2025 (10) TMI 1085

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.... appellant as the then Managing Director of M/s Safetag International under the provisions of section 114 of the Customs Act, 1962 [the Customs Act]. 2. It transpires from the records that M/s Safetag International exported readymade garments and on intelligence received that it was involved in undue export benefits, the Officers of the Directorate of Revenue Intelligence carried out a detailed investigation. 3. A show cause notice dated 15.11.2002 was issued to seven noticees, including M/s Safetag and the appellant. The allegations made in the show cause notice was that the noticees had fraudulently availed duty drawback of Rs. 1,03,67,746/- by inflating the actual value two to three times and the goods also had not reached Russia, ....

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....to fraudulent drawback claims and loss to Govt. exchequer to the tune of more than rupees one crore. I, therefore find him equally responsible of defrauding the Govt. and availment of inadmissible drawback. By his acts of omission and commission, he has made himself liable for penal action as proposed in the show cause notice." (emphasis supplied) 6. Shri Nikhil Gupta learned counsel for the appellant assisted by Rochit Abhishek pointed out that penalty has been imposed upon the appellant under section 114 of the Customs Act, 1962 basis the statements of the accountant Mangal Dev and co-noticees Jaideep Mirchandani and N.K. Gupta, which statements were recorded under section 108 of the Customs Act. Learned counsel states that it....

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....housand rupees, whichever is greater." 10. A perusal of paragraph 81 of the impugned order, which has been reproduced above, shows that penalty has been imposed upon the appellant only on account of the statements made by three persons under section 108 of the Customs Act. 11. The issue that arises for consideration is whether the statement recorded under section 108 of the Customs Act can be considered as relevant evidence under section 138B of the Customs Act. 12. In this connection, reference can be made to the decision of the Tribunal in M/s Surya Wires Pvt. Ltd. vs. Principal Commissioner, CGST, Raipur [Excise Appeal No. 51148 of 2020 decided on 01.04.2025]. The Tribunal examined the provisions of sections 108 and 138B of the ....

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....urt. 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 interests of justice. Once this determination regarding admissibility of the statement of a witness is made by the adjudicating authority, the statement will be admitted as an evidence and an opportunity of cross-examination of the witness is then required to be given to the person against whom such statement has been made. It is only when this procedure is followed that the statements of the persons ....