2019 (7) TMI 341 - AT - Customs

Smuggling - Gold - likely to smuggle gold by way of concealment on person without declaring the same to the Customs authorities and without payment of duty - retraction of statements - HELD THAT - As per the Mahazar and the Statements of the appellants they have confessed their guilty. As far as their retraction by executing sworn affidavits dt. 27/10/2015 this affidavit has not been filed before the lower authorities including the Commissioner(Appeals). Further the alleged affidavit and statements record on 07/01/2016 wherein also the appellants did not state that they retract their statements recorded on 15/10/2015. The appellants have confessed their guilty by specifically confessing the same in their statement and the Mahazar proceedings both dt. 15/102015 . Further the allegation of the appellant that there is a violation of Section 110(2) as the notice of seizure has not been given to the appellants within the period of six months as stipulated in the said provisions. There is no infirmity in the impugned order as far as absolute confiscation of the goods are concerned and there is no violation of the provisions of Section 110(2) read with Section 153 of the Customs Act. Imposition of penalty of Rs. 8 lakhs under Section 112 - HELD THAT - The imposition of penalty of Rs. 8 lakhs is on the higher side and therefore the penalty reduced to Rs. 1 lakh on each of the appellant. Imposition of penalty under Section 114AA of the Customs Act 1962 - HELD THAT - The penalty under Section 114AA can only be imposed if the person knowingly or intentionally makes signs or uses or causes to be made signed or used any declaration statement or document which is false or incorrect in any material particular - in the present case the appellants have not made intentionally any false sign or declaration incorrect statements or declarations to attract penalty under Section 114AA of the Act. Appeal allowed in part.

Summary

Issues Involved:
1. Validity of the retracted statements.
2. Compliance with the six-month notice period under Section 110(2) of the Customs Act.
3. Appropriateness of penalties imposed under Sections 112(a) and 114AA of the Customs Act.

Issue-wise Detailed Analysis:

1. Validity of the retracted statements:
The appellants argued that their statements recorded on 15/10/2015 were retracted via sworn affidavits on 27/10/2015, claiming they were unaware of the document contents when signing. They contended that retracted statements require corroboration by independent evidence, citing multiple judicial precedents. However, the Tribunal found that the affidavits were not presented before the lower authorities and that subsequent statements on 07/01/2016 did not reference the retraction. Therefore, the Tribunal upheld the original statements and the Mahazar proceedings, concluding that the appellants had confessed their guilt.

2. Compliance with the six-month notice period under Section 110(2) of the Customs Act:
The appellants claimed the show-cause notice was received beyond the six-month period from the date of seizure, making the confiscation void. They argued that the notice must be "given" within six months, meaning actually received. The Tribunal, however, referred to the jurisdictional High Courts of Karnataka and Kerala, which held that dispatching the notice by registered post within the six-month period constitutes compliance. The Tribunal noted that the notice was dispatched within the stipulated period, thus adhering to the requirements of Section 110(2) read with Section 153 of the Customs Act.

3. Appropriateness of penalties imposed under Sections 112(a) and 114AA of the Customs Act:
The Tribunal found the penalty of Rs. 8 lakhs under Section 112(a) to be excessive and reduced it to Rs. 1 lakh for each appellant. Regarding the penalty under Section 114AA, the Tribunal determined that the appellants did not intentionally make false declarations or statements. Therefore, the penalty under Section 114AA was set aside.

Conclusion:
The appeals were partly allowed. The confiscation of the gold bars was upheld. The penalty under Section 112(a) was reduced to Rs. 1 lakh for each appellant, and the penalty under Section 114AA was dropped.