Customs Act | Penalty U/S 112 Cannot be Imposed Solely On Co-Accused's Statement Without Corroborative Evidence: CESTAT Kolkata

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that a mere allegation by a co-accused that the assessee handed over gold cannot serve as the sole basis for imposing a penalty under Section 112 of the Customs Act. The bench clarified that in the absence of any independent corroborative evidence supporting this claim, the statement of the co-accused is not sufficient to implicate the assessee in the said offence. Section 112 of India's Customs Act, 1962, imposes penalties for improper importation or dealing with goods liable to confiscation, covering those who perform or abet wrongful acts, or possess/deal with such goods knowing their status. R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) opined that in the absence of any independent corroboration, such an exculpatory statement of the co-accused cannot be the sole basis for implicating the assessee in the alleged offence and imposition of penalty on him. In the case at hand, one Ratan Biswas was apprehended by DRI, Kolkata, at the Railway Station and recovered 33 pieces of foreign-marked Gold Biscuits from his possession. Accordingly, he was apprehended on the reasonable belief that he was transporting the said gold pieces without any valid documents for the licit purchase of the same. During the course of interrogation, Shri. Ratan Biswas, in his statement, named the assessee/appellant, i.e. Shir Dharanidhar Ghosh, as the person who handed him over the said Gold Biscuits for delivery. A show-cause notice was issued to Shri. Ratan Biswas is proposing the confiscation of the said 33 pieces of gold, along with the proposal for the imposition of a penalty on him. In the said Notice, the assessee was also implicated as a co-noticee on the allegation that he had connived with apprehended Ratan Biswas and knowingly/consciously involved himself in smuggling of foreign origin gold, for which a penalty was proposed to be imposed upon him under Section 112(a) & 112(b) of the Customs Act, 1962. The Commissioner of Customs (Prev.) passed the Adjudication Order imposing a penalty of Rs. 50 lakhs upon the assessee under Section 112(b) of the Customs Act, 1962. The assessee argued that the entire basis of imposition of penalty upon the assessee is the confessional statement of the co-accused/co-noticee Ratan Biswas, which was confirmed during cross-examination. Apart from the statement of the co-accused, there is no other evidence brought on-record to implicate the assessee in the case. The Tribunal agreed with the assessee that the only evidence implicating the assessee in the alleged offence of smuggling of gold pieces is the statement of the co-accused Ratan Biswas. Such a statement is exculpatory in nature, and it is an attempt on the part of the said apprehended person/co-accused to shrug off his responsibilities with respect to the Gold Biscuits recovered from his possession. The Tribunal observed that Shri. Ratan Biswas has named the assessee as the person who handed him over the said Gold Biscuits for delivery to one Sourav. But, the Investigation has not found out Shri Sourav, who was said to be the receiver of the gold as per the statement of Shri. Ratan Biswas. Thus, the investigation has not substantiated the statement of the co-accused Shri. Ratan Biswas with any corroborative evidence. The bench opined that a mere exculpatory statement of the co-accused about the handing over of the gold by the assessee cannot be the basis for implicating the assessee in the alleged offence and imposing a penalty on him under Section 112(b) of the Customs Act, 1962, in the absence of any other corroborative evidence. In view of the above, the Tribunal allowed the appeal. Case Title: Shri Dharanidhar Ghosh v. Commissioner of Customs (Preventive) Case Number: Customs Appeal No. 75242 of 2022 Counsel for Appellant/ Assessee: Arijit Chakraborty and Nilotpal Chowdhury Counsel for Respondent/ Department: A.K. Choudhary Click Here To Read/Download Order

Customs Act | Penalty U/S 112 Cannot be Imposed Solely On Co-Accused's Statement Without Corroborative Evidence: CESTAT Kolkata

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Customs Act | Penalty U/S 112 Cannot be Imposed Solely On Co-Accused's Statement Without Corroborative Evidence: CESTAT Kolkata

Mehak Dhiman

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