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2022 (1) TMI 957 - AT - CustomsLevy of penalty u/s 112 of Customs Act, 1962 - diversion of nonmagnetic stainless steel/coil, imported without payment of duties of customs against 25 advance licences - duty exemption entitlement certificate (DEEC) scheme - entire case against Mr Lalit Mange revolves around the statement of Mr Mohan Shah of Chanakya Impex - relevant evidences or not - HELD THAT:- From the statement of the transport operators narrated in the impugned order, it would appear that payments were made to the transporters by the appellant-Director and with instructions to proceed to the weighbridge beyond which the actual place of delivery was known only to the drivers of the trucks who remained untraceable. It cannot be considered beyond the normal course of a commercial transaction to have the goods weighed upon clearance from customs control and the participation of the appellant- Director in such undertaking does not suffice to establish any role in the further movement thereafter. The proceedings themselves comprised two parts: the goods which were found at the premises of the original ‘high-sea sellers’ and imports of goods valued at ₹9,50,30,917.43 against 25 advance licence effected prior to the searches. As far as the previous consignments are concerned, and from the narration of the transactions pertaining to the seized goods, it would appear that the culpability of the appellant-Director stands solely upon the statement of Mr Mohan Shah, the principal noticee in the proceedings. Being a co-noticee, and even if sought to be cross examined, permitting such confrontation during adjudication would have been legally improper. It would have been more appropriate for these statements of Mr Mohan Shah to have been used for confronting the appellant-Director when he was subject to interrogation under section 108 of Customs Act 1962. There is no evidence of that; nor is there any record of such ascertainment having taken place. Accordingly, the statements of Mr Mohan Shah fails the test of relevancy prescribed in section 138B of Customs Act, 1962. In the decision of the Hon’ble High Court of Delhi in S.N. OJHA VERSUS COMMISSIONER OF CUSTOMS [2015 (11) TMI 312 - DELHI HIGH COURT], the statements were used in support of other evidence that were available as corroboration. In both of these judgments, the principle laid down is that the statement of co-accused cannot be discarded merely because of coverage by common proceedings; it is abundantly clear that the statements were supplementary to the material evidence that were available against the parties concerned. In the present proceedings, admittedly, there is no material evidence that the said statement can claim to support. In the light of the inadequacy of the statements for establishing the complicity of the appellant-Director in the alleged diversion, the penalty imposed under section 112 is liable to set aside - Appeal allowed - decided in favor of appellant.
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