2023 (5) TMI 672 - AT - Customs

Penalty for alleged gold smuggling quashed as uncorroborated co-accused statement, Section 138B Customs Act procedure violated

CESTAT Kolkata allowed the appeal and set aside the penalty imposed on the appellant for alleged smuggling of gold and related Indian currency. The ... Smuggling - Gold Biscuit - Indian Currency (sale price of smuggled gold) - appellant stated that demand is based on assumption and presumption and on the basis of uncorroborated statement of co-accused - reliability of statements - admissible evidence or not. HELD THAT:- The entire case of the Revenue has been built on the basis of the statement of the co-accused. Bishnupada Dey, the co-accused in this case only implicated the Appellant. There is no evidence available on record to establish that the Appellant has asked Bishnupada Dey to carry the gold. The connection between the Appellant and Bishnupada Dey was a phone number. Mr. Dey was told to call the Appellant in the phone number 8276875110. On verification, the phone number was found to be registered in the name of Soumyadeep Talapatra. So, on the basis of these evidences alone it cannot be concluded that Mr. Dey was carrying the gold for the Appellant. Revenue has mainly relied upon the statement of Mr Dey to implicate the Appellant in this case. They have relied upon some decisions in the Order-in-Original to support their claim that the statement of the co-accused is an admissible evidence. The First decision relied upon by the Revenue is PRAVEEN DUMAR SARAOGI VERSUS UNION OF INDIA [2014 (2) TMI 643 - ALLAHABAD HIGH COURT]. The said decision was relating to granting of bail in a case of a complaint under Section 135 of the Customs Act, 1962 and subsequent application for quashing of bail under Section 482 of the Criminal Procedure Code. This is not a case similar to the present case on hand and hence, the said decision has no application in the Appellant’s case. The second decision relied upon by the Revenue is NARESH J. SUKHAWANI VERSUS UNION OF INDIA [1995 (11) TMI 106 - SUPREME COURT]. In this case, the statement of co-accused was supported by other evidences like photographs and other intrinsic material as mentioned in paragraph 3 of the said decision and hence, the said decision is distinguishable on the facts of the case since in the case of the Appellant, there is no other evidence available to implicate the Appellant in the seizure of the gold. The third decision relied upon by the Revenue is MR. KP. ABDUL MAJEED, S/O. HUSSANKOYA HAJI VERSUS COMMISSIONER OF CUSTOMS, COCHIN [2014 (7) TMI 730 - KERALA HIGH COURT]. The facts of the case in the said decision, is also different since there were other evidences of 17 persons as mentioned in Paragraphs 2, 9 & 14 of the said order. Several persons have spoken about the involvement of the petitioner in the smuggling activity. The said judgment also mentioned that confessional statement of co-accused can be treated as evidence provided sufficient materials are available to corroborate the same. In the case of the appellant there is only one statement and no other corroborative evidence. The said judgment has no relevance in the facts and circumstances of the Appellant’s case. The fourth decision relied upon by the Revenue is KI. PAVUNNY VERSUS ASSTT. COLLR. (HQ.), C. EX. COLLECTORATE, COCHIN [1997 (2) TMI 97 - SUPREME COURT]. This decision is in respect of the confession of the accused himself and not by co-accused. The said decision also repeatedly speaks about the requirement of corroborative evidence by holding that the Rule of Practice & Prudence requires that confession should be corroborated by independent evidence. In the case of Appellant, there is no confession by the Appellant. Hence, the said judgment of K.I. Pavunny has no application in the facts and circumstances of the Appellant’s case. The Appellant relied on various decisions of High Courts and Tribunals. From the decisions cited, it is found that the statement of a co-accused is a weak evidence. Without any corroborative evidence, the statement of the co-accused alone is not sufficient to implicate the Appellant, as has been done in this case. The Appellant raised the issue of relevancy of statements relied upon by the Adjudicating Authority. They have referred sections 138 B of Customs Act 1962 and section 9D of Central Excise Act,1944, which are pari materia to each other. The contention of the Appellant is that the Adjudicating Authority has not followed the procedure prescribed in the said sections before relying on the said statement of the co-accused in this case and hence any conclusion arrived at on the basis of that statement is legally not tenable. Section 9D is pari materia to Section 138 B of Customs Act 1962 and hence the ratio of the above said decision squarely applicable to this case as well . In this case, the adjudicating Authority has not examined the person who has given the statement which has been relied upon to implicate the Appellant. Also, no opportunity of cross examination given to the Appellant to question the basis on which the co accused has implicated the Appellant in this case. When the procedure set out in Section 138 B is not followed, the statement of the co accused has no evidentiary value. The findings in the impugned order against the Appellant are not supported by any corroborative evidence and hence not sustainable - the penalty imposed against the Appellant is not sustainable and set aside the same - appeal allowed Issues Involved:1. Legitimacy of the penalty imposed on the Appellant.2. Reliance on the statement of the co-accused.3. Compliance with Section 138B of the Customs Act, 1962.4. Admissibility and corroboration of evidence.Summary:1. Legitimacy of the Penalty Imposed on the Appellant:The Appellant challenged the imposition of a penalty under Section 112(b) of the Customs Act, 1962, arguing that the findings against him were based on assumptions and the uncorroborated statement of a co-accused. The Tribunal found that there was no independent evidence to support the involvement of the Appellant in the smuggling of gold, and the penalty imposed was not sustainable.2. Reliance on the Statement of the Co-Accused:The Appellant contended that the statement of the co-accused, Shri Bishnupada Dey, was the sole basis for implicating him. The Tribunal noted that the statement of a co-accused is a weak form of evidence and cannot be relied upon without corroboration. The Tribunal also observed that the connection between the Appellant and Shri Dey was based on a phone number registered in someone else's name, which could not conclusively establish the Appellant's involvement.3. Compliance with Section 138B of the Customs Act, 1962:The Appellant argued that the Adjudicating Authority did not comply with Section 138B of the Customs Act, 1962, which requires examining the person whose statement is relied upon and providing an opportunity for cross-examination. The Tribunal agreed, stating that the failure to follow this procedure rendered the statement of the co-accused inadmissible.4. Admissibility and Corroboration of Evidence:The Tribunal examined the decisions cited by the Adjudicating Authority and found them distinguishable from the present case. It emphasized that without corroborative evidence, the statement of the co-accused alone could not implicate the Appellant. The Tribunal held that the findings in the impugned order were not supported by any corroborative evidence and set aside the penalty imposed on the Appellant.Conclusion:The Tribunal concluded that the penalty imposed on the Appellant was not sustainable due to the lack of corroborative evidence and non-compliance with the procedural requirements under Section 138B of the Customs Act, 1962. The appeal filed by the Appellant was allowed, and the penalty was set aside.