TaxTMI 
TaxTMI 
2026 (8) TMI 812
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....r, CGST & Central Excise, Noida wherein penalty of Rs.6,00,000/- has been imposed on him under Section 112 (a) & (b) (i) of the Customs Act, 1962. Shri Ajit Singh (Appellant No.3) has filed appeal against the same Order-In-Original No. 02-PC-NOIDA-CUS-2024-25, dated 05.06.2024 passed by Commissioner, CGST & Central Excise, Noida wherein penalty of Rs.6,00,000/- has been imposed on him under Section 112 (a) & (b) (i) of the Customs Act, 1962. As all these appeals have been filed against the same Order-in-Original, all are taken up together for decision by a common order. 2. The facts of the case are that M/s V. V. Impex (Appellant No.1) is an approved unit of Noida Special Economic Zone (NSEZ) engaged in manufacturing of gold and Silver jewellery. On 29.06.2021, an information was received from the NSEZ gate security regarding alleged theft incident in the premises of the Appellant-Company at SDF-C-06(B), NSEZ Noida. Accordingly, a team of two preventive officers lead by an Appraiser visited the unit and sealed three safes in the premises, as the authorized persons of the unit was not present. A Panchnama dated 29.06.2021 was also drawn to this effect before independent witnesses....
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.... d. I do not impose penalty upon M/s V.V. Impex (Noticee-1) and Shri Vikas Verma (Noticee-2), Proprietor of M/s V.V. Impex (Noticee-1)under the provisions of Section 112 (a) & (b) of the Customs Act, 1962 in view of the penalty imposed under Section 114A of the Customs Act, 1962. e. I impose penalty of Rs 6,00,000/- (Rs Six Lakhs only) upon Shri Sumer Chand Verma (Noticee-3), under the provisions of Section 112(a) & (b) (i) of the Customs Act, 1962. f. I impose penalty of Rs 6,00,000/- (Rs Six Lakhs only) upon Shri Ajit Singh (Noticee-4), under the provisions of Section 112(a) & (b) (i) of the Customs Act, 1962. g. I impose penalty of Rs 10,00,000/- (Rs Ten Lakhs only) upon Shri Vikas Verma (Noticee-2), Proprietor of M/s V.V. Impex (Noticee-1) under the provisions of Section 114AA of the Customs Act, 1962. h. I drop the proposal to impose penalty upon Shri Sumer Chand Verma (Noticee-3), under the provisions of Section 114AA of the Customs Act, 1962. i. I drop the proposal to impose penalty upon Shri Ajit Singh (Noticee-4), under the provisions of Section 114AA of the Customs Act, 1962. 2.4. Aggrieved against the confirmation of ....
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....nt No.2, Father of Shri Vikas Verma Proprietor of M/s V. V. Impex submits that he supervises the melting process of Gold and Silver during manufacturing of the jewellery in the unit. He also monitors the quality of the finished products. His son Shri Viaks Verma is the Proprietor of V.V. Impex and is also a Technician of Chain Making Machines. During the incident of theft, Shri Vikas Verma was in Dubai. Visa of Shri Vikas Verma expired, so he could not return immediately. Shri Ajit Singh was regulating the overall business of V.V. Impex. On 28.06.2021 Shri Mohan, Labour Supervisor in M/s V.V. Impex informed him on phone that Shri Ajit Singh has come to the unit and took away all the raw materials and finished goods available in the unit. He has also taken some records alongwith him. Accordingly, he directed Shri Kapil Chadha to lodge an FIR against Shri Ajit Singh in the local Police Station. Subsequently, during the investigation, the Police recovered approximately 20Kgs Silver/Silver jewellery from Shri Ajit Singh and all the goods were in the custody of Police. He submits that Shri Ajit Singh was a close friend of his son and he trusted him and entrusted him the overall supervis....
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....ce of any physical verification, identification, purity test or comparison with the stock records, the Department's allegation remains a mere presumption. Further, there is no recovery whatsoever of the alleged shortage of 12,000 grams of gold from the Appellant No.3. In fact, Mr. Mohan, who is the only witness alleged to have witnessed the incident, categorically stated that he had neither handed over any gold to the Appellant nor seen the Appellant taking away any gold. Thus, Appellant No.3 submits that the statements relied upon by the Department became wholly inadmissible and devoid of evidentiary value, once the witnesses failed to appear for cross-examination 5.1. The Appellant No.3 submits that the Cross-examination is not an empty formality. It is the only recognized method by which the veracity, credibility and truthfulness of a witness can be tested. Unless a witness enters the witness box and subjects himself to cross-examination, the statement recorded behind the back of the noticee remains an untested assertion and cannot be treated as substantive evidence. It is submitted that Section 138B of the Customs Act, 1962 specifically governs the admissibility of state....
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.... following judgements:- * Rama Shyama Papers Ltd. v. Commissioner of C. Ex., 2004 SCC OnLine CESTAT 3636 * Karan Traders v. Joint Commissioner of Central Excise, 2016 SCC OnLine Mad 11036 * CCE v. Parmarth Iron (P) Ltd., (2011) 7 GSTR 305 * Ruby Overseas v. Commr. of Customs, 2025 SCC OnLine CESTAT 3546 6.1. Accordingly, Shri Vikas Verma submits that no separate penalty is imposable on the proprietor. 7. Learned Authorized Representative for the Revenue submits that during the course of stock verification conducted by the Officers, it was noticed that there was a shortage of 12 Kg Gold and 46222.748 grams of Silver (.999). As the Appellant could not explain the reasons for the shortage, they are liable to pay Customs duty on the goods found short. Even though the Appellant Company has paid the Customs Duty on the goods found short, they cannot be absolved from the offence committed. Thus, the learned Authorized Representative justified the penalties imposed on the Appellants herein. 8. Heard both the sides and perused the appeal documents. 9. We find that the present issue involved is relating to shortage of 46222.748 gm of Silver and....
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.... cross-examination of all the persons whose statements have been relied upon. Learned Adjudicating Authority also allowed the cross-examination, however, none of the persons appeared before the Adjudicating Authority for cross-examination. Thus, we find that the Adjudicating Authority could not verify the correctness of the statements given by the said persons during the course of adjudication. As per Section 138B of the Customs Act, it is mandatory that the Adjudicating Authority must conduct examination-in-chief of the persons who have given the statements which are relied upon. In the present case, we find that cross-examination has been offered by the Adjudicating Authority. However, the provisions of Section 138B of the Customs Act could not be complied with, as the witnesses have not turned up for cross-examination. Thus, we find that the statements given by the above persons are not corroborated by any evidence. Thus, we observe that the provisions of Section 138B have not been complied with and hence the statements recorded during the course of investigation cannot be relied upon to implicate the Appellant Shri Ajit Singh in the alleged offence. 9.3. Other than the state....