunal upheld the confiscation of goods and penalties on two appellants with reduced amounts but set aside the penalty on another, emphasizing the ... Imposition of penalties under sections 114 and 114AA of the Act 1962 - Illegal procurement and export of Red Sanders, a prohibited goods through CHA - Appellants actively engaged in this illegality - Except statement no other evidence found - Held that:- the appellant booked the containers from OAC India through M/s IAL Logistics (India) Ltd, Jaipur and stuffed the material in their factory and sent to Mundra Port without sealing. Shri Digpalsinh Bhupatsinh Sodha, Proprietor of the CHA firm M/s Fortune Shipping Services, in his statement dt.11.10.2013 stated that the forwarders sent the containers from Jaipur, they usually sent their goods by trucks and alongwith them they also bring supplier's invoice attached with the lorry receipt; that the forwarders send the export details by email to him before the arrival of the goods; that one of the type of exports opted by the forwarder is when the goods is sent within the container stuffed at the factory, but without line seal, Excise seal or any other seal, this is known as “buffer containers”, as it is shown as being stuffed at CFS but the same were already stuffed at the factory of the Exporter, then the shipping bill is filed and 2nd type of exports opted by the forwarder is where the goods arrive by the trucks and the same is stuffed at the CFSs at Mundra and then export Customs documents i.e. Shipping Bill is filed. If the Appellant cleared the export materials without sealing the containers, the burden of proof heavily lies with them that the offending goods were not loaded by them. Here, the appellants failed to prove that the offending goods were not loaded by them. So, from the impugned order it is seen that Shri Mangi Lal Lohiti, Proprietor of M/s Lahoti Impex and Director of M/s Indo Sino Impex P. Ltd, in his statement dt.09.10.2013 recorded under Section 108 of Customs Act, 1962 stated that Shri Rameshwar Sharma used to come with transport on which partly filled containers were loaded and in these partly loaded containers, he himself used to get the goods stuffed in the containers with the help of crane and labour, that the crane and labour were also arranged by Shri Rameshwar Sharma; in addition the partly stuffed goods wre packed in wooden boxes with lassing and were not visible. Hence, the penal provisions would be invoked against the appellant. As the appellant had not filed any appeal against the confiscation of the said goods by the Adjudicating authority which means the appellant had not disputed the confiscation of the declared goods. Section 50 of the Act, 1962 provides entry of goods for exportation. Sub-section (2) of the Section 50 provides the exporter of any goods, while presenting the shipping bill or bill of export, shall at the foot thereof make and subscribe to a declaration as to the truth of the contents. The appellant is the exporter and filed shipping bills, which were found attempted to export the Red Sander, prohibited under the Act, 1962 and other laws, by mis-declaring the description of the goods in the shipping bills and therefore, imposition of penalty under Section 114 of the Act is justified. Also as the appellant knowingly or intentionally used the shipping bills which is false or incorrect particular therefore, separate penalty is liable to be imposed under Section 114AA of the Act, 1962. Shri Suresh Sharma, employee of the export firm had knowingly involved in smuggling of Red Sander and therefore, imposition of penalty is warranted. Penalty is reduced to an extent. - Appeal disposed of Issues Involved:1. Legality of the confiscation of goods.2. Imposition of penalties on various appellants.3. Validity and evidentiary value of retracted statements.4. Role and conduct of the investigating officers.5. Quantum of penalties imposed.Detailed Analysis:1. Legality of the Confiscation of Goods:The Directorate of Revenue Intelligence (DRI) seized 14.25 MT of Red Sanders and 93.31 MT of Marble Slabs from containers meant for export by M/s Eurro Exports. The Red Sanders were found concealed within the marble slabs. The export of Red Sanders is prohibited under the Convention of International Trade in Endangered Species of Wild Flora and Fauna (CITES) and the Import-Export Policy (2009-2014). The Adjudicating Authority confiscated the Red Sanders under Sections 113(d), 113(f), 113(i), and 113(k) of the Customs Act, 1962, and the Marble Slabs under Section 119 of the Act. The Tribunal upheld the confiscation, noting that the exporter had not disputed the confiscation of the declared goods.2. Imposition of Penalties on Various Appellants:The Adjudicating Authority initially dropped penalties on Shri Rameshwar Sharma, Shri Suresh Sharma, and Shri Anil Gadodia but imposed penalties on Shri Mayur Ranjan and Shri Yodying. The Commissioner (Appeals) later imposed penalties on Shri Rameshwar Sharma (Rs. 50 lakhs each under Sections 114 and 114AA), Shri Suresh Sharma (Rs. 2.5 lakhs each under Sections 114 and 114AA), and Shri Anil Gadodia (Rs. 50 lakhs under Section 114AA). The Tribunal upheld the penalties on Shri Rameshwar Sharma and Shri Suresh Sharma but reduced the amounts. The penalty on Shri Anil Gadodia was set aside, restoring the Adjudication order.3. Validity and Evidentiary Value of Retracted Statements:The Tribunal noted that the statements of the appellants and co-accused were retracted shortly after being made, and the retractions were not adequately addressed by the investigating officers. The Tribunal emphasized that retracted statements alone, without corroborative evidence, could not be the sole basis for penalties. The Tribunal cited the Supreme Court's decision in Vinod Solanki v. UOI, which held that retracted confessions must be examined in light of all circumstances and cannot be solely relied upon for conviction.4. Role and Conduct of the Investigating Officers:The Tribunal criticized the investigating officers for acting as adjudicating authorities by dismissing the retractions as afterthoughts without further investigation. The Tribunal highlighted that the role of investigating officers is to gather evidence impartially and not to fill gaps in the prosecution's case. The Tribunal found that the investigating officers failed to thoroughly investigate the claims of the appellants and relied heavily on retracted statements.5. Quantum of Penalties Imposed:The Tribunal considered the penalties imposed by the Commissioner (Appeals) to be excessive. It reduced the penalties on Shri Rameshwar Sharma to Rs. 40 lakhs each under Sections 114 and 114AA and on Shri Suresh Sharma to Rs. 2 lakhs each under Sections 114 and 114AA. The penalty on Shri Anil Gadodia was set aside entirely.Conclusion:The Tribunal's judgment addressed the legality of the confiscation of goods, the imposition of penalties, the validity of retracted statements, the conduct of investigating officers, and the quantum of penalties. The Tribunal upheld the confiscation of goods and penalties on Shri Rameshwar Sharma and Shri Suresh Sharma (with reduced amounts) but set aside the penalty on Shri Anil Gadodia, emphasizing the need for corroborative evidence and proper investigation.