2023 (12) TMI 385 - AT - Customs

CESTAT sets aside Section 114 penalty for illicit foreign currency export after trial court acquittal

CESTAT Bangalore set aside penalty under Section 114 of Customs Act, 1962 imposed on appellant for allegedly arranging illicit export of foreign ... Effect of criminal acquittal on civil/penalty proceedings - reliance on co-accused statements and requirement of corroboration - penalty under Section 114 of the Customs Act, 1962 - confiscation of seized foreign currency and materials used for concealment - remand for fresh adjudication where original order set aside for want of jurisdiction - need for additional evidence beyond trial court record to sustain departmental penaltyEffect of criminal acquittal on civil/penalty proceedings - reliance on co-accused statements and requirement of corroboration - penalty under Section 114 of the Customs Act, 1962 - need for additional evidence beyond trial court record to sustain departmental penalty - Validity of penalty imposed on the appellant under Section 114 of the Customs Act, 1962 in view of the trial court's acquittal and the evidentiary basis relied upon by the Commissioner. - HELD THAT: - The Tribunal examined whether the Commissioner could sustain penalty after the Trial Court, on the same facts, acquitted the appellant and others. While recognising that adjudicatory and criminal proceedings are distinct, the Tribunal applied the settled principle that reliance solely on statements of co-accused requires caution and ordinarily demands corroboration. The record showed no additional material beyond the statements placed before the Trial Court; the Trial Court had found no direct evidence against the appellant and acquitted him. In the absence of further or independent evidence to connect the appellant to the offence, the Tribunal held that imposition of penalty under Section 114 was not sustainable and that the Commissioner had proceeded on the same uncorroborated material which had earlier resulted in acquittal. [Paras 6, 8]Order imposing penalty under Section 114 set aside insofar as it relates to the appellant.Confiscation of seized foreign currency and materials used for concealment - remand for fresh adjudication where original order set aside for want of jurisdiction - Whether the Commissioner had adjudicated the question of confiscation of the foreign currency and the vehicle after this Tribunal earlier set aside the original order for lack of jurisdiction. - HELD THAT: - The Tribunal noted that its earlier order had set aside the Deputy Commissioner's Order-in-Original as null and void for lack of jurisdiction and had remanded the matter to the jurisdictional Commissioner for fresh adjudication. The show-cause notice had proposed confiscation of the foreign currency and the vehicle. The impugned order did not decide the question of confiscation afresh despite the remand direction. Given that the original order was rendered null and void and the Commissioner was required to adjudicate all issues in the show-cause notice de novo, the Tribunal remanded the matter to the Commissioner to decide the confiscation of the foreign currency and the vehicle specified in the notice. [Paras 10, 11]Matter remanded to the Commissioner for fresh adjudication on confiscation of the foreign currency and the vehicle as proposed in the show-cause notice.Final Conclusion: The appeal by the appellant is allowed by setting aside the penalty imposed under Section 114 of the Customs Act, 1962; separately, the Revenue's appeal is allowed to the limited extent that the matter is remanded to the Commissioner for de novo consideration of confiscation of the seized foreign currency and the vehicle as proposed in the show-cause notice. Issues Involved:1. Imposition of penalty on Mr. C. M. Abdul Razak under Section 114 of the Customs Act, 1962.2. Confiscation of foreign currency and other materials involved in the alleged offense.Summary:Issue 1: Imposition of Penalty on Mr. C. M. Abdul Razak under Section 114 of the Customs Act, 1962The appellant, Mr. C. M. Abdul Razak, was penalized by the Commissioner for his alleged involvement in concealing foreign currency intercepted from a passenger, Mujeeb Rehman. Despite the appellant's acquittal by the Trial Court, which found no material connecting him to the seizure, the Commissioner imposed a penalty of Rs. 10,00,000/-. The appellant argued that the acquittal should preclude the imposition of a penalty, citing several judgments to support his claim. The Tribunal noted that the Trial Court had found no direct evidence against Mr. Abdul Razak and had acquitted him under Section 248(1) of CrPC. The Tribunal agreed with the Commissioner that acquittal in criminal proceedings does not automatically nullify penalties in adjudication proceedings but emphasized that the evidence must be scrutinized. The Tribunal found no additional evidence beyond the co-accused's statements that were already considered by the Trial Court. Consequently, the Tribunal set aside the penalty imposed on Mr. Abdul Razak under Section 114 of the Customs Act, 1962.Issue 2: Confiscation of Foreign Currency and Other MaterialsThe Department appealed against the impugned order, arguing that the Commissioner failed to address the confiscation of the foreign currency and materials involved. The Tribunal had previously set aside the Order-in-Original due to jurisdictional issues, rendering it null and void. The show-cause notice had proposed confiscation under Sections 113 and 119 of the Customs Act, 1962. The Tribunal agreed with the Revenue that the Commissioner should have addressed all issues from the original show-cause notice. Therefore, the Tribunal remanded the matter to the Commissioner to decide on the confiscation of the foreign currency and the vehicle involved as per the show-cause notice.Order:(a) Customs Appeal No. 862 of 2011: The penalty imposed on Mr. C. M. Abdul Razak under Section 114 of the Customs Act, 1962, is set aside.(b) Customs Appeal No. 1746 of 2011: The matter is remanded to the Commissioner to consider the confiscation of foreign currency and the vehicle as proposed in the show-cause notice.(Order pronounced in open court on 06/12/2023.)