Customs penalty and rectification limits upheld where section 108 statements were corroborated by other evidence.

Voluntary statements recorded under section 108 of the Customs Act, 1962, when corroborated by documentary material and surrounding circumstances, may sustain personal penalty under section 112(a) where imported duty-free goods are diverted to the local market. The High Court held that the appellant's involvement in the diversion was sufficiently established and upheld the penalty. It also held that rectification cannot be used to seek rehearing, reappreciation of evidence, or review of a concluded appellate order, so the tribunal correctly rejected the rectification application. No substantial question of law arose for interference, and the appeal failed.

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Issues: (i) Whether the personal penalty under section 112(a) of the Customs Act, 1962 was sustainable against the appellant on the basis of the evidence and statements recorded under section 108 of the Customs Act, 1962. (ii) Whether the Customs, Excise & Service Tax Appellate Tribunal was justified in rejecting the rectification application on the ground that the appellant was seeking review of the earlier order.

Issue (i): Whether the personal penalty under section 112(a) of the Customs Act, 1962 was sustainable against the appellant on the basis of the evidence and statements recorded under section 108 of the Customs Act, 1962.

Analysis: The record showed that the goods were imported duty free under an exemption notification subject to continuing conditions, but were found to have been diverted to the local market. The adjudicating authority and the appellate tribunal concurrently relied upon the statements recorded under section 108 of the Customs Act, 1962, together with the documentary material and surrounding circumstances, to hold that the appellant, though described as a non-executive chairman, was aware of and involved in the affairs leading to diversion. The statements were treated as admissible evidence and were found to be corroborated by other materials. In these circumstances, the ingredients for penalty under section 112(a) were held to be made out.

Conclusion: The penalty on the appellant under section 112(a) of the Customs Act, 1962 was upheld and the challenge failed.

Issue (ii): Whether the Customs, Excise & Service Tax Appellate Tribunal was justified in rejecting the rectification application on the ground that the appellant was seeking review of the earlier order.

Analysis: The rectification application sought reconsideration of the factual matrix and a fresh appraisal of the evidence already considered in the appellate order. Such exercise was held to be beyond the limited scope of rectification, since a mistake apparent from the record cannot be converted into a rehearing on merits or a review of the earlier decision. The tribunal was therefore held to have correctly declined interference in rectification jurisdiction.

Conclusion: The rejection of the rectification application was upheld.

Final Conclusion: No substantial question of law arose for interference, and the appeal failed on both the penalty challenge and the challenge to the rectification order.

Ratio Decidendi: Voluntary statements recorded under section 108 of the Customs Act, 1962 are admissible and may sustain penalty proceedings when corroborated by other evidence, and rectification cannot be used to reappreciate evidence or reopen a concluded decision.

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