TaxTMI 
TaxTMI 
2024 (2) TMI 1101
X X X X Extracts X X X X
X X X X Extracts X X X X
....export of 104 crates of gypsum boards. M/s.FG Global Resources, Malaysia, was shown at the consignor. 3. The search of the cargo leads to recovery of 1.650 MTs. of red sanders, prohibited goods under the Customs Act. The red sanders were kept concealed under gypsum boards in 94 crates by creating a cut cavity inside the pile of gypsum boards. Following the seizure, the office premises of M/s.Freedom Impex was searched. The Proprietor John Alexander was secured and his statement under Section 108 of the Customs Act was recorded on 26.03.2006. The said statement found inclupatory in nature, admitting the mis-declaration also indicting T.Manivannan, the appellant herein as the abettor and supplier of the red sander logs, which is a prohibited goods. 4. Thereafter, Manivannan's shop premises and godown were searched. Nothing incriminating was recovered. He was served with a show cause notice and confronted with the statement of John Alexander incriminating him in the offence. Manivannan denied any knowledge about the attempt of illegal export of red sanders. After recording his statements on three different dates, Manivannan was arrested on 19.06.2006 and also detained under COFE....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 130(1) of the Customs Act. The Division Bench of this Court at the time of admitting the appeal, granted stay of the order on condition that the appellant deposits 50% of the penalty and framed the following substantial questions of law for consideration:- ''(a) Whether the 1st Respondent Tribunal as a final fact finding body ought to have asked for corroboration on material particulars in the statement of co-accused John Alexander by independent evidence/material so as to rely on the same for suspending the penal liability against the Appellant? (b) Whether the 1st Respondent Tribunal has committed an error of jurisdiction in not even adverting to or evaluating the intrinsic worth of the exculpatory statements of the Appellant, which are on record in juxtaposition to the so called confessional and voluntary statements of the said John Alexander?'' 8. After considering the submissions of the rival parties, the Division Bench of this Court observed, no discussion has been made with regard to the factual aspects put forth on the side of the appellant. Then held, the order passed by the appellate authority is not legally and factually sustainab....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that it is the burden of the appellant to rebut those facts, which are facts not existing. He further submitted that the judgments of the Hon'ble Supreme Court rendered in Surjeet Singh Chhabra vs. Union of India reported in 1997 (89) E.L.T. 646 (SC) and K.I.Pavunny vs. Assistant Collector (HQ.), Central Excise Collectorate, Cochin reported in 1997 (90) E.L.T. 241 (SC) were misapplied to the facts of the case by the Tribunal and the facts were tweaked to suit the case of the Department. 11. The learned Senior Panel Counsel appearing for the Customs submitted that, it is well settled principle of law that the statement recorded under Section 108 of the Customs Act is a substantive piece of evidence not only against the maker of the statement, but also against the co-accused. No corroboration to the statement is required. The appellant was given adequate opportunity to provide rebuttal evidence, but nothing produced by him to prove his innocence. Apart from the two judgments cited by the Tribunal, even recently, the Division Bench of the Karnataka High Court in Commissioner of Customs, Mangaluru vs. Imtiaz Ahmed (2023 (8) Centax 2 (Kar.)) by its order dated 15.12.2022, has he....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f retracted confession statements alleged to have been obtained under force, threat or coercion. The three Judges Bench of the Hon'ble Supreme Court in K.I. Pavunny vs. Assistant Collector (H.Q.) Central Excise Collectorate, Cochin (cited supra), after referring to the earlier Constitutional Bench decisions rendered in Haricharan Kurmi and Jogia Hajam vs. State of Bihar (AIR 1964 SC 1184) and Nisshi Kant Jha vs. State of Bihar (1969 (1) SCC 347) and also few more judgments including Naresh J. Sukhawani vs. Union of India (1995 Supp (4) SCC 663) and Surjeet Singh Chhabra vs. Union of India (1997 (3) SCC 721 : 1997 (89) ELT 646), held as under:- ''25. It would thus be seen that there is no prohibition under the Evidence Act to rely upon the retracted confession to prove the prosecution case or to make the same basis for conviction of the accused. Practice and prudence require that the court could examine the evidence adduced by the prosecution to find out whether there are any other facts and circumstances to corroborate the retracted confession. It is not necessary that there should be corroboration from independent evidence adduced by the prosecution to corrobo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Three Judges Bench of the Hon'ble Supreme Court and later by four Judges Bench in Balbir Singh vs. State of Punjab (AIR 1957 SC 216) and subsequently before the Constitutional Bench in Haricharan Kurmi and Jogia Hajam vs. State of Bihar (AIR 1964 SC 1184). The march of law on this legal point succinctly extracted in K.I.Pavunny's case as below: - ''21. In Kashmira Singh case [(1952) 1 SCC 275 : AIR 1952 SC 159 : 1952 SCR 526], the co-accused, Gurcharan Singh made a confession. The question arose whether the confession could be relied upon to prove the prosecution case against the appellant Kashmira Singh. In that context, Bose, J. speaking for a Bench of three Judges laid down the law that the Court requires to marshal the evidence against the accused excluding the confession altogether from consideration. If the evidence dehors the confession proves the guilt of the appellant, the confession of the co-accused could be used to corroborate the prosecution case to lend assurance to the Court to convict the appellant. The Court considered the evidence led by the prosecution, dehors the confession of co-accused and held that the evidence was not sufficient to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed cannot be treated as substantive evidence. If the Court believed other evidence and felt the necessity of seeking an assurance in support of its conclusion deducible from the said evidence, the confession of the co-accused could be used. It was, therefore, held that the Court would consider other evidence adduced by the prosecution. If the Court on confirmation thereof forms an opinion with regard to the quality and effect of the said evidence, then it is permissible to turn to the confession in order to receive assurance to the conclusion of the guilt of the accused. It is, thus, seen that the distinction has been made by this Court between the confession of an accused and uses of a confession of the co-accused at the trial. As regards the confession of the accused and corroboration to the retracted confession, in Girdhari Lal Gupta v. D.N. Mehta, Asstt. Collector of Customs [(1970) 2 SCC 530 : 1970 SCC (Cri) 496], a Bench of two Judges considered and held that if the evidence of an investigating officer is found to be reliable, whether it can be used to corroborate the evidence depends on the facts of each case. In that case, relating to the offence under Foreign Exchange Regu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... which are within the exclusive knowledge of the co-noticee, presumption with the aid of Section 106 of the Evidence Act can be drawn. 20. The learned counsel for the appellant referring the statements of the appellant, which is exculpatory and total denial of his involvement in the alleged abetment to export red sanders through John Alexander and the retracted statement of John Alexander indicting the appellant submitted that, the statements read as a whole, would clearly show that the Department failed to check the veracity of facts, which are easily verifiable. Relying on the uncorroborated statement of a tainted person is contrary to the law laid by the Hon'ble Supreme Court. 21. Per contra, the learned counsel representing the Department heavily relying upon the statement of John Alexander and the statements of appellant T.Manivannan submitted that, the final fact finding authority namely, CESTAT had applied the principle of preponderance of probability and the principle fraud vitiates all solemn proceeding and righly held, the appellant is liable to pay penalty for abetting John Alexander to illegally export red sanders by misdeclaring it as gypsum boards. The mater....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nan. It is relevant to note that the identification of Manivannan through photograph was after about three months from Manivannan was called to give his statement. Incidentally, it was also on the day when he was arrested and remanded to judicial custody. 24. From the appellant Manivannan, three statements were recorded. First statement is on 31.03.2006, the second statement is on 04.04.2006 and the third statement is on 19.06.2006. The scrutiny of these statements reveals that the appellant had admitted that he know John Alexander of Tuticorin while he was doing garment business in the name of M/s.Raja International during the year 2000-2001. He recently spoke to Alexander over phone regarding alliance for his daughter to verify the credential of the prospective bridegroom. When the statement of John Alexander dated 26.03.2006 was shown to Manivannan and asked to give his explanation, Manivannan after going through the statement, has stated that he is noway connected with his (Alexander) statement. He has not involved with Alexander in red sanders business. When he was asked about whether he know about the Company by name, M/s.Freedom Impex, Tuticorin, (the Company of John Alex....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., which was supposed to be recorded on the same day at Madurai Central Prison. In the impugned order, the conduct of the appellant his refusal to sign the statement been considered as an attended circumstances to infer his guilty. Whereas, the time and sequence apparently indicates that by all probability, the statement of John Alexander purported to have recorded in Madurai Central Prison on 19.06.2006 could not have reached Chennai and shown to the appellant on the same day at 12.00 noon, when he appeared before the Senior Intelligence Officer, D.R.I. Further, by recording that the appellant had refused to sign the statement, the Department has made it as a reason to arrest him and produce before the Magistrate on the same day at about 09.00 p.m. 28. The order of CESTAT, which is impugned in this appeal, to say the least is smeared with perversity. Misapplication of law and distortion of facts found in abundance in the impugned order. While remitting the matter back for reconsideration, this Court, vide order dated 31.01.2014, ordered CESTAT being the final fact finding authority, to look into the factual aspect put forth by both parties and consider the recent judgments of th....