TaxTMI 
TaxTMI 
2025 (6) TMI 274
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....ed Representative of the Department ORDER JUSTICE DILIP GUPTA These two Customs Appeal have been filed by Shanti Swaroop Sharma and Sangeet Tuteja, Directors of New Era Trading Pvt. Ltd., an exporter of readymade garments, to assail the order dated 27.04.2023 passed by the Principal Commissioner of Customs, ICD (Exports) Tughlakabad, New Delhi the Principal Commissioner, imposing penalties on them under section 114(iii) and section 114AA of the Customs Act, 1962 the Customs Act for the reason that they had connived with Imran Mirza, Proprietor of M/s Concorde Shipping and Logistics India and instead of exporting the goods to countries listed in the Focus Market Scheme, diverted them to Dubai to enable the exporter to avail undue be....
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....aring the destination of export of goods to the countries listed in Focus Market Scheme but same were diverted to Dubai with a view to avail undue benefits under FMS. (ii) Further, as regards imposition of penalty under Section 114AA of the Customs Act is concerned, I find that Sh Shanti Swaroop Sharma, knowingly prepared and gave false or incorrect information regarding destination of country of export goods to Customs. Shri Shanti Swaroop Sharma gave direction to the freight forwarder to file TR-1 & TR-2 Shipping Bills, arrange fake/bogus landing certificates and House BLs and submitted the same to DGFT, as proof of the delivery of the goods to the consignees in the Focus Market notified countries. All the above facts had been ad....
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....tempt to escape her liability from involvement in the fraud caused to the exchequer. Thus, I find that Ms. Sangeeta Tuteja (Noticee No.3) is also liable to penalty under Section 114AA of the Customs Act, 1962." ( emphasis supplied ) 4. Shri Ashirwad, learned counsel for the appellant assisted by Shri Virat Sharma submitted that the Principal Commissioner committed an illegality in imposing penalties upon Shanti Swaroop Sharma and Sangeeta Tuteja under sections 114(iii) and 114AA of the Customs Act. Elaborating this submission, learned counsel submitted that the finding recorded by the Principal Commissioner that the two appellants, as Directors of New Era Trading Pvt. Ltd., in connivance with Imran Mirza abetted and ind....
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....r is greater. The Principal Commissioner confiscated the goods under section 113 of the Customs Act. 7. As noticed above, the confiscation of goods has been set aside by order of date in Customs Appeal No. 55675 of 2023 filed by New Era Trading Pvt. Ltd. Penalty under section 114(iii) of the Customs Act could not, therefore, have been imposed upon the Shanti Swaroop Sharma and Sangeeta Tuteja. 8. Section 114AA provides that if a person knowingly or intentionally makes signs or uses or causes to be made, any material particular, in the transaction of any business for the purposes of the Customs Act, shall be liable to a penalty not exceeding five times the value of goods. 9. This finding has been recorded on the basis of statement m....
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....n that having regard to the circumstances of the case, the statement should be admitted in evidence, in the interests of justice, except where the person who tendered the statement is dead or cannot be found. In view of the provisions of sub-section (2) of section 9D of the Central Excise Act or sub-section (2) of section 138B of the Customs Act, the provisions of sub-section (1) of these two Acts shall apply to any proceedings under the Central Excise Act or the Customs Act as they apply in relation to proceedings before a Court. What, therefore, follows is that a person who makes a statement during the course of an inquiry has to be first examined as a witness before the adjudicating authority and thereafter the adjudicating authority has....
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....h persons. The provisions of section 9D of the Central Excise Act and section 138B(1)(b) of the Customs Act have been held to be mandatory and failure to comply with the procedure would mean that no reliance can be placed on the statements recorded either under section 14D of the Central Excise Act or under section 108 of the Customs Act. The Courts have also explained the rationale behind the precautions contained in the two sections. It has been observed that the statements recorded during inquiry/investigation by officers has every chance of being recorded under coercion or compulsion and it is in order to neutralize this possibility that statements of the witnesses have to be recorded before the adjudicating authority, after which such ....