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TMI Blog2025 (2) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... penalties imposed on him under Sections 112 and 114 A of the Customs Act, 1962 (hereinafter 'the Act') as per the order in original dated 30th October, 2019. 3. The Principal Commissioner in CUSAA 38/2025 has filed an appeal against the order dated 30th April, 2024, as CESTAT allowed the appeal filed by the Respondent-Sunil Aidasani @ Vicky in the same final order by which the penalties imposed as per order in original dated 30th October, 2019 was set aside. The CESTAT also observed that a statement made by Mr. Bhalla under Section 108 of the Act will be relevant to prove the case as per Section 138B of the Act and thus the said person should be cross examined. Brief Facts 4. The entire investigation emanated from the order in original passed on 30th October, 2019 passed by the Principal Commissioner of Customs (Import) wherein an investigation had been commenced against five firms which were seen to be involved in declaration of goods and import of prohibited goods. The said five firms are: S.No. Name of the Company & Address IEC No. Director/Prop./Partner 1. M/s B.M. International F-9, Sagar Pur West, New Delhi 0514098171 (i) Inder Preet Singh Bhalla (ii) Manish Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000/- (Rupees Twenty Lacs only), in lieu of confiscation. The restricted items i.e. fire works (25.586 MT) valued at Rs. 5.11,72,000/- are ordered for absolute confiscation. (iv) I impose penalty of Rs. 1,50,00,000/- (Rupees One Crore Fifty Lacs only) under Section 112 (a) & (b) of the Customs Act, 1962, on M/s B.M. International. (v) I impose penalty of Rs. 50,00,000/- (Rupees Fifty Lacs only), under Section 112 (a) & (b) of the Customs Act, 1962 and Rs. 20,00,000/- (Rupees Twenty Lacs only) under Section -114AA of the Customs Act, 1962 on Shri Inderpreet Singh Bhalla. (vi) I impose penalty of Rs. 50,00,000/- (Rupees Fifty Lacs only), under Section 112 (a) & (b) of the Customs Act, 1962 and Rs. 20,00,000/- (Rupees Twenty Lacs only) under Section 114AA of the Customs Act, 1962 on Shri Manish Kumar. B. In respect of M/s Manish & Bhalla International, D2/1, D2, Block, Jeewan Park, Pankha Road, New Delhi and its partners Shri Inderpreet Singh Bhalla and Shri Manish Kumar- (i) I hereby reject the declared value of the goods imported by them in 6(Six) Containers i.e. Container No. HDMU6566450; Container No. NYKU4808510; Container No. DRYU9508818; Container No. HDMU6362138; C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons why the right of cross examination is not an unfettered right. In fact, the Department relies upon the decision in Kanungo & Co. vs Collector of Customs, Kolkata & Others, 1983 (13) E.L.T. 1486 (S.C.) as also few other judgments which state that the principles of natural justice do not bind the Informants to be examined in the presence of Appellant or be allowed to be cross-examined by them regarding the statements made before the Customs Authorities. 7. The said order was challenged before the CESTAT. The CESTAT however curiously dismissed the appeal of Sushil Aggarwal and held that right of cross examination need not be given. However, in the same breath the CESTAT held that in respect of Aidasani, since right of cross examination was not given under Section 138(B) of the Act, the appeal was allowed and the penalty imposed upon him was set aside. The relevant paragraphs thereto are set out below: "17. Sushil Aggarwal: Admittedly, he was the indentor in China and would connect buyers from India and the sellers from China and when the deal is struck, he would receive commission for his services. 18. However, as his statements indicate, his role does not end with placi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case only as per section 138B. This requires the adjudicating authority to examine the person making the statement and decide if it is to be admitted in evidence. Needless to say that if it is admitted in evidence and is proposed to be used against another person, such person should be allowed to cross examine the person making the statement. 27. Since the procedure prescribed under section 138B was not followed, the statement is not relevant to prove the case against Aidasani. 28. We also find that neither section 112 nor section 114A4 provide for penalty for not responding to summons or not cooperating with the investigation. 29. Therefore, the penalties imposed on Aidasani in the impugned order cannot be sustained and need to be set aside." 8. It is in respect of these findings of the CESTAT that both the Appellants-Mr. Sushil Aggarwal in CUSAA-35/2025 and Principal Commissioner of Customs (Import), New Delhi in CUSAA No.38/2025 are before the Court. 9. Mr. Jain, ld. Counsel appearing for Mr. Sushil Aggarwal submits that the CESTAT has discriminated between his client and Mr. Sunil Aidasani as the appeal of Mr. Sunil Aidasani was allowed however Mr. Sunil Aggarwal's ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... precluded from seeking cross-examination of the informant, if the latter's statements were recorded or were to be considered in the proceedings as material evidence. This Court notices in the present case that the statements of the co-accused, recorded under Section 108 of the Act, ultimately became the basis of the impugned order. The denial of the right of cross examination of such witnesses, was plainly in violation of the principles of natural justice. 5. Having regard to the above discussion, the Court is of the opinion that it would not be appropriate to relegate the appellant to the remedy of cross-examination in the course of an appeal, which would in effect amount to denial of an appellate forum, in the event, the findings of the Additional Commissioner are affirmed. As a consequence, the impugned order dated 07.02.2019 [O-I.O. No. 45 / 2019 /K.R. Madhar / ADC / EXP /ICD/TKD] is set aside, as against the petitioners. The Additional Commissioner of Customs shall proceed to hear the petitioners and also grant appropriate and sufficient opportunity to cross-examine the witnesses, whose cross-examination was sought but denied in the original proceedings, which culminated in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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