Karnataka High Court
Shri. Rajendra Prakash Pawar vs The Commissioner Of Customs on 11 March, 2020
Bench: Aravind Kumar, Hemant Chandangoudar
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 11TH DAY OF MARCH, 2020
PRESENT
THE HON'BLE MR. JUSTICE ARAVIND KUMAR
AND
THE HON'BLE MR. JUSTICE HEMANT CHANDANGOUDAR
CSTA NO.2/2020
BETWEEN:
SHRI. RAJENDRA PRAKASH PAWAR
S/O PRAKASH KISHAN PAWAR
AGED ABOUT 35 YEARS
FLAT NO.1003, VENKATARAMANNA
TOWERS, BHAVATHI/CAR STREET
MANGALURU - 575 001.
...APPELLANT
(BY SRI. DAKSHINA MURTHY R, ADVOCATE)
AND:
THE COMMISSIONER OF CUSTOMS
NEW CUSTOMS HOUSE
PANAMBUR, MANGALORE - 575 010.
...RESPONDENT
(BY SRI. K.V. ARAVIND, ADVOCATE)
THIS APPEAL IS FILED UNDER SECTION 130 OF THE
CUSTOMS ACT, PRAYING TO FORMULATE THE
SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE AND
ALLOW THE APPEAL AND SET ASIDE THE FINAL ORDER OF
THE TRIBUNAL BEARING NO.20619/2019
DATED:06.08.2019 IN APPEAL NO.C/21518/2018-SM IN
ANNEXURE-K.
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THIS APPEAL COMING ON FOR ADMISSION THIS
DAY, ARAVIND KUMAR J, DELIVERED THE FOLLOWING :
JUDGMENT
Heard Sri. Dakshina Murthy R, learned counsel appearing for appellant and Sri. K.V.Aravind, learned standing counsel appearing for respondent. Perused the records.
2. Based on specific intelligence input received by Directorate of Revenue Intelligence, Mangalore (for short 'DRI') that gold was being smuggled by one Sri. Abdul Khader an Indian citizen traveling from Dubai to Mumbai and had concealed contraband gold under his seat No.12A and two employees of Spicejet namely, Sri.Mohammad Anif and Sri. Odiyanda Ayyappa Muddaiah. DRI Officers had assisted after having identified the said employees had retrieved the gold hidden in the seat which was concealed in 2 deftly concealed packets inside the backrest cushion of said seat on disembarkment of all the passengers and said package came to be seized under panchas. Proceedings 3 came to be initiated against them and investigation was commenced. During the course of investigation statements of said two (2) persons under Section 108 of Customs Act which revealed that smuggled gold belonged to one Sri. Raju @ Raju Bhai of Mangalore, who is basically from Maharashtra and doing business in Mangalore and he is having a shop at Car Street, Mangalore and they also revealed the mobile number of Raju @ Raju Bhai. On further enquiry from service provider-Airtel, who provided user address and on visiting said address investigation revealed that appellant herein was owning the shop between 2002 to 2009 and had set-up a new firm under different name. Statement of appellant under Section 108 of Customs Act was recorded. Appellant was arrested on 26.07.2016 and later released on bail. Further it resulted in issuance of show cause notice dated 26.12.2016 and culminating in imposing penalty of Rs.22,57,868/- under Section 112(a) of the Customs Act, 1962 (Annexure-C) by the Additional Director, DRI, Bangalore.
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3. A reply had been submitted by the appellant on 03.02.2017 to said show cause notice contending that he was not involved in any smuggling activity and statements were obtained by the DRI Officer under threat. Pursuant to same, Additional Commissioner of Customs vide O-I-O No.17/2017 ADC dated 04.08.2017 ordered confiscation of seized gold and imposed a penalty of Rs.22,57,868/- under Section 112(a) of the Customs Act, 1962 (Annexure-E).
4. Being aggrieved by the said order, an appeal came to be filed before the Commissioner of Customs (Appeals) contesting the levy of penalty and after affording an opportunity to the appellant herein order dated 28.05.2018 came to be passed by appellate authority dismissing the appeal by upholding the order in original passed by the Additional Commissioner of Customs. Further appeal to the CESTAT did not yield any fruitful result to the appellant and second appeal also came to be dismissed vide Final Order 5 No.20619/2019 dated 06.08.2019. Hence, this appeal contending interalia that based on the statements of co- employees penalty has been levied and as such statements recorded under the Customs Act could not have been relied upon for passing the impugned order in original and the entire procedure adopted by the original authority is erroneous.
5. Sri. Dakshina Murthy, learned counsel appearing for the appellant has reiterated the grounds urged in this appeal and he would also hasten to add that order in original has been passed by an authority, which is not competent to pass such order under Section 120A of the Customs Act, 1962 and as such said order which has since received the confirmation by the appellate authority, is liable to be set aside by formulating the substantial question of law as formulated in appeal memorandum and answering the same in favour of appellant.
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6. Per contra, Sri. K.V.Aravind, learned counsel appearing for respondent would support the impugned orders and would contend that order in original which has been passed by the Additional Commissioner is just and proper and he being the competent authority to pass such an order, no infirmity can be found in the impugned order and he would contend there is no question of law involved in this appeal for being formulated, adjudicated and answered. Hence, he prays for dismissal of the appeal.
7. Having heard the learned Advocates appearing for parties, we notice that issue relating to the authority which has passed the order in original dated 04.08.2017 is Additional Commissioner of Customs. Section 122 of the Customs Act, 1962 under which said order has been passed reads:
"122. Adjudication of confiscation and penalties In every case under this Chapter in which anything is liable to confiscation or any person is liable to a penalty, such confiscation or penalty may be adjudged.--7
(a) without limit, by a [Principal Commissioner of Customs or Commissioner of Customs] or a [Joint Commissioner of Customs];
(b) where the value of the goods liable to confiscation does not exceed [five lakh] rupees, by an [Assistant Commissioner of Customs or Deputy Commissioner of Customs];
(c) where the value of the goods liable to confiscation does not exceed [fifty thousand] rupees, by a Gazetted Officer of Customs lower in rank than an Assistant Commissioner of Customs."
8. A plain reading of above provision would indicate that in every case under the said Chapter i.e., Chapter XIV under which anything is liable to be confiscated or any person is liable to be imposed with the penalty has to be adjudicated under Clause (a) of Section 122 of the Act by the Principal Commissioner of Customs or Commissioner of Customs or a Joint Commissioner of Customs without limit. Under Clause (b) the penalty has to be adjudicated by the Assistant Commissioner of Customs or Deputy Commissioner of Customs where the value of goods came to be confiscated does not exceed 8 Rs.5 Lakhs and under Clause (c) same shall be adjudicated by a Gazetted Officer of Customs lower in rank than an Assistant Commissioner of Customs where the value of the goods confiscated would not exceed Rs.50,000/-. Undisputedly, in the instant case, value of goods was more than Rs.5 lakhs and as per the appraisal value, who had appraised the gold bar so confiscated and had certified the weight at 2566.05 grams of 24 carot gold of foreign origin he had valued at Rs.77,87,962/-. Before levy of penalty show cause notice came to be issued by Additional Commissioner of Customs proposing to levy penalty on appellant.
9. Additional Commissioner of Customs adjudicated said show cause notice and by order dated 04.08.2017 ordered for confiscation of contraband gold so seized and levied penalty as indicated herein above. Section 2(8) of Act defines the Principal Commissioner of Customs or Commissioner of Customs to include the Additional Commissioner of Customs for the purposes of the Act except for the purposes of Chapter XV. In other 9 words, wherever the words "Principal Commissioner of Customs" or "Commissioner of Customs" occurs in any Chapter under the Act other than Chapter XIV it would mean and include Additional Commissioner of Customs also. In the instant case, order under Section 122 having been passed by the Additional Commissioner of Customs under Chapter XIV, said authority would fall within the definition of Section 2(8) and as such order passed by the Additional Commissioner of Customs cannot be faulted or in other words, contentions raised by Sri.Dakshina Murthy, learned counsel appearing for appellant cannot be accepted and it stands rejected.
10. Insofar as, merits of the case is concerned, it would clearly emerge from the orders of the original authority as affirmed by the appellate authority the statement of appellant recorded under Section 108 of the Customs Act penalty under Section 112(a) came to be imposed. In fact, whatsapp messages exchanged between the noticees including the appellant herein, which formed part and parcel of the show cause notice 10 and adjudication order, it came to be held that appellant herein has admitted in his statement furnished under Section 108 of the Customs Act and his role in the act of smuggling of gold or in other words, appellant has admitted his guilt, which statement so tendered by him was before the custom officers, who is not a police officer. A statement of an accused under Section 108 when recorded by a Customs Officer the safeguards provided under Section 164 Cr.P.C. is not required to be followed. It is in this background, original authority as well as appellate authority have examined the statement.
11. In fact, appellant has not retracted his retrospective statement and it has never been contended by the appellant that statement has been obtained from him under threat or duress or coercion. It is only after show cause notice was issued proposing to levy penalty, appellant has tried to retrace his steps and not before the said date. It is for this reason appellate tribunal has recorded the following finding:
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"6.1 Further, the contention of the learned counsel for the appellant saying that the appellants were not subjected to cross-examination is not tenable in law because the appellants never retracted their statements at any point of time and in their original statements made before the Customs Officer under Section 108, they have clearly admitted their involvement in smuggling activity on payment of remuneration. The versions of the appellants given before the Customs Officer were also proved from their WhatsApp communication."
12. In the light of aforesaid discussion, we are of the considered view there is no substantial question of law involved in this appeal for being admitted, adjudicated and answered. Hence, we proceed to pass the following:
JUDGMENT
(i) Appeal is dismissed.
(ii) Order dated 06.08.2019 passed by CESTAT in Final Order No.20619/2019 stands affirmed.
(iii) No order as to costs.
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In view of appeal having been dismissed,
I.A.No.1/2020 for stay does not survive for consideration and it stands dismissed.
Sd/-
JUDGE Sd/-
JUDGE DR