2025 (8) TMI 105

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....e Foreign Exchange Management Act FEMA for the various acts of omissions and commission as pointed out in the show cause notice. 2. The appellant was noticee no. 4 in the show cause notice. Manish Garg, Mohammad Kashif and Shahzad alias Munna were noticee no's. 1, 2 and 3 in the show cause notice. 3. The allegations against the appellant in the show cause notice is that Manish Garg, (noticee no. 1) in his statement dated 07.08.2019 had stated that he had illegally purchased foreign currency amounting to 2 lakh Euros from the appellant and this fact was reiterated by Manish Garg in his subsequent statement dated 13.11.2019. It, thus, appeared to the department that the appellant was liable to penal action under the provisions of Customs Ac....

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....ubmitted documents to show that the appellant had not dealt with Manish Garg or Mohammad Kashif regarding foreign currency. 6. Shri Rajesh Singh, learned authorised representative appearing for the department, however, supported the impugned order and stated that even Manish Garg, Mohammad Kashif and Shahzad have not filed any appeals before the Tribunal. 7. The submissions advanced by learned counsel for the appellant and learned authorised representative appearing for the department have been considered. 8. The sole issue that arises for consideration is whether the statements made by Manish Garg and Mohammad Kashif under section 108 of the Customs Act can be considered as relevant for the purposes of imposing penalty under section 114....

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...., 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 to form an opinion whether having regard to the circumstances of the case the statement should be admitted in evidence, in the ....

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....atory 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 statements can be admitted in evidence. " 11. The impugned order is based solely on the statements made by Manish Garg and Mohammad ....