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2026 (2) TMI 746
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....s work relating to submission of documents before the customs authorities and the appellant was paid charges for this work. According to the appellant, only in view of the request made by Lokesh Garg he helped Krishan Kumar, a G-Card holder of M/s Cargo Placement and Shipping Agencies in filing the Bill of Entry. The appellant further claims that he did not carry out any clearance of the consignment and that he had no knowledge or prior intimation of the alleged misdeclaration done by the importer. 3. A show cause notice dated 03.02.2011 was issued to number of persons, including the appellant. Paragraph 77 of the show cause notice that concerns the appellant is reproduced below : "77. Investigation revealed that Shri N.K. Singh, G Card holder of M/s Continental Cargo Services has in his statement dated 12.03.2010 has admitted that he was filing Bills of Entry for the imports made in the firms owned by Shri Lokesh Garg; he had collected the import documents from Lokesh Garg, filled the Annexures for submitting in CMC got the check list signed from Sh. Krishan Kumar. Thus he has been the part of the organized group to help out in illegal import made by Shri Lokesh Garg a....
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.... Sehgal or staff of Kamal Sehgal whose names he did not remember. On being asked regarding bill of entry number 872912 dated 04.02.2010 of Jai Sales Organisation, he stated that the import papers viz. Bill of Lading, Packing list, Invoice were handed over to him by Shri Lokesh Garg; that he alongwith Krishan Kumar of Cargo Placement went to the CHA office and he (N. K. Singh) prepared the appendix -A and it was signed by Shri Krishan Kumar on 04.02.2010; that he was also shown check list for bill of entry no. 872912 dated 04.02.2010 showing the importer as Jai Sales Organisation and after seeing it he states that this check list pertains to above mentioned appendix A and it bears the signature of Krishan Kumar; that when the bill of entry print was given to him by CMC, he completed the file for examination by customs by placing invoice, bill of lading, packing list, copy of TR-6 challan and final print of bill of entry in the file; that this file was handed over by him to Lokesh Garg in the parking area of ICD, TKD where he was sitting in his car alongwith Kamal sehgal; that Lokesh Garg handed over this file of bill of entry number 872912 dated 04.02.2010 to Kamal Sehgal in his pre....
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....other CHA company and finally when the bill of entry print was taken he would complete the file and hand it over to Shri Lokesh Garg. It is also admitted by the noticee that Shri Lokesh Garg had in his presence handed over the bill of entry file to Shri Kamal Sehgal CHA for clearance work. It is apparent to any logical person that such a large chain of persons, that too all CHA's, were being used for different work normally for which a single CHA/person is competent to handle. The investigations conducted have conclusively established that the firms M/s D.P.Enterprises, M/s Raj International, M/s Jai Sales Organisation are bogus/non-existent and the noticee has admitted to have indulged in the Customs clearance of the bills of entry of these firms. All these facts on records lends credence to the fact of the involvement and knowledge of the noticee in smuggling of goods of foreign origin in collusion with Shri Lokesh Garg, Shri Kamal Sehgal and Shri Krishan Kumar. g. I find from the show cause notice that Shri Nawal Kishore Singh was called upon to show cause as to why penalty should not be imposed upon him under Section 112 of the Customs Act, 1962. In view of my disc....
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....t. 11. Penalty under section 112(a)(i) of the Customs Act can be imposed for the reason that the appellant abetted the doing or omission of an act. The Supreme Court in Shri Ram observed: "6. It is not enough that an act on the part of the alleged abettor happens to facilitate the commission of the crime. Intentional aiding and therefore active complicity is the gist of the offence of abetment under the third paragraph of Section 107." 12. This decision of the Supreme Court was followed by the Bombay High Court in Amritlakshmi Machine Works and the relevant paragraph is reproduced below: "25. Mere facilitation without knowledge would not amount to abetting an offence. Parliament has specifically included abetment in Section 112(a) of the Act, to include acts done with knowledge, otherwise the first portion thereof "Any person - (a) who in relation to any goods does or omits to do any act ...." would cover acts done or omitted to be done on account of instigation and/or encouragement without knowledge. However, the first portion of Section 112(a) of the Act is only to make person of first degree in relation to the act or omission strictly liable. Persons who ....
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....t 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 unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a court, as they apply in relation to a proceeding before a court." Central Excise Act 18. Section 14 of the Central Excise Act deals with power to summon persons to give evidence and produce documents in inquiries under the Central Excise Act. Any Central Excise Officer duly empowered by the Central Government in this behalf has the power to summon any person whose attendance he considers necessary either to give evidence or to produce a document in any inquiry which such Officer is making for any of ....
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....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 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 making them would be of relevance for the purpose of proving the facts which they contain. 21. It would now be app....
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....ction 9D of the Act came in from detailed consideration and examination, by the Delhi High Court, in J.K. Cigarettes Ltd. v. CCE, 2009 (242) E.L.T. 189 (Del.). Para 12 of the said decision clearly holds that by virtue of sub-section (2) of Section 9D, the provisions of sub-section (1) thereof would extend to adjudication proceedings as well. ***** 22. 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 admitted in evidence in the interests of justice. 23. There is no justification for jettisoning this procedure, statutorily prescribed by plenary parlia....
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....o the circumstances of the case, the statement should be admitted in the interests of justice. 26. In fact, Section 138 of the Indian Evidence Act, 1872, clearly sets out the sequence of evidence, in which evidence-in-chief has to precede cross-examination, and cross-examination has to precede re-examination. 27. It is only, therefore, - (i) after the person whose statement has already been recorded before a gazetted Central Excise Officer is examined as a witness before the adjudicating authority, and (ii) the adjudicating authority arrives at a conclusion, for reasons to be recorded in writing, that the statement deserves to be admitted in evidence, that the question of offering the witness to the assessee, for cross-examination, can arise. 28. Clearly, if this procedure, which is statutorily prescribed by plenary parliamentary legislation, is not followed, it has to be regarded, that the Revenue has given up the said witnesses, so that the reliance by the CCE, on the said statements, has to be regarded as misguided, and the said statements have to be eschewed from consideration, as they would not be relevant for proving the t....
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....atement should be admitted. The said provision in the statute book seems to have been made to serve the statutory purpose of ensuring that the assessee are not subjected to demand, penalty interest on the basis of certain admissions recorded during investigation which may have been obtained under the police power of the Investigating authorities by coercion or undue influence. 9.5 ***** The provisions contained in Section 9D, therefore, has to be construed strictly and held as mandatory and not mere directory. Therefore, unless the substantive provisions contained in Section 9D are complied with, the statement recorded during search and seizure operation by the Investigation Officers cannot be treated to be relevant piece of Therefore, we would say that even mere recording of statement is not enough but it has to be fully conscious application of mind by the adjudicating authority that the statement is required to evidence on which a finding could be based by the adjudicating authority. A rational, logical and fair interpretation of procedure clearly spells out that before the statement is treated relevant and admissible under the law, the person is not only required....
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....Act, on which the Learned ASG sought to rely. Statements, under Section 108 of the Act, we may note, though admissible in evidence, acquire relevance only when they are, in fact, admitted in evidence, by the adjudicating authority and, if the affected assessee so chooses, tested by cross-examination. We may, in this context, reproduce, for ready reference, Section 138B of the Act, thus : ***** A Division Bench of this Court has, speaking through A.K. Sikri, J. (as he then was) held, in J & K Cigarettes Ltd. v. Collector of Central Excise [2009 (242) E.L.T. 189 (Del.)] that, by virtue of sub-section (2), Section 138B(1) of the Act would apply, with as much force, to adjudication proceedings, as to criminal proceedings. ***** We express our respectful concurrence with the above elucidation of the law which, in our view, directly flows from Section 138B(1) of the Act - or, for that matter, Section 9D of the Central Excise Act, 1944. 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....
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....also not admissible." (emphasis supplied) 27. A Division Bench of this Tribunal in Surya Wires after examining the aforesaid decisions of the High Court held that the statements made under section 108 of the Customs Act during the course of an inquiry under the Customs Act shall be relevant for the purpose of proving the truth of the facts contained in them only when such persons are examined as witnesses before the adjudicating authority and the adjudicating authority forms an opinion that the statements should be admitted in evidence. 28. It, therefore, transpires from the aforesaid decisions that both section 138B(1)(b) of the Customs Act and section 9D(1)(b) of the Central Excise Act contemplate that when the provisions of clause (a) of these two sections are not applicable, then the statements made under section 14 of the Central Excise Act or under section 108 of the Customs Act during the course of an inquiry under the Acts shall be relevant for the purpose of proving the truth of the facts contained in them only when such persons are examined as witnesses before the adjudicating authority and the adjudicating authority forms an opinion that the statements should be....