Statement Recorded U/S 108 Of Customs Act Is Not Valid Evidence U/S 138B Of Customs Act: CESTAT
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that statement recorded under section 108 of the Customs Act not valid evidence under section 138B of the Customs Act.
The Bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) was addressing the issue of whether the statement recorded under section 108 of the Customs Act could be considered as evidence under section 138B of the Customs Act.
In this case, the assessee/M/s New Era Trading Pvt Ltd was engaged in the export of readymade garments to foreign companies and availed the benefit of drawbacks under the Focus Market Scheme.
However, intelligence was received that New Era Trading fraudulently availed special Focus Market Scheme benefits by deliberately mis-declaring the consignee country for the purpose of obtaining undue benefit under this scheme.
The Principal Commissioner of Customs, ICD (Exports) has imposed penalties on the directors under section 114(iii) and section 114AA of the Customs Act, 1962 for the reason that they had connived with Imran Mirza, Proprietor of M/s Concorde Shipping and Logistics India and instead of exporting the goods to countries listed in the Focus Market Scheme, diverted them to Dubai to enable the exporter to avail undue benefits under the said Focus Market Scheme.
The case of the assessee is that the finding recorded by the Principal Commissioner that the Directors of New Era Trading Pvt. Ltd., in connivance with Imran Mirza abetted and indulged in the act of mis-declaring the destination of the goods exported so as to enable the exporter to avail undue benefits under the Focus Market Scheme is based on statements which were not recorded by the Adjudicating Authority in accordance with the procedure prescribed under section 138B of the Customs Act.
The Tribunal observed that the confiscation of goods has been set aside by order of date in Customs Appeal filed by New Era Trading Pvt. Ltd. Penalty under section 114(iii) of the Customs Act could not, therefore, have been imposed upon the Shanti Swaroop Sharma and Sangeeta Tuteja.
The bench noted that the statement of Shanti Swaroop Sharma made under section 108 of the Customs Act would not be relevant.
“Shanti Swaroop Sharma and Sangeeta Tuteja knowingly prepared and gave false or indirect information regarding the country of export destination is not based of any evidence but is based on mere statements recorded under section 108 of the Customs Act. These statements cannot be relied upon,” stated the Tribunal.
The bench observed that the penalty imposed upon Shanti Swaroop Sharma and Sangeeta Tuteja under section 114AA of the Customs Act cannot also be sustained.
In view of the above, the Tribunal allowed the appeal.
Case Title: Shanti Swaroop Sharma, Director v. The Principal Commissioner of Customs
Case Number: Customs Appeal No. 50071 of 2024
Counsel for Appellant/ Assessee: Ashirwad and Virat Sharma
Counsel for Respondent/ Department: Shashi Kant Sharma
