Custom, Excise & Service Tax Tribunal
V. Sankaran vs Commissioner Of Customs, Tuticorin on 11 February, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No. C/384/2005
(Arising out of Order-in-Original No. 26/2005 dated 3.5.2005 passed by the Commissioner of Customs, Tuticorin)
For approval and signature:
Honble Mr. P. G. Chacko, Member (Judicial)
1. Whether Press Reporters may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether the Member wishes to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
V. Sankaran Appellant
Vs.
Commissioner of Customs, Tuticorin Respondent
Appearance None for the Appellant Dr. Nitish Birdi, SDR, for the Respondent CORAM Honble Mr. P. G. Chacko, Member (J) Date of Hearing: 11.02.2008 Date of Decision: 11.02.2008 Final Order No. ____________ This appeal is against a penalty of Rs.5.00 lakhs imposed on the appellant under Section 112 of the Customs Act. There is no representation for the appellant despite notice, nor any request of his for adjournment. I have examined the records and heard learned SDR.
2. The appellant was engaged in trading DEPB licences. His modus operandi was to canvas buyers by showing them xerox copies of such licences obtained from vendors. The original licence was eventually delivered to the buyer. In the present case, M/s. DCW acted upon such licence purchased from the appellant, and obtained duty-free clearance of the goods covered thereunder. The department, later on, found that the licence was fake and accordingly a case was booked against the importer and other persons including the appellant. As part of the investigations, statements were recorded from the importer and others including the appellant and one Shri Chandran from whom the appellant had purchased the relevant licence. Shri Chandran in his statement stated inter alia that the appellant was aware of the fake nature of the licence. This statement was recorded while he was in prison. Once out of the prison he retracted the statement. The appellant, in his statement, referred to the original statement of Shri Chandran and stated that it was a lie. The show-cause notice issued by the department proposed penalties on the importer and other persons under Section 112 of the Act. Insofar as the appellant and others involved in the trading activity were concerned, it was alleged that they had knowingly indulged in the transfer/sale of DEPB licence or had acted as brokers for the sale of fake DEPB licence. The adjudicating authority found the appellant and others to be abettors of the importers offence of having availed duty exemption on the basis of fake licence. Hence the above penalty on the appellant.
3. Learned Commissioner imposed the above penalty, having found that the appellant had abetted the offence of M/s. DCW. In this appeal, it is contended that, as the statement of Shri Chandran was taken while he was in custody, it could not be relied on for arriving at the finding that the appellant had knowledge of the fake nature of the licence and had abetted the offence of the importer. It is submitted that Shri Chandran had retracted his earlier statement on the ground that it had been obtained by coercion and, in such circumstance, the original statement of Shri Chandran was not admissible in evidence. Learned SDR has submitted that the facts alleged in the show-cause notice constitute the offence of abetment against the appellant and others who indulged in trading DEPB licences.
4. After giving careful consideration to the grounds of the appeal and to the submissions made by SDR, I find that it is not in dispute that the appellant had purchased the DEPB scrips in question from Shri B. Chandran and supplied the same to M/s. DCW. Admittedly, he also supplied TRAs to the importers. Again, it is not in dispute that these DEPB scrips and TRAs were fake. According to the original statement of Shri Chandran, the appellant knew at the beginning itself that the DEPB scrips and TRAs were fake. Though Shri Chandran retracted his statement it would still be admissible in evidence inasmuch as the retraction is too belated to be accepted. The appellant has not adduced evidence of any coercion having been used by the Customs authorities for obtaining the original statement of Shri Chandran. Hence the finding of fact that the appellant had, with knowledge of the fake nature of the DEPB scrips/TRAs, caused the same to be used by M/s. DCW for duty-free import of goods is well founded. The documents obtained by M/s. DCW from the appellant and produced before the Customs authorities for clearance of the goods was not issued from the office of the Director-General of Foreign Trade (DGFT). These were fake documents and this fact was known to the appellant. Where the fake nature of these documents was within the knowledge of the appellant, it goes without saying that the confiscability of the dutiable goods cleared duty-free under the DEPB scheme was also within his knowledge. In other words, the appellant abetted the importers offence of having rendered the goods liable for confiscation under Section 111 of the Customs Act and consequently he rendered himself liable for penalty under Section 112(a) of the Act.
5. The Commissioner imposed a penalty of Rs.5.00 lakhs on the appellant, which, in my view, is harsh. In the facts and circumstances of the case, I reduce the quantum of penalty to Rs.3,00,000/- (Rupees three lakhs only). In the result, insofar as the appellant is concerned, the Commissioners decision is sustained and this appeal is dismissed, but with reduction of penalty as above.
(Operative portion of the order was pronounced
in open court on 11.2.2008)
(P.G. CHACKO) Member (J)
Rex
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