2024 (10) TMI 1356 - AT - Customs

Primary gold seizure penalties set aside due to inadmissible statement under Section 107 lacking proper authorization

Shri Dulal Krishna Paul, Shri Suman Chandra Paul Versus Commissioner of Customs (Preventive), Shilong

CESTAT Kolkata set aside penalties imposed under Section 112(b)(ii) of Customs Act, 1962 in a case involving primary gold of foreign origin found in a ... Levy of penalty u/s 112(b)(ii) of the Customs Act, 1962 - Primary Gold of foreign origin from a secret cabinet - admissibility of the statement recorded under Section 107 of the Customs Act, 1962 - HELD THAT:- In this case, the statement of Shri Suman Chandra Paul, one of the Appellants, has been heavily relied upon by the ld. adjudicating authority in the impugned order to impose penalty on both the Appellants. Admittedly, the statement of Shri Suman Chandra Paul was recorded under Section 107 of the Customs Act, 1962 which is not an admissible piece of evidence as held by the Tribunal in the case of COMMISSIONER OF CUSTOMS (PREV.), LUCKNOW VERSUS SHEO SHANKER JAISWAL [2010 (2) TMI 1018 - CESTAT NEW DELHI] wherein it was observed 'The presence of injuries found on the driver during his medical examination on 9-6-07 also indicates that the statement of the driver had been recorded under duress. Moreover other than the statement of the driver, there is no corroborative evidence indicating that the sugar loaded in the truck was going to the smuggled into Nepal.' Admittedly, in this case, the statement of Shri Suman Chandra Paul is not recorded on the authorization given by any officer of Customs in this behalf, by General or Special Order from the Principal Commissioner of Customs or Commissioner of Customs, to examine any person during the course of enquiry in connection with the smuggling of any goods. Therefore, the statement recorded from Shri Suman Chandra Paul is not an admissible evidence to implicate the Appellants in this case - the penalties imposed on both the Appellants are set aside. Appeal allowed. Issues Involved:1. Admissibility of the statement recorded under Section 107 of the Customs Act, 1962.2. Imposition of penalties on the appellants under Section 112(b)(ii) of the Customs Act, 1962.Issue-wise Detailed Analysis:1. Admissibility of the Statement Recorded Under Section 107 of the Customs Act, 1962:The primary issue in this case was whether the statement of Shri Suman Chandra Paul, recorded under Section 107 of the Customs Act, 1962, could be considered admissible evidence. The appellants contended that the statement recorded under Section 107 has no evidentiary value in law. According to the appellants, for a statement to be admissible under Section 107, it must be recorded by an officer duly empowered by a general or special order from the Principal Commissioner of Customs or Commissioner of Customs. The Tribunal referenced the case of Commissioner of Customs (Preventive), Lucknow v. Sheo Shankar Jaiswal, which held that statements recorded under Section 107 are not admissible unless the officer recording the statement is duly authorized. In this case, the statement of Shri Suman Chandra Paul was not recorded by an officer with such authorization, rendering it inadmissible as evidence.2. Imposition of Penalties on the Appellants:The penalties imposed on the appellants were based on the inadmissible statement of Shri Suman Chandra Paul. Appellant No. 1, Shri Dulal Krishna Paul, was penalized based on the statement of his nephew, Shri Suman Chandra Paul, which alleged his involvement in the smuggling of gold. However, since the statement was not admissible, there was no substantial evidence against Shri Dulal Krishna Paul to justify the penalty. Similarly, Appellant No. 2, Shri Suman Chandra Paul, was penalized for his alleged role in acquiring, possessing, and transporting smuggled gold. The Tribunal found that the penalties were unjustified as they were based solely on the inadmissible statement. Consequently, the penalties of Rs. 25,00,000/- on Appellant No. 1 and Rs. 5,00,000/- on Appellant No. 2 were set aside.Conclusion:The Tribunal concluded that the penalties imposed on both appellants were not sustainable due to the reliance on an inadmissible statement. The appeals were allowed, and the penalties were set aside, as the evidence against the appellants was insufficient to uphold the penalties under the Customs Act, 1962. The judgment emphasized the necessity for proper authorization for statements to be considered admissible, reinforcing the legal standards for evidence in customs-related offenses.