Corroborated evidence sustained penalty liability in a fraudulent import scheme, but the penalty was substantially reduced as excessive.

Corroborated evidence, including section 108 statements, documents and investigation findings, established active participation in arranging an advance licence and DEEC book through a fictitious firm, facilitating duty-free import clearance and misdeclaring consignments. The Tribunal held that retraction of the statements did not displace the corroborated record, so liability to penalty under section 112(a) of the Customs Act, 1962 was sustained. However, the penalty was found excessive on the facts and was substantially reduced, so the appeal succeeded only to that limited extent.

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Issues: Whether the appellants were liable to penalty for their role in obtaining the advance licence and DEEC book through a fictitious firm, clearing imported goods under the scheme, and misdeclaring value and weight of the consignments; and whether the quantum of penalty required reduction.

Analysis: The evidence on record, including the statements recorded under section 108 of the Customs Act, 1962, the surrounding documents, and the investigation findings, established that the appellants had participated in arranging the advance licence and DEEC book, had facilitated the import and clearance of the goods, and had acted in a scheme designed to obtain duty-free clearance and derive profit. The retraction of statements was not found sufficient to displace the corroborated material. At the same time, the Tribunal found that the appellants had already admitted assistance in obtaining the licence and arranging the imports, and that the penalty imposed was excessive in the facts of the case.

Conclusion: The appellants were held liable to penalty under section 112(a) of the Customs Act, 1962, but the penalty was reduced substantially.

Final Conclusion: The appeal succeeded only to the extent of reduction of penalty, while the finding of liability was maintained.

Ratio Decidendi: Where the record contains corroborated evidence showing active participation in a fraudulent import scheme, a retraction of statements will not by itself negate liability, though the penalty may be moderated if found excessive on the facts.

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