2017 (8) TMI 1150 - AT - Customs

Tribunal overturns penalty for Customs violation due to lack of evidence

M/s. Continental Warehousing Corporation Nhyava Seva Ltd. Versus CC, Tuticorin

The Tribunal set aside a penalty of &8377;25,000 imposed on a Customs Cargo Service provider under Regulations 12(8) of HCCAR, 2009 for concealing ... Penalty on Customs Cargo Service provider and a custodian - Regulations 12 (8) of HCCAR, 2009 - Held that: - the main reliance by the adjudicating authority, for imposition of penalty is the statement of the driver - the statement of the driver of the trailer, which admittedly was not the trailer intercepted by the officer, is the basis for holding against them. It is well settled law that a statement of the co-accused cannot be made the sole basis for penalizing the assessee without there being and independent corroboration from the independent source. The veracity of the said statement has also not been tested by providing x-examination of the deponent - The appellants have also contended that no outsourcing done without the permission of the Commissioner - there is no justifiable reason to impose penalty upon the appellant - appeal allowed - decided in favor of appellant. Issues: Imposition of penalty under HCCAR, 2009 based on driver's statement.Analysis:1. The appellant, a Customs Cargo Service provider and custodian, was penalized &8377; 25,000 under Regulations 12(8) of HCCAR, 2009 for an incident where a container was found to be concealed with prohibited items during export.2. The driver's statement revealed a modus operandi involving substitution of goods en route, but the appellant's Dy. General Manager denied such actions and emphasized compliance with regulations.3. The penalty was imposed based on the driver's statement without independent corroboration or cross-examination, raising concerns about the reliability and admissibility of the evidence.4. The Tribunal highlighted the legal principle that a co-accused's statement alone cannot be the sole basis for penalizing an entity without independent verification.5. Considering the lack of substantiated evidence against the appellant and the denial of alleged wrongdoing by their representative, the Tribunal set aside the penalty, ruling in favor of the appellant.This detailed analysis covers the issues involved in the judgment, emphasizing the legal principles applied and the reasoning behind the decision to overturn the penalty imposed on the appellant.