TMI Blog2020 (10) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... t which is duly established on record. Rectification of mistake - HELD THAT:- The CESTAT was justified in rejecting the rectification application as any interference in the impugned order passed by the CESTAT would have resulted in review of its own order which is not permissible under the provisions of the Customs Act. Appeal dismissed. - R/Tax Appeal No. 834 of 2018 - - - Dated:- 12-3-2020 - Honourable Mr. Justice J.B. Pardiwala And Honourable Mr. Justice Bhargav D. Karia For the Appellant(s) : Mr Raghavendra Hanjer With Mr. Bhash H Mankad For the Opponent(s) : Mr Mitesh R Amin (2876) Senior Standing Counsel With Ms Maithili Mehta Standing Counsel ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. This Court (Coram : Hon'ble Mr. Justice Akil Kureshi and Hon'ble Mr. Justice B.N.Karia) passed the following order on 4th October, 2018 : 1. The appellant has been visited with personal penalty by the Customs authorities, which has been confirmed by the CESTAT by the impugned judgment. Learned counsel for the appellant submitted that the appellant was a NonExecutive Chairman of the Company and was not involved in the daytoday ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was a Non-Executive Chairman of one M/s. Sheshanka Sea Foods (P) Ltd.(hereinafter referred to as the company ). According to the appellant, he used to visit the company and used to preside over the Board meetings very rarely and one Shri V.V. Kamath, Executive Director of the company was the overall in charge of all the affairs of the company along with whole time Director Shri Srinivasa R. Naik. 3.2) The company imported 666.750 mt of HDPE granules under the separate bills of entry filed in the month of March 1990 under the DEEC scheme at Kandla port claiming the benefit of exemption notification without payment of duty on the ground to be utilised for manufacturing and exporting such goods. According to the appellant, he had no knowledge of the order being placed for supply of the goods as the same was never brought before the Board meeting at all or to his knowledge by any of the directors. 3.3) Custom Investigation wing however, found that in breach of conditions of DEEC scheme, the goods were diverted to the local market and in fact the goods never reached the factory of The company situated at Karnataka. The show cause notice dated 31st July 1998 was issued alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judication proceedings. 3.6) After remand, the adjudicating authority have given an opportunity of hearing to the appellant, passed a fresh Order in Original on 27th August, 2007 in which it was held that the company was liable for alleged breaches on account of which the goods would be liable for confiscation under sections 111(d) and 111(o) of the Customs Act, 1962 ( for short the Customs Act ) and penalty of ₹ 50 lakhs was imposed on the company under section 111(a) of the Customs Act in addition to confirming the duty demand. The adjudicating authority also imposed personal penalty of ₹ 20 lakhs up on the appellant under section 112(a) of the Customs Act and also imposed penalty of ₹ 10 lakhs on the Executive Director Vijay Venkatrao Kamat and rest of the directors were absolved of their liabilities. Being aggrieved and dissatisfied, the appellant challenged the said order of the adjudicating authority before the CESTAT. 3.7) The CESTAT by common order dated 31st October, 2016 in Appeal No. C/421/2007 filed by the appellant and in Appeal No. C/57/2008 filed by Vijay Venkatrao Kamat dismissed both the appeals by holding that no interference was requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the record of the company and criminal complaint also has been lodged against them before the jurisdictional Court. It was therefore, submitted that in view of such statement of the appellant as well as the statements of other persons recorded by the Customs authority under section 108 of the Customs Act, the appellant could not have been saddled with the penalty of ₹ 20 Lakhs being the chairman of the company. 5. Learned advocate for the appellant further submitted that the appellant filed a detailed replies on 10th October, 1998 and on 20th October, 1999 pointing out various facts with regard to the alleged offence to demonstrate that the appellant had no knowledge about the transaction of import but the same were not considered by the adjudicating authority of by the CESTAT. 6. Learned advocate for the appellant also pointed out that the request of the appellant for cross examination was rejected by the Commissioner in the second round of hearing. It was pointed out that the appellant being a Non-Executive Chairman, no penalty ought to have been imposed on him in absence of any specific allegation and evidence against the appellant. It was submitted that since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t statement could not have been relied upon by the authority as such statement was given only with an intention to take revenge against the appellant for filing a criminal case. 7. It was submitted that the CESTAT failed to consider that no tangible and corroborative evidence was collected by the investigating authority to reject the request of the appellant for cross examination of the witnesses. 8. Learned advocate for the appellant submitted that in the facts and circumstances of the case, no penalty could have been imposed under section 112(a) of the Customs Act as the ingredients required to invoke the said provisions are not present inasmuch as the CESTAT confirmed the penalty only on the ground that the appellant was a promoter and whole time director of the company which is not true and correct. It was submitted that the CESTAT was duty bound to correct the mistake in its order where an issue has been argued and/or statement made the on issue which was not recorded and/or considered in the order. It was further submitted that import was without approval of the appellant and he was not involved in evasion of the duty. 9. Learned advocate for the appellant in support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Venkatrao Kamat whereby the appeal filed by Shri Kamat for imposition of penalty of ₹ 10 lakhs by the adjudicating authority was dismissed. It was pointed out that in the said order, this Court has referred to the statement dated 3rd July, 1997 of Shri Kamat wherein he had admitted that application for advance license for import of goods was submitted to the licensing authority with the knowledge of the appellant and he reported directly to the appellant being the chairman of the company. Learned advocate Mr. Amin also relied upon the decision of this Court (Coram : Hon'ble Mr. Justice Rajesh Shukla) in case of Amad Noormamad Bakali v. (The) State of Gujarat and others reported in 2011 (12) GLH 31 to submit that the statement under section 108 of the Customs Act recorded by the Customs Officer is admissible in evidence as it would be hit by the provisions of sections 30 and 34 of the Evidence Act. It was therefore, submitted that statements of Mr. Kamat and Mr. Srinivasa Naik recorded under section 108 of the Customs Act by the Customs authority cannot be treated as the statements of the co accused persons but the such statements are admissible in the evidence and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich required them to take the said goods directly to the factory of manufacture and to enter the said goods into the records required to be maintained in accordance with the provisions of Central Excise and Salt Act, 1944, Condition (e) ibid which required them to export the products produced out of the imported goods, condition (f) ibid which required them to use the imported goods for the specific purpose for which the same was imported i.e. for manufacturing packing material and condition (g) ibid which categorically stated that the imported goods or any porting thereof shall not be sold or loaned or otherwise transferred to any other person or utilized or permitted to be utilized or disposed of for any other purpose, read with conditions appended to Licence No. 0001145 dated 21.2.1990. However, evidences that were collected in the course of investigation carried out in this regard which witnessed search of the premises of SSFPL on 14.6.1991 and those of M/s. Jobworkers namely Karwar Plastics and M/s. Krishna Plastics Industries as well as recording of the statements of various persons named above under section 108 of Customs Act, 1962 clearly revealed that SSFPL had not complie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Shri R.N.Shetty. These deposition by different responsible persons associated with the Company clearly established the fact that Shri R.N.Shetty was involved in day to day affairs of the Company and was aware of import of goods under consideration and diversion thereof in contravention of the conditions governing its duty free import. As regards Shri V.V.Kamat, it is observed from his own statementdated 3.7.1997 that the application for advance licence for import of HDPE granules was submitted to the licensing authority under its signatures and he also looked after day to day affairs of the Company and reported directly to Shri R.N.Shetty, Chairman, which is also reiterated by him in his defence reply filed before this authority. The above set of evidences are to be considered sufficient for holding that both these persons are responsible for rendering the goods liable for confiscation under section 111(d) and 111(o) of Customs Act, 1962 and ipso facto, both these persons are liable for penal action under the provisions of section 112(a) of Customs Act, 1962. In the backdrop of these facts, the various pleas raised by Shri R.N.Shetty with reference to minutes of the meeting of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods is not ordered considering that the same have already been cleared at the material time. (ii) I impose penalty of ₹ 50,00,000/( Rupees Fifty lakh only) against SSFPL under section 112(a) of Customs Act, 1962. (iii)I confirm the demand for duty of ₹ 89,61,999/( Rupees Eighty Nine Lakh Sixty One Thousand Nine Hundred Ninety Nine only) under section 28 of Customs Act, 1962 along with interest as applicable, in terms of section 28 AB ibid, against SSFPL. (iv) I impose penalty of ₹ 89,61,999/( Rupees Eighty Nine Lakh Sixty One Thousand Nine Hundred Ninety Nine only) against SSFPL under section 114 A of Customs Act, 1962. (v) I impose penalty of ₹ 20,00,000/( Rupees Twenty Lakh only) against Shri R.N.Shetty under section 112(a) of Customs Act, 1962. (vi) I impose penalty of ₹ 10,00,000/( Rupees Ten Lakh only) against Shri V.V.Kamat under section 112(a) of Customs Act, 1962. Show Cause Notice No.S/10377/ 97SIB dated 31.7.1998 issued by Custom House, Kandla is disposed of in above terms. 13. The CESTAT after considering the materials on the record as well as written statements and synopsis filed by the appellant held as under : 5. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Vijay Venkatarao Kamat blames Shri R N Shetty for the entire scheme of defrauding the Public Exchequer and diversion of the imported goods. The statements of others especially Shri Srinivas Naik, Wholetime Director, and Shri Vinayak D. Gavdi, Manager (Administration) clearly establishes that both Shri R N Shetty and Shri Vijay Venkatarao Kamat are responsible for the said evasion of duty. 8. As regards the contentions regarding cross-examination of witnesses, it is observed that in the first round, the adjudicating authority had granted their request for the cross-examination but they did not appear for the cross-examination of witnesses. It is also observed from the impugned order that the appellants had not cooperated in the adjudication proceedings in spite of directions of this CESTAT in the remand order. It is also observed that supporting evidences, facts of the case, and records clearly establish the contraventions and evasion of duty and the role of both the accuseds. 9. As regards the plea of limitation, it is observed that the goods were imported and cleared under License No. 0001145 dated 21.02.1990 availing the benefit of exemption under Notification No.140/87 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s defense statement filed in response to the show cause notice. On the basis of such materials, the adjudicating authority came to the conclusion that the appellant along with Shri R.N.Shetty were the persons responsible for rendering the goods liable for confiscation. 10. It appears quite undisputable that the appellant had signed the necessary documents for import of goods, the goods upon import though were required to be utilized for manufacture of export product at the factory of the company, never reached the factory premises but were diverted in the local market and that the appellant was in-charge of the day to day functioning of the company. Such being the facts, the involvement and knowledge of the appellant in diversion of the goods in local market is writ large on the face of the record. These findings were confirmed by the CESTAT in the impugned judgment. Such being the findings of facts, we have no reason to interfere. No perversity is pointed out in such factual conclusions. 11. Clause(a) of section 112 of the Customs Act, provides for penalty against the person who in relation to any goods, does or omits to do any act which act or omission would render such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en considered by both the Courts below and, therefore, it has been submitted that the present Revision Application requires to be considered as the convictions have been recorded solely on such statements. The submissions, which have been made at length referring to this aspect and also discussion in the judgments given by both the Courts below though sound appealing requires closure scrutiny, it does not seem to be well-founded. The first aspect about the admissibility of the statements recorded under Section 108 of the Customs Act is well settled in light of the judicial pronouncement made by the Apex Court that such statement made before the Officer is admissible in evidence as it cannot be said that the statement before the Police, which is also relied upon time and again that when during the inquiry, such statement is made before the authorized officer under the statute, such statements would be admissible in evidence and it would not be hit by the provisions of Section 34 or 30 of the Evidence Act. 33. A useful reference can be made to the observations made by the Honble Apex Court in a judgment reported in (1997) 3 SCC 721 in case of K.I. Pavunny v. Assistant Collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith regard to the coercion or threat have also been considered and have not been accepted. It is required to be mentioned as observed that it is the duty of the accused prima facie to establish by evidence that such statement was recorded under such compulsion or coercion or threat then burden would shift on the prosecution to discharge that it was recorded voluntarily. In the facts of the present case, it could be seen that the accused had moved earlier Criminal Misc. Application Nos.1340, 1347 1348 of 1985 and as per the order dated 19.09.1985 passed therein, it has been clearly recorded that the appellant had undertaken to accept summons under Section 108 of the Customs Act and had agreed to remain present for recording such statement. Therefore, such applications were made under Section 438 of the Criminal Procedure Code, wherein the orders have been passed recording some statements on behalf of the accused and, thereafter, when such statements are recorded, the submission with regard to coercion or threat cannot be readily accepted. Further, as rightly submitted by the learned Counsel, Ms.Yagnik, no evidence has been brought on record on this aspect to primarily establish th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether it is vitiated on account of any of the premises envisaged under Section 24 of the Evidence Act. 39. Therefore, as such statements recorded before the authority under the special statute like Customs Act are not a statements of the accused and, therefore, the submissions made by the learned Counsel that the statements of the co-accused would not be admissible also is misconceived. 40. Further, as discussed hereinabove referring to the judgment of the Hon'ble Apex Court reported in (1997) 3 SCC 721 wherein the purpose and object is also reflected and the purpose as indicated is that while making such inquiry for the purpose of collecting evidence and in furtherance thereof when the seizure has been made of the contrabands goods, the entire evidence would be a relevant for considering the guilt of the accused persons. Therefore in the facts of the case, on the basis of such statements of the accused recorded revealing the details with regard to the transaction which have taken place leading to further recovery of the contraband articles and or money, for which, panchnamas are made. Therefore, observations have been made by the Apex Court in a judgment reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is collected, which would be evidence for all the accused and if such independent evidence is there, it cannot be said that other co-accused are implicated merely on the basis of the statements of other co accused recorded under Section 108 of the Customs Act. In fact, it is on the basis of such revelation, further evidence has been collected like in the present case on the basis of the statement of the co-accused when search has been made and the contraband articles (watches and money) have been recovered from the other co-accused would in fact be a evidence against them. Further, there is no explanation with regard to this aspect in further statements under Section 313 of the Criminal Procedure Code. Therefore, cumulative effect of the entire evidence has to be considered and particularly when there is no explanation coming forth from the accused or the concerned accused with regard to the incriminating evidence against him. Therefore, it cannot be said that the impugned judgment and order recording conviction, which has been confirmed, is perverse or resulted into miscarriage of justice. It is also well settled that the provisions of Section 313 of the Criminal Procedure Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e officer exercising the powers under the Act is an authority within the meaning of Section 24 of Evidence Act. [1] Though the authority/officer on suspecting a person of having committed the crime under the Act can record his statement, such a person per force is not a person accused under the Act. [2] he becomes accused of the offence under the Act only when a complain is laid by the competent customs officer in the court of competent jurisdiction or magistrate to take cognizance of the offence and summons are issued. thereafter, he becomes a person accused of the offence. [3] A statement recorded or given by the person suspected of having committed an offence during 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. [4] 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, obviously it was only an afterthought. The High Court, therefore, rightly has not given any weight age to the same. It is true that the Magistrate has given various reasons for disbelieving the evidence of Public Witness 3, the panch witness who had also, at one point of time, indulged in smuggling. It is unlikely that Public Witness 3 would bring 200 gold biscuits of foreign marking and conceal them in the compound of the appellant without appellant's knowledge for safe custody. It is not his case that he had facilitated PW3 in concealing them in his compound. The place of concealment of the contraband is also significant at this juncture. It is just near and visible from the window of his bedroom through which he or family members could always watch anyone frequenting the place where the contraband was concealed. This fact becomes more relevant when we consider that after concealment of the contraband in the compound one would ensure that others having access to the compound may not indulge in digging and carrying away the same. As soon as the appellant and/or the members of his family had sight of such visitor or movement by others, they would immediately catch hold of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 35C(2) of the Act. This Court has already laid down law in the case of T.S. Balram v. M/s.Volkart Brothers, 82 ITR 50 to the effect that a mistake apparent from the record cannot be something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. It has been also held that a decision on a debatable point of law cannot be a mistake apparent from the record. If one looks at the subsequent order passed by the CESTAT in pursuance of the rectification application, it is very clear that the CESTAT reappreciated the evidence and came to a different conclusion than the earlier one. At an earlier point of time, the CESTAT came to a conclusion that the company to which the respondent-assessee sold its goods was an inter connected company. In the circumstances, according to the CESTAT, the decision of the department to appoint a Cost Accountant to ascertain value of the goods manufactured by the assessee was considered to be just and proper. However, after considering the submissions made in pursuance of the rectification application, the CESTAT came to a different conclusion to the effect that the assessee company and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., at lower price and as such deals with the facts of that particular case. In our opinion, the said judgment would not help the respondent so far as the matter pertaining to rectification is concerned. 19. So far as the judgment delivered in Commissioner of Central Excise, Mumbai v. Bharat Bijlee Limited, (supra) is concerned, this Court held therein that when the Tribunal had totally failed to take into consideration something which was on record, the Tribunal had committed a mistake apparent on the face of the record. In the instant case, the evidence which was on record was duly appreciated by the Tribunal at the first instance but the Tribunal made an effort to re-appreciate the evidence and re-appreciation can never be considered as rectification of a mistake. We are, therefore, of the view that the aforementioned judgment would not help the respondent assessee. 20. So far as judgment delivered in the case of Honda Siel Power Products Ltd. v. Commissioner of Income Tax, Delhi, 2008(221) E.L.T 11 (S.C.), is concerned, there also the Tribunal had not considered certain material which was very much on record and thereby it committed a mistake which was subsequently rectifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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