TMI Blog2020 (5) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... is to collect information of the contravention of the provisions of the Customs Act, 1962 or concealment of contraband or avoidance of duty of Excise so as to enable them to collect the evidence of the proof of contravention of the provisions of the act for initiating proceedings for further action of confiscation of the contraband or imposition of penalty under the Act etc. The adjudication proceedings under the Customs Act, 1962 cannot solely be based on the inculpatory statements of witnesses and noticee alone. Such statements can be only used for corroborating the case which the Department proposes to establish before the quasi-judicial authorities - The department is bound to prove the case based on balance of probabilities as per well-recognised principle of law in the case of departmental adjudications The 1st respondent is directed to complete the adjudication proceedings within a period of 9 months from date of receipt of this order since the dispute pertains to import made by the petitioner between 2010 and 2013 - It is for the 1st respondent to take a call as to whether it proposes to solely rely on the statements recorded under section 108 of the Customs Act, 1962 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 45 lakh in 2 instalment of ₹ 25 lakhs and ₹ 20 lakhs on 26.12.2013 and on 3.1.2014. 8. The 2nd respondent has made out a case of undervaluation of Plaster of Paris and allied goods imported by the 1st petitioner between June 2010 and December 2013 by invoking Section 14 of the Customs Act read with Rule 9 and Rule 4 of the Customs Valuation Rules, 2007. 9. After the show cause notice was issued, the petitioners through their counsel filed a later dated 17.7.2015 and requested the 1st respondent to issue summons to:- i) Shri.K.Sundaramoorty, C.D Palani and one Ayub Khan of M/s. Junaid Plaster of Paris; and ii) the officers of the 2nd respondent who recorded statement from these persons under Section 108 of the Customs Act, 1962 based on which the above show cause notice was issued be produced for cross-examination. 10. The petitioners through their counsels also appeared before the 1st respondent on 13.11.2015 and on 26.11.2015. On 26.11.2015, they requested for certain relied upon documents which were thereafter furnished pursuant to a communication dated 29.12.2015. 11. Since, the 1st respondent did not respond to the request to summon the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Timber Industries v. CCE (2016) 15 SCC 785. iii. ShankariaVs State of Rajasthan (1978)3 SCC 435. iv. Kanungo and Co. 1983 (13) ELT 1456; and v. Mani Bhadras Trading Co versus CC 2010 (251) ELT 194. 22. Learned Senior Counsel submits that the Honourable Supreme Court in DK Basu versus State of West Bengal and Ashok K Johari versus State of U.P (1997) 1 SCC 416 observed that there are several other government authorities like Directorate of Revenue Intelligence, Directorate of Enforcement, Coastal Guard, Central Reserve Police Force ((CRPF), Border Security Force (BSF), Central Industrial Security Force (CISF), Traffic Police, Central Bureau of Investigation (CBI), CID etc. who have been given power to detain a person and to interrogate him in connection with the investigation of economic offences under the provisions of the Essential Commodities Act, Excise and Customs Act, Foreign Exchange Regulation Act etc. and that there are incidents of torture and death also. 23. He submits that the Hon ble Supreme Court therefore has issued the following guidelines to the officers of the department in paragraph 35, which read as follows: 35. We, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be signed both by the arrestee and the police officer effecting the arrest and its copy provided to the arrestee. (8) The arrestee should be subjected to medical examination by a trained doctor every 48 hours during his detention in custody by a doctor on the panel of approved doctors appointed by Director, Health Services of the State or Union Territory concerned. Director, Health Services should prepare such a panel for all tehsils and districts as well. (9) Copies of all the documents including the memo of arrest, referred to above, should be sent to the Magistrate for his record. (10) The arrestee may be permitted to meet his lawyer during interrogation, though not throughout the interrogation. (11) A police control room should be provided at all district and State headquarters, where information regarding the arrest and the place of custody of the arrestee shall be communicated by the officer causing the arrest, within 12 hours of effecting the arrest and at the police control room it should be displayed on a conspicuous notice board. 24. Learned Senior Counsel submits that none of the above safeguards were followed by the officers of the 2nd respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2000) 7 SCC 53 .; vii. Commissioner of Customs, Calcutta Vs. Ratan Kumar Saha - 2005 SCC Online Cal 137 viii. Ramesh Khatani Vs. Union of India - 2007 SCC Online Raj 352; ix. Union of India Vs. Padam Narain Aggarwal Ors. - (2008) 13 SCC 305; x. Nirmal Singh Pehlwan Vs. Inspector, Customs House Punjab (2011) 12 SCC 298; xi. IVRCL Infrastructure and Projects Ltd. Vs. Commissioner of Customs, Chennai - (2015) 13 SCC 198; xii. Tofan Singh Vs. State of Tamil Nadu - 2018(363) ELT 3 (SC); xiii. Asst. Collector of Customs, Madras Vs. Govindasamy Ragupathy 1998 (98) ELT 50 (Mad) ; xiv. Vijay Kumar Jain Vs. Commissioner of Customs, Shillong 2001 (135) ELT 137 (Tri. Del.); xv. H.S. Ramakrishna Vs. Commissioner of Customs, Bangalore 2010(259) ELT 17 (Kar) ; xvi. AK Subramani Vs. Commissioner of Customs, Chennai - 2017 (358) ELT 77 (Mad); xvii. Abdul Aziz Reshamwala Vs. Commissioner of Customs, Jaipur - 2003(158) ELT 692 (Tri. Del.) -; xviii. Commissioner of Customs, Mumbai Vs. Videomax Electronics - 2001(264) ELT 466 (Tri. Mumbai) ; Xix. Mani Bhadras Trading Company Vs. CC (Sea exports), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statements recorded from any of the three persons. Learned counsel for the 1st respondent has filed a copy of letter dated 7.1.2020 received by him. 37. In the said letter it has been stated that The statements tendered by the two CHA person also supports the fact that there is nothing stated by them against the noticee as a matter of their own personal knowledge but only what comes as a result on comparing the values declared in voices of the noticee and values declared in the invoices/import data of other importers for import of same goods from the same supplier. Therefore, the demand of the advocate for their cross examination has no reason basis and is unwarranted, as the invoices/documents have been also provided to the notice. 38. At the same time, it has been stated that the statement of these 2 persons can be eschewed. 39. As far as officers of the 2nd respondent is a concerned, it is stated that there are no statements of the officers of the 2nd respondent and therefore cross-examination of these officers is unwarranted. 40. In page number 5 of the show cause notice, it has been stated that the 2nd petitioner has agreed with the statement dated 18.12.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g within the meaning of section 193 and section 228 of the Indian Penal Code, 1860 (45 of 1860). 45. Section 108 of the Customs Act, 1962 gives power to a gazetted an Officer of Customs to summon any person to give evidence in any enquiry. 46. Enquiry under section 108 is deemed to be a judicial proceeding by virtue of sub-section (4) for the purpose of section 193 and 228 of the Indian Penal Code. 47. A person summoned to give statement under Section 108 of the Customs Act, 1962 before such officer is bound to appear and state truth. Such a person is not an accused person when such statements are recorded. 48. If such a person gives false statement before such officer, he/she renders himself/herself liable to be prosecuted for an offence under section 193 and section 228 of the Indian Penal Code, 1860 and thus invites a collateral criminal proceedings. 49. As per the decision of the Honourable Supreme Court in Percy Rustomji Vs State of Maharashtra 1971 (1) SCC 847 such officers conducting enquiry under section 108 of the Customs Act, 1962 are not police officers and the person against whom such enquiry is made is also not an accused person. The statement mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the inquiry under Section 108 of the Act or during confiscation proceedings is not a person accused of the offence within the meaning of Section 24 of the Evidence Act. d. Though the Customs Officer is an authority within the meaning of Section 24 of the Evidence Act, by reason of statutory compulsion of recording the statement or the accused giving voluntary statement pursuant to his appearing either after issuance of summons or after the appellant's surrender, such statement cannot be characterised to have been obtained by threat, inducement or promise. e. The collection of evidence under Section 108 and other relevant provisions relating to search and seizure are only for the purpose of taking further steps for confiscation of contraband and imposition of penalty. f. The selfsame evidence is admissible in evidence on the complaint laid by the Customs Officer for prosecution under Section 135 or other relevant statutes. 54. Still further in para 25, the Court held as under:- 25. It would thus be seen that there is no prohibition under the Evidence Act to rely upon the retracted confession to prove the prosecution case or to make the same basis for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the statements recorded are to be solely relied for confirming the proposed demand or are relied for mere corroboration of independent evidence gathered during investigation. 61. In the case of former, mandatorily such statements would require cross-examination and without cross-examination, confirmation of demand would be contrary to the law settled by the Hon ble Supreme Court in Andaman Timber Industries Vs CCE referred to supra. 62. If reliance is to be placed on any statement of any person as a witness, the 1st respondent is enjoined to issue summons and produce such persons for cross examination, unless of course such person is a coaccomplice of the noticee or an employee of the noticee. 63. Therefore, it is for the 1st respondent to issue summons to these two employees of CHA s for being present for cross examination if the 1st respondent is of the view that reliance has to be placed on the statement of these persons before passing an order in the said show cause proceeding. 64. Therefore, 1st respondent may inform the petitioner whether it proposes to confirm the demand solely based on the statements of the persons whose statements have been recorded un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, dismiss the above writ petitions with the following observation:- i. The 1st respondent is directed to complete the adjudication proceedings within a period of 9 months from date of receipt of this order since the dispute pertains to import made by the petitioner between 2010 and 2013; ii. It is for the 1st respondent to take a call as to whether it proposes to solely rely on the statements recorded under section 108 of the Customs Act, 1962 for confirming the demand in which case, the 1st respondent shall produce such persons for cross examination by the petitioners; iii. On the other hand, if reliance is placed on independent evidence gathered by the officers of the 2nd respondent, the 1st respondent need not issue summons to the persons who statements were recorded under section 108 of the Customs Act, 1962. iv. At the same time, the 1st respondent is not governed by strict rules of evidence. The 1st respondent shall be governed by preponderance of probability and Customs Valuation Rules, 2007 read with Section 14 of the Customs Act, 1962. v. Needless to state, the petitioners shall be given an opportunity to file their final reply. vi. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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