TaxTMI 
TaxTMI 
2022 (8) TMI 184
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....t also provide consultancy services in relations to the Government's various export incentive scheme. During the period 2008-09 the Appellant's company had purchased 700 Licences from Shri Kalpesh Daftary of M/s Sankalp Creations Pvt. Ltd. and sold the same to M/s Hindalco Industries Ltd. Shri Kalpesh Daftary is a broker/trader dealing in sale and purchase of the duty free licences. On investigation by the DRI, 93 Licences out of 700 Licenses purchased by M/s Padmavti Agencies Pvt. Ltd. from M/s Sankalp Creations Pvt. Ltd. in turn were sold to M/s Hindalco were found to be forged. The officers of DRI had searched many premises in different parts of country and withdrawn numerous documents during the investigation. Statements of many persons/ brokers, including appellant and other director of M/s Padmavati and its employees, were recorded by DRI during the course of investigation. The investigation conducted by DRI brought out that forged Duty Entitlement Pass Book (DEPB) / Vishesh Krishi and Gram Udyog Yojana (VKGUY) licences were used by M/s. Hindalco Industries Ltd. towards payment of Customs Duty at the time of importation. Accordingly, on completion of investigation, the DRI ha....
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....s, bank documents, letter heads of different firms etc. was undertaken by Shri Kalpesh Draftary in association with Shri Piyush Viramgama, Shri Niyaz Ahmed and Shri Vijay Ganhiya in such a precise manner that no one, except the said four persons, could make out at any state that the documents were forged till DRI got specific information. These facts have also been confirmed by the Ld. Commissioner in his findings at various stages. Therefore, only because the disputed licences were sold by Shri Kalpesh Daftary through Appellant to M/s. Hindalco, it cannot be inferred that he was aware of fraudulent forgery of licences and its documents, more so because neither Appellant has admitted the same at any stage nor does any other person in the investigation, except Shri Kalpesh Daftary, has said so. 3.2 He also submits that consequent to detection of fraud by DRI and having come to know that Shri Kalpesh Daftary and others have betrayed Appellant and his company by intentionally selling forged licences/documents, he had filed Police Complaint bearing FIR No. I 45 at Dahej Police Station on 18.07.2010. Consequent to the complaint, Shri Kalpesh Daftary was arrested on 15.09.2010 whereas....
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....ort only etc. Appellant had submitted all the details to investigation agency through various letters and investigation had framed the charges against him based on selective documents and completely ignored other documentary evidences of purchase of other genuine licences and payment and receipts towards other transactions. Appellant also produced statement showing the genuine licenses purchased from Kalpesh Daftary and used at Manglaore Port, as statement showing other genuine licenses purchased on heavy discount from Shri Kalpesh Daftary and sold to M/s Hindalco and a statement showing genuine licenses purchased from Shri Kalpesh Daftary wherein payment were made after gap of long time, so as to prove that base of allegation and confirmation of allegation are not correct at all. 3.6 Without prejudice he also submits that plain reading of Section of provisions of Section 112 makes it amply clear that the same provides for penalty for improper importation of goods into India or abatement in such importation. It is on record that neither he was importer of the goods nor had he or M/s Padmavati abetted in utilization of said 93 Licenses for payment of customs duty at Dahej Port. I....
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....re, in fact, forged by Shri Niyaz Ahmed at Kanpur using the photocopies of the corresponding genuine licences provided by Shri Kalpessh Dafttary. This fact has been confirmed by Shri Piyush Viramgama as well as Shri Kalpesh Daftary in their statements. The said fact itself clearly established that Appellant has not forged the disputed licenses. We do not find any independent evidences which may establish that appellant was aware for forgery of licenses. Only because the disputed licences were sold by Shri Kalpesh Daftary through the Appellant to M/s Hindalco, it cannot be concluded that Appellant was aware of fraudulent forgery of licences. 5.1 It is on record that during the period 2008-2009 the Appellant's company had purchased 700 licences from Shri Kalpesh Daftary and sold the same to M/s Hindalco and also purchased about 1500 licences from other brokers/ exporters and sold the same to M/s Hindalco. No irregularity was noticed by the investigating authority other than 93 disputed licenses, therefore bonafide act of the Appellant cannot be doubted. In the present matter we also noticed that in fact Appellant themselves have become victim of the fraud, the same is also clear f....
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....el.) = 2011 (22) S.T.R. 225 (Del.). In fact of the present case, when the statements of Shri Kalpesh Daftary were heavily relied upon to penalise the appellant, the said statements being third party evidence and when the appellant seriously disputed the same, it was bounden duty on the part of the Ld. Commissioner to cross examine the witnesses and only thereafter such statements could have been relied as a piece of evidence, which Ld. Commissioner has gravely failed to do his duty. In this circumstances the statements lost it's evidentiary value. Therefore due to non compliance of Section 138B of the Customs Act, 1962 on the part of Ld. Commissiomer, the statements of Shri Kalpesh Daftary relied upon to fasten the penalties upon the appellant are not admissible as evidence. 5.3 We find that on the issue of cross examination in terms of Section 138B, in the matter of Kallatra Abbas Haji (supra) 1994 (69. ) E.L.T. 212 (Ker.) the Hon'ble High court of Kerala has considered Section138B of the Act of 1962 and it has held as follows :- "25. True, Section138B states that a statement made and signed by a person before any gazetted officer of customs is relevant to prove the tr....
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....even without cross-examination. This, however, is how the CESTAT has misunderstood the section. All that the section says is that for want of production of a witness. This Section 108 statement does not automatically cease to become relevant. Questions of relevancy and proof are yet to determine by the Indian Evidence Act, and the CESTAT wholly failed to take these into account." 6. In the facts of the present case, it is on record that Ld. Commissioner has disallowed the request of cross-examination of persons and relied upon such statements as evidence. The impugned order-in-original does not record a finding that, any of the conditions specified under Sections 138B(1) of the Act of 1962 stands satisfied thereby such statements without cross-examination of such witness became absolutely irrelevant. In such circumstances, the adjudication proceedings conducted by the adjudicating authority and resultant the impugned order-in-original stands vitiated by breach of principles of natural justice. The impugned order-in-original is therefore legally not correct on this ground also. 7. In the impugned matter we also find that Ld. Commissioner only on the basis of statements of Shri....
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....ar MANU/SC/0059/1964 : (1964) 6 SCR 623 at 631-633 wherein it was observed : "As we have already indicated, this question has been considered on several occasions by judicial decisions and it has been consistently held that a confession cannot be treated as evidence which is substantive evidence against a co-accused person. In dealing with a criminal case where the prosecution relies upon the confession of one accused person against another accused person, the proper approach to adopt is to consider the other evidence against such an accused person, and if the said evidence appears to be satisfactory and the court is inclined to hold that the said evidence may sustain the charge framed against the said accused person, the court turns to the confession with a view to assure itself that the conclusion which it is inclined to draw from the other evidence is right. As was observed by Sir Lawrence Jenkins in Emperor v. Lalit Mohan Chuckerburty a confession can only be used to "lend assurance to other evidence against a co-accused". In re Periyaswami Moopan Reilly. J., observed that the provision of Section 30 goes not further than this : "where there is evidence against the co-....