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2023 (2) TMI 620 - CESTAT KOLKATASmuggling - Gold - recovery of contraband - cross-examination of statements - burden to prove - Appellants denied recovery of any gold from their possession and demanded cross-examination of the panch witnesses - failure to comply with the provision of Section 155(2) of Customs Act, 1962 - entire case of Revenue is based upon the allegation of recovery of gold from Shri Amit Ghosh and Shri Ajay Kumar Gond and the statements all dated 07.03.2017 of the first three Appellants - levy of penalty u/s 112 (a) and (b) of Customs Act, 1962. HELD THAT:- The burden is on Revenue to establish the voluntary nature of the statements all dated 07.03.2017 recorded from the first three Appellants in the present case. The Revenue has failed to adduce any evidence to that effect. On the contrary, the facts and circumstance, including the fact of prolonged detention of the Appellants at the office of DRI prior to their first production before the Ld. Magistrate and non-recording of any subsequent statement of the Appellants in spite of having ample opportunities, establishes the non-voluntary nature of said initial statements all dated 07.03.2017 of the said Appellants. Hence, the said initial statements cannot be basis of any penal consequence in the present case. Though Section 138B of Customs Act, 1962 provides for examination of the makers of any statement, the Adjudicating authority did not exercise such power with respect to the first three Appellants herein before taking cognizance of such initial statements which were retracted before the Ld. Magistrate. Moreover, from the impugned Order-in-Original it would be evident that in course of adjudication, the fact of retraction was also duly brought before the Adjudicating authority by the Ld. Advocate appearing for the Appellants, but the Ld. Adjudicating authority simply ignored the same while arriving at his findings with respect to the statements dated 07.03.2017 of the Appellants and proceeded on the basis of such statements as being voluntary in nature and has mis-directed himself by arriving at a finding at para 4.17(xii) of Order-in-Original that the retraction was in reply to Show Cause Notice and hence, such finding is not maintainable in law. As such, the position of law is no more res integra that the retracted statements cannot be the sole basis of penalty under Section 112 of Customs Act, 1962. In the present case, if the said initial statements all dated 07.03.2017 of the first three Appellants, which were retracted on 14.03.2017 before the Ld. Magistrate, are taken out of record, there would be nothing to implicate the Appellants herein as liable for any penal action under Section 112 of the Act. In such circumstance, imposition of penalties upon the Appellants on the basis of such retracted statements, all dated 07.03.2017, is liable to be quashed. Opportunity of cross examination of the panch witnesses - HELD THAT:- When the Appellants denies the allegation of recovery of gold from their possession, it was incumbent upon the Revenue to produce the Panch witnesses for cross-examination to unearth the facts before the Adjudicating authority. In other words, it was for the Revenue to establish the fact of recovery of contraband from the possession of the two of the Appellants herein upon cogent evidence, which they have failed to do more particularly when the place of interception and search-seizure was admittedly different in the present case. Having not done so, the Revenue cannot derive any adverse conclusion against the Appellants on the basis of the alleged recovery. In the present case, it is the claim of the Revenue that the contrabands were recovered from the two of the Appellants and the initial statements of first three Appellants were voluntary in nature. In such circumstance, the burden of proof in this regard was on the Revenue, which they failed to discharge on both account. The argument that since ‘gold’ is notified under Section 123 of Customs Act, 1962, the burden of proof will be on the noticee/ Appellants, cannot be appreciated since Section 123 ibid provides for ‘burden of proof’ with respect to legal procurement and possession of ‘gold’ by it’s owner and it nowhere provides that the ‘burden of proof’ w.r.t. non-voluntary nature of statement and/or non-recovery of contraband from the possession, is on the noticee/ appellants. Levy of Penalty u/s 112(a) and (b) - HELD THAT:- The imposition of penalty upon the fourth Appellant under Section 112(a) & (b) of the Customs Act, 1962 on the basis of retracted initial statements all dated 07.03.2017 of the first three Appellants herein, is also perverse in nature inasmuch as apart from such retracted statements of the co-accused, there is nothing on-record to implicate the fourth accused in the alleged act of smuggling of the seized gold. Hence, in absence of any independent corroborative evidence against the fourth Appellant, penalty upon him is not imposable. Further, single penalty under both the clauses (a) & (b) of Section 112 of Customs Act, 1962, is erroneous in law in as much as both such clauses operates at separate domain altogether - the imposition of single penalty upon the fourth Appellant i.e. Akash Jagdish Issrani by the Adjudicating authority under both clauses (a) and (b) supports the contention on behalf of the said Appellant that the Adjudicating authority was not sure about the alleged role of the said Appellant in the alleged act in want of specific allegations against him in the Show Cause Notice, but mechanically imposed the penalty on him. Such imposition of penalty is liable to be quashed. Appeal allowed.
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