TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 627
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.... Customs Act, 1962 [Act]. 3. Appeal No. C/70198/2024 arises from Order-in-Appeal No.1066-CUS/APPL/LKO/2022 dated 16.11.2022 passed by Commissioner (appeals), Customs, CGST & Central Excise, Lucknow by which the imposition of penalty of Rs.5,00,000/- under Section 114(i) of the Act on Shri Rajiv Kumar Biswas [Appellant No.3] has been confirmed. 4. Both the aforesaid Orders-in-Appeal dated 26.09.2022 and 16.11.2022 were passed by Commissioner (Appeals) in separate appeals arising from Order-in-Original No.69/JC/2021-22 dated 07.12.2021 passed by Joint Commissioner, Customs (Preventive) Commissionerate, Lucknow, by which SCN dated 29.09.2020 issued by the Additional Director, Directorate of Revenue Intelligence, Lucknow Zonal, Lucknow was adjudicated and it was held that the onions exported vide four shipping bills retain the character of goods liable to confiscation and penalties of Rs.5,00,000/- each was imposed on Appellant No.1 & 2 under Section 114AA of the Act and a penalty of Rs.5,00,000/- on Appellant No.3 under Section 114(i) of the Act. 5. Briefly stated, the facts of the case are such that Appellant No.1, a proprietorship firm of Smt. Girija Devi, mother of Appella....
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....d from Appellant No.3. 7. Statement of Appellant No.2 was then recorded on 16.10.2019 during which he provided the details of his suppliers and also buyers of Nepal and further admitted that actually onions were exported to Nepal under the garb of potato. Statements of some suppliers, whose details was revealed by Appellant No.2 was also recorded who admitted to have supplied onions to Appellants No.1 & 2. By statement dated 08.11.2019, Appellant No.2 agreed to the contents of his earlier statements. Subsequently, on 19.11.2019, Appellant No.2 was arrested and was released on bail by Sessions Court on 06.01.2020. Statement of one of the driver Shri Laik Ahmed and few transporters were also recorded to the effect that under the grab of potato, onion was transported. During the course of investigation, statements of Shri Ashutosh Chandra Pal and Shri Naresh Kumar Rastogi, both Inspector of Customs, LCS Toothibari were also recorded, on the basis of which it was concluded that due procedure/SOP for export of goods was not followed. The officers also collected toll records showing movement of twelve vehicles from Nashik/Kanpur/Indore towards Chhapwa Toll, Nautanwa, Maharajganj and r....
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.... onion being conclusively proved, no penalty can be imposed on the Appellants. The Ld. Counsels for Appellant No.3 further submitted that SSB register relied upon by the revenue is not a statutory register and the same is meant for recording details of vehicles and not description of goods and the word onions alongwith value has been subsequently added which is clear from the difference in handwriting and in any case the entries contained therein cannot be accepted without producing the writer of such entries or his affidavit. The Ld. Counsels also submitted that due procedure/SOP for export of goods was followed and therefore penalty under Section 114(i) cannot be imposed on Appellant No.3. 11. Ld. Counsel for Appellants No.1 & 2 adopted the submissions made by Ld. Counsels for Appellant No.3 and submits that no case for imposition of penalty on Appellant No.1 & 2 is made out. He further submits that the statement dated 16.10.2019 of Appellant No.2 was obtained under duress and coercion and statement dated 08.11.2019 admitting export of onions and implicating Appellant No.3 was obtained after manhandling Appellant No.2, which fact was stated by him in his bail application and a....
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....r duress or coercion. Thus, it was for the lower authorities to find out whether there was any duress or coercion, before relying on the statements since an involuntary statement is of no evidentiary value, as held by Hon'ble Supreme Court in Commissioner of Customs vs. Ganpati Overseas (2023) 10 SCC 484, as under:- "53. Thus, what is deducible from an analysis of the relevant legal provisions and the corresponding judicial pronouncements is that a customs officer is not a police officer. Further, the person summoned and who makes a statement under Section 108 is not an accused. However, a statement made by a person under Section 108 of the Customs Act before the customs officer concerned is admissible in evidence and can be used against such a person. Object underlying Section 108 is to elicit the truth from the person who is being examined regarding the incident of customs infringement. Since the objective is to ascertain the truth, the customs officer must ensure the truthfulness of the statement so recorded. If the statement recorded is not correct, then, the very utility of recording such a statement would get lost. It is in this context that the customs officer who i....
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.... that neither the said statement was tested on the anvil of Section 138B nor Shri Laik Ahmed was offered for cross examination. I find from record that the adjudicating authority has relied on statement of Shri Laik Ahmed without invoking Section 138B of the Act. Section 138B of the Act is pari-materia to Section 9D of the Central Excise Act, 1944, which was considered by Hon'ble Punjab & Haryana High Court in Jindal Drugs Pvt. Ltd. vs. Union of India 2016 (340) E.L.T. 67 (P&H) and the following was held:- "16. If none of the circumstances contemplated by clause (a) of Section 9D(1) exists, clause (b) of Section 9D(1) comes into operation. The said clause prescribes a specific procedure to be followed before the statement can be admitted in evidence. Under this procedure, two steps are required to be followed by the adjudicating authority, under clause (b) of Section 9D (1), viz. (i) the person who made the statement has to first be examined as a witness in the case before the adjudicating authority, and (ii) the adjudicating authority has, thereafter, to form the opinion that, having regard to the circumstances of the case, the statement should be admitt....
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.... summon the person who had made the statement, examine him as witness before him in the adjudication proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice." 18. Further, in Basudev Garg vs. Commissioner of Customs 2013 (294) E.L.T. 353 (Del), it has been held that the provisions of Section 138B of the Act are identical to Section 9D of the Central Excise Act, 1944. In view of the above dicta, a statement recorded before an officer of customs, cannot be straight away relied upon, unless and until he invokes clause (a) of Section 138B(1) and in all other cases, the statement has to be first admitted in evidence by first summoning the person, examining such person and thereafter arriving at an opinion that the statement should be admitted in evidence. The records reveal that neither clause (a) of Section 138B(1) has been invoked nor the procedure contemplated under clause (b) of Section 138B (1) has been followed in the present case and therefore it was not open for the adjudicating authority to rely on the statements of Shri Laik Ahmed, Shri Sanjay Kumar Gupta, Shri Harikesh Narain Sh....
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....at once it was the revenue who was relying on the entries, it was for the revenue to prove the same by either adducing the affidavit of the author of such entries or by producing the author for cross examination, as held by Hon'ble Supreme Court in Bareilly electric Supply Co. Ltd. vs. Workmen and Ors. (1971) 2 SCC 617 as under:- "But the application of principle of natural justice does not imply that what is not evidence can be acted upon. On the other hand what it means is that no materials can be relied upon to establish a contested fact which are not spoken to by persons who are competent to speak about them and are subjected to cross-examination by the party against whom they are sought to be used. When a document is produced in a Court or a Tribunal the questions that naturally arise is, is it a genuine document, what are its contents and are the statements contained therein true. When the Appellant produced the balance-sheet and profit and loss account of the Company, it does not by its mere production amount to a proof of it or of the truth of the entries therein. If these entries are challenged the Appellant must prove each of such entries by producing the books a....