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TMI Blog2024 (6) TMI 1335X X X X Extracts X X X X X X X X Extracts X X X X ..... (hereinafter referred to as "appellant no. 2") while alighting from an Alipurduar-Siliguri bound bus on 16.08.2015. Upon search of the body of the appellant no. 2, nine yellow metal bars, believed to be of gold, wrapped in newspapers, were recovered from him. 2.1. On enquiry, the appellant no. 2 informed that he had procured the said gold from one person by name Shri Birendra Gupta (hereinafter referred to as "appellant no. 1") of Jaigaon. 2.2. The Officers believed that the said gold bars were of foreign origin smuggled into India without payment of Customs duties. As the appellant no. 2 was not in possession of any licit documents for legal importation, possession, transportation and carrying the nine pieces of yellow metal bars believed to be gold of foreign origin, the said goods were seized by the Officers under Section 110 of the Customs Act, 1962. 3. After investigation, a Show Cause Notice dated 11.02.2006 was issued to both the appellants wherein it was inter alia proposed to confiscate the nine gold bars totally weighing 9,000 grams, valued at Rs.2,37,75,300/-, under Section 111(b) and 111(d)of the Customs Act, 1962.Penalty was also proposed to be imposed on both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2016, he was interrogated in connection with the seizure in another case and falsely implicated in the present case on the basis of the statement dated 13.01.2016 recorded from him; the statement was computer-typed in Hindi at the instance of the DRI officers; he was not aware of the contents of it. 7.1. It is also submitted that the provisions of Section 138B have not been complied with for taking cognizance of the said statements; since the provisions of Section 138B were not complied with in the instant case, he submits that the statements dated 16.08.2015 recorded from appellant no.2 and statement dated 13.01.2016 recorded from him cannot be relied upon to impose penalty on him. In this regard, he placed his reliance on the decisions referred at paragraph 6.1 supra and contended that the penalty imposed on him is not sustainable. Accordingly, he prayed for setting aside the penalty imposed on him. 8. The Ld. Authorized Representative appearing for the Revenue submits that the gold was recovered from the possession of the appellant no. 2; he was not having any valid document for carrying the gold at the time of his interception on 16.08.2015; he has categorically stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant has in fact contended that no gold was recovered from his possession. To substantiate his claim, the appellant no.2 has asked for cross examination of the Pancha witnesses. We observe that the Department ought to have allowed cross-examination of the Pancha witnesses without which it cannot be established whether there is any truth in the claim made by the appellant no. 2. 10.2. The appellant no. 2 has also claimed that he had not made any statement regarding handing over of the gold to him by Shri Birendra Kumar Gupta. The statement given by him was not voluntary. Further, the provisions of Section 138B of the Customs Act have not been followed by the ld. adjudicating authority and hence the statements cannot be relied upon to implicate him in the offence and impose penalty on him. 10.3. We observe that the provisions of Section 138B have not been followed by the ld. adjudicating authority while passing the impugned order. The Department has relied only on the statement recorded from him to conclude that the gold was recovered from his possession. As there is no other evidence available on record other than the statements recorded from both the appellants, we hold that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w arises for consideration in these appeals may not arise on account of the peculiar facts and circumstances of the case. Admittedly, as per the view taken by the adjudicating authority as is evident from the order of adjudication that there are sufficient evidence available to justify the imposition of penalty on the noticees. It is true that the adjudicating authority has stated that this defence which is available corroborates the statement given by the third parties under Section 108 of the Act. Thus, if according to the adjudicating authority, there is enough evidence to pin down the respondent de hors the statements recorded under Section 108 of the Act, this Court fails to understands as to why the adjudicating authority should place reliance upon the statement under Section 108 of the Act. The Learned Counsel for the respondent in MAT/556/2019 submitted that in several of the decisions relied upon by the Revenue there were cases where statements were retracted and certain other cases where there was direct link between the persons who had given the statements who were also noticees as well as the other co-noticees and the case on hand is entirely different as the noticees w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quire attendance of a person to make a statement. He is empowered to require a person to make a statement under Section 108 of the Act of 1962. Such a statement made in the course of an enquiry, and if its limited to the enquiry, then, the question of the person making the statement being open to cross-examination does not arise. However, once an adjudication proceeding is initiated, and a statement made under Section 108 of the Act of 1962 is introduced as a piece of evidence in such adjudication proceedings, then, the person making that statement must be made available for cross-examination to the party against whom such statement has been used in the adjudication proceedings, subject to the provisions of Section 138B of the Act of 1962. If the conditions prescribed under Section 138B(1) of the Act of 1962 is satisfied, then, the statement made by a person under Section 108 of the Act of 1962 would become relevant in the adjudication proceedings, notwithstanding, such a person not being cross-examined by the person who is affected by such a statement. 28. In the facts of the present case, the order-in-original records that, the petitioner was disallowed cross-examination of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable, - ...." 10.5. In the present case, the evidence available on record does not establish that appellant no.2 was actively involved in the smuggling of the gold. Accordingly, we hold that the penalty imposed on the appellant no. 2 under Section 112(a) and 112(b) of the Act is not sustainable in the facts and circumstances of this case. 11. Regarding the penalty imposed on the appellant no. 1 viz. Shri Birendra Kumar Gupta, we observe that the appellant no. 2 implicated him in his Statement dated 16.08.2015, as the person who handed over the gold to him. However, there is no corroborating evidence available on record to substantiate this allegation. Later, after four months, Shri Birendra Kumar Gupta was arrested in another case. While recording his Statement dated 13.01.2016 in that case, he admitted that he has earlier sold the said 9 kgs gold to Shri Bharat Sonar. However, we find that in his reply dated 11.02.2016 to the Show Cause Notice, the appellant no. 1 denied to have given any such statement implicating Shri Bharat Sonar. In his reply dated 13.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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