TMI Blog2019 (3) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... nor Abdul Basheer, who were apprehended in this connection, could give any whereabouts of Shafeeq or Navas, and therefore, without identifying those persons who have admittedly contacted the passenger Altaf or Manoj, it would not have been possible to connect the appellant to the alleged act of smuggling. The appellant had produced documentary proof of the fact that the telephone number spoken to by the witnesses as his, belonged to someone else. But the authority had concluded that the mobile number belongs to him relying solely upon the statements of Basheer and Shamsudhin. Going through the entire Annexure H order of the Adjudicating Authority, we do not find anything concrete to rope the appellant in the alleged smuggling of gold, but for the recorded statements of persons, who were directly involved. The Adjudicating Authority here has relied on the statements recorded under Section 108 without affording an opportunity to the appellant to cross-examine them. In the reply to the show cause notice filed by the appellant, he has specifically requested for the witnesses to be cross-examined, and therefore, the Adjudicating Authority was bound to follow the mandatory procedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as to why penalty should not be imposed on him under Section 112(a) and (b) of the Act. 3. According to the Department, the Superintendent of Customs, Customs Preventive Division, Kozhikode and his party intercepted a car bearing No.KL-60-F-6363 with four persons inside it, at the car parking area of the Calicut International Airport at about 2.45 AM on 06.02.2014. One Altaf travelling from abroad arrived with his baggage, while others, namely Kaleemullah T.A., Abdul Basheer and Mahmood T.M. were waiting in the car. On being questioned, Altaf admitted having brought gold biscuits in two black cloth pouches, which on alighting from the aircraft, were handed over to Manoj P., a Senior Security Agent of Air India. Thereafter, the officers intercepted Manoj, while he was exiting the Airport Terminal. On being questioned, he took the package containing contraband gold from his pocket and handed it over to the Superintendent. All the four persons found in the car together with Manoj were taken into custody and subjected to search, which did not reveal anything further. 4. The persons were summoned by the Superintendent of Customs and their statements were recorded under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anything about the smuggling. 8. The Managing Partner of Aramana Jewellery, namely one Mahmood A.S., was also questioned under Section 108 and in his statement, he admitted having acquaintance with Shamsudhin and also admitted that the daughter of Shamsudhin and the wife of the appellant were partners in the Jewellery. The appellant was also distantly related to him. Abdul Basheer too was known to him. Apart from Jaseela and Haseena, there was another partner in Aramana Jewellery, namely, Haneef Armana. 9. According to the appellant, the version of the Department is totally unreliable. The statements of witnesses recorded were contradicting each other, and investigation was not conducted further by questioning Abdul Basheer and Shamsudhin. The allegation of the Department was that Abdul Basheer had made some calls to the appellant's Dubai phone number and thus concluded that the gold was received by Abdul Basheer, at the behest of the appellant. The appellant distances himself from the alleged smuggling stating that he was a businessman in Dubai, staying there with his family and rarely visited India. The telephone number 0559271137 allegedly belonging to the appellant as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant. The allegation is that, the appellant had arranged to smuggle 24 gold biscuits weighing 2.8 kgs, through Altaf, a carrier. The Adjudicating Authority had vide Annexure H order found the appellant guilty of having violated Sections 112(a) and (b) of the Act, resulting in imposing of a penalty of ₹ 8 lakhs. The finding of the Authority is based mainly on the statement of Altaf, the carrier of contraband gold, Manoj, who collected it and got it safely out of the Airport, to be entrusted to Abdul Basheer, for being ultimately handed over to Shamsudhin, who on receipt of the gold, had to make payment to Abdul Basheer and Manoj. Altaf and Manoj did not spoke of the appellant. 13. The statements given under Section 108 of the Act by these witnesses have been retracted. The allegation against the appellant is that he is the one who had arranged the smuggled gold from Dubai. He has been residing there for the past 17 years with his family. It is alleged that he was transacting with Abdul Basheer and had made arrangements to sent the photographs of the carrier to Manoj, who was to receive the contraband on identifying Altaf and bring the smuggled gold outside the Airpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with the contraband, who gave statement under Section 108 of the Act, does not know Shamsudhin, who had contact only with Abdul Basheer and one Navas of Dubai. The photographs of the carriers used to be sent to him by Navas, who too is neither traced or identified. He had, allegedly got similar consignments of gold from passengers on four previous occasion. 16. Manoj, Altaf and Abdul Basheer were arrested under Section 104 of the Act and produced before the Additional CJM (EO), Ernakulam and remanded to judicial custody. All the three of them were subsequently granted bail. Follow up searches were made in two jewelries, one belonging to Shamsudhin, who used to receive the smuggled gold from Basheer, and another was one Aramana Jewellery in which wife of the appellant was alleged to be a partner. The gold and cash were also seized from both the jewelleries. Searches of the residences of Altaf and one Mahmood T.M., who was the Manager of the Aramana Jewellery, did not yield any result. 17. The appellant has produced documents to show that the mobile number, which is stated to be his and used for communication with Basheer and Shamsudhin, actually does not belong to him, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im, does not actually belong to him. The appellant had also requested that he be given an opportunity to cross-examine the witnesses, who have given the statements under Section 108 and intended to be relied upon for proceeding against him, but was never given that opportunity. 20. Our attention is drawn to Section 138B(2) of the Act. Apart from Annexure E reply, the appellant had also submitted Annexure F argument notes before the Commissioner of Customs, in which all the contentions mentioned above have been detailed. That apart, the documents pertaining to ownership of the offending mobile number is also produced by the appellant before the Commissioner. The findings of the Commissioner is solely based on the statements given by Abdul Basheer, Manoj and Altaf, who were directly involved with the smuggling, and from whom the seizure of the contraband was effected. Shamsudhin, was referred to as the recipient of the gold at Kasaragod. The finding of the Commissioner in paragraph 36(g) pertaining to the appellant is that he along with his aids Navas and Shafeeq in Dubai arranged smuggling of gold through Karipur Airport, through Abdul Basheer and that he has organised the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct such statements could not have been used in any proceedings under the Act without the person who made the statement being examined as a witness, so long as the maker of the statement is available. Insofar as this case is concerned even the department has no case that the makers of the statements, who are very much available, were examined. If that be so, these statements could not have been relied on. 23. In Andaman Timber Industries v. Commissioner of Central Excise, Kolkotta, (2016) 15 SCC 785 , the Hon'ble Supreme Court has held that the Adjudicating Authority in its discretion shall permit examination of witnesses and in that case the appellant therein had challenged the finding of the Adjudicating Authority for the reason that he was not allowed to examine the dealers whose statements were recorded, relied on by the Adjudicating Authority in the order, and held thus: 6. According to us, not allowing the assessee to cross-examine the witnesses by the adjudicating authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be granted to cross-examine the witnesses even at an earlier stage to ensure that eventually the proceedings are set aside, only for reason of cross-examination having been declined. 26. In view of the aforementioned precedents, we are of the opinion that the Adjudicating Authority here has relied on the statements recorded under Section 108 without affording an opportunity to the appellant to cross-examine them. In the reply to the show cause notice filed by the appellant, he has specifically requested for the witnesses to be cross-examined, and therefore, the Adjudicating Authority was bound to follow the mandatory procedure prescribed in Section 138B of the Act. Without having done so, the order is not sustainable. The Tribunal was also not justified in upholding the order of the Adjudicating Authority in imposing the penalty, despite the infirmity pointed out by us. The Tribunal has not considered all these aspects in its order. We therefore, set aside the impugned order imposing penalty against the appellant. The questions of law are found in favour of the appellant and the appeal is allowed. The proceedings, if so advised, shall be recommenced providing the appellant wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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