TaxTMI 
TaxTMI 
2026 (1) TMI 442
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.... to be noticed as under: On 19.09.2013, two lady passengers, accompanied by a girl child, were found near the car park area outside the Cochin International Airport. They were identified as Arifa Haris, Asifa Veerappoyil, as well as the minor daughter of Arifa. After being brought back to the arrival hall, they denied carrying gold or other articles, on being questioned. Thereupon, a personal search was conducted, which revealed that both the ladies were wearing black coloured jackets containing pouches where gold bars were kept hidden. One of the ladies also stated that an LG brand television brought by her was handed over to an officer. Ten gold bars, each weighing one kg, were recovered from the respective ladies, which were seized under the provisions of the Act, along with the materials used for concealing the gold bars as above. The television referred to above was also seized. On the basis of the seizure as above, proceedings were initiated, leading to the revenue recording statements from as many as 33 persons. Arifa also stated that on three earlier occasions - 20.08.2013, 27.08.2013, and 12.09.2013 - gold bars were brought undeclared through the Cochin Internatio....
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....Tribunal, by the impugned order dated 29.03.2022, considered all the appeals together. It is to be noticed that the two ladies mentioned above did not choose to challenge the proceedings initiated against them. 4. The Tribunal considered the contentions raised by the respective parties elaborately. By the impugned order, the Tribunal found that: i. There cannot be any simultaneous levy of penalty under Section 112(a) and (b) of the Act since the statute provides for the levy of either of the penalties. The Tribunal noticed the use of the word 'or' between the two limbs of Section 112, while arriving at the afore finding. Therefore, the penalty against Ashraf Kallungal and T.K. Faiz were set aside. ii. The evidence in the form of the statements obtained was analysed critically by the Tribunal. As regards the alleged smuggling of 36 kgs on the earlier three occasions, it was found that there was no direct evidence, and the allegation was made purely on the basis of the statements of the carriers, specifically noticing that no follow-up action was taken by the revenue. The penalty as regards 36 kgs of gold was found not sustainable. iii. The state....
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....ms Act, 1962, can be effected without actual seizure of the gold allegedly smuggled? 7. We have heard Sri. R. Harisankar, the learned Standing Counsel for the appellant herein, Sri. B. Kumar, the learned senior counsel, instructed by Sri. S. Sivakumar, for the respondents in Cus. Appeal Nos. 2 and 4 of 2023, Sri. K.M. Firoz, the learned counsel for the respondent in Cus. Appeal No. 1 of 2023 and Sri. M. Ajay, the learned counsel for the respondent in Cus. Appeal No. 3 of 2023. 8. Sri. Harisankar, the learned Standing Counsel for the appellant, would contend that the appreciation of the evidence by the Tribunal was flawed. According to him, the statements under Section 108 of the Act were recorded from as many as 33 persons, and the Tribunal only considered/evaluated/appreciated the evidentiary value of just six statements. He would further contend that the statements under Section 108 are recorded during the course of an "inquiry," which is different from an investigation and the statements are to be taken as obtained during a judicial proceeding. Furthermore, he would contend that the statement obtained under Section 108 is not subject to the rigour of Section 25 of the Evid....
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.... of the statements of these six noticees was flawed. Though much reliance has been placed on the provisions of Section 108 of the Act, especially the nature of the "inquiry" which has been equated to be a judicial proceeding, we notice that the provisions of Section 108 only provide for the power to summon persons to give evidence and to produce documents. The provisions of Section 108, as well as the statements obtained thereunder, have to be tested with reference to the provisions of Section 138B, which reads as under: "138B. Relevancy of statements under certain circumstances.- (1) A statement made and signed by a person before any gazetted officer of customs during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains,- (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the court considers unreas....
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....onsidered in accordance with law, including the compliance of S.138B of the Act, 1962." Thus, the evidentiary value of a statement recorded under Section 108 of the Act is subject to the compliance of the provisions of Section 138B of the Act. Here, the provisions of Section 138B have not been shown to have been complied with. 15. We may also notice the judgment of the Punjab and Haryana High Court in Jindal Drugs P. Ltd. and Another v. Union of India and Another [(2016) 340 ELT 67], wherein the challenge raised against the reliance placed on the statements without admitting them under the mandate prescribed by Section 9D of the Central Excise Act, 1944, came up for consideration. It may be straightaway be noticed that the provisions of Section 9D of the Central Excise Act, 1944, are in pari materia with Section 138B of the Act. The court proceeded to law down the law as follows:- "19. Clearly, therefore, the stage of relevance, in adjudication proceedings, of the statement, recorded before a gazetted Central excise officer during inquiry or investigation, would arise only after the statement is admitted in evidence in accordance with the procedure prescribed in clau....
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....es, tested by cross-examination. We may, in this context, reproduce, for ready reference, section 138B of the Act, thus ............................. 77. The framers of the law having, thus, subjected statements, recorded under section 108 of the Act, to such a searching and detailed procedure, before they are treated as relevant in adjudication proceedings, we are of the firm view that such statements, which are yet to suffer such processual filtering, cannot be used, straightaway, to oppose a request for provisional release of seized goods." 17. In the light of the afore, we are of the opinion that the revenue would not be entitled to place any reliance on the statements recorded under Section 108 of the Act. 18. We may also notice the provisions of Section 122A of the Act under which the adjudicating authority has an obligation to provide "an opportunity of being heard" to the noticee. When the opportunity of hearing laid down under Section 122A is read along with the provisions of Section 138B of the Act, we are of the opinion that once the person who gave the statement is examined as a witness, the noticee who is proceeded against under the statute is a....
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....matter: Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may, at the request of the person concerned, be oral. Provided further that notwithstanding issue of notice under this section, the proper officer may issue a supplementary notice under such circumstances and in such manner as may be prescribed." 20. A reading of the afore provisions would show that the statute visualises an adjudication procedure with respect to the proceedings under Chapter XIV of the Act. Section 124 of the Act specifically provides for granting an opportunity of hearing in writing against the grounds for imposition of penalty/confiscation. The Act also requires the noticee to be given a "reasonable opportunity of being heard in the matter". In other words, the principle of audi alteram partem is embedded under the statute during the course of the adjudication proceedings. In the light of this, merely for the reason that no statement has been recorded under Section 108, the respondents cannot be prevented from objecting to the proceedings taken against them. This is especially so, since the statute does not provide for any adverse infe....