Shakthi vs Commissioner of Customs

T.S. Sivagnanam, J.—This appeal by the Revenue is directed against the order passed by the Customs, Excise & Service Tax Appellate Tribunal (Tribunal) in Appeal No. C132-133/2009, dated 28-7-2011. The Tribunal by the said order, dismissed the appeal filed by the appellant and thereby confirming the order of penalty imposed on the appellant. The appellant seeks admission of the above appeal, by raising the following substantial questions of law:-

Whether the first respondent authority and the second respondent Tribunal is correct in holding that the charges of Section 114(i) of Customs Act, 1962 is made out in the facts and circumstances of the case against the appellants warranting imposition of penalty against the appellant?

Is the second respondent Tribunal right in attaching importance to the alleged confessional statement of the appellant, especially when the same has been retracted and such confessional statement have not been corroborated by any independent evidence?

Whether the respondents are right in coming to the conclusion that the evidence let in by third parties alone would be sufficient to hold the appellant guilty of the charges under the provisions of the Customs Act, 1962?

Whether the Tribunal is right in passing an order without hearing the appellant?

Whether the respondents are right in holding the appellant liable without enquiring the person who kept the contraband, namely Alibhai, alleged as the master mind, in show cause notice?

We have heard the learned counsels appearing for the parties and perused the materials available on record.

The Directorate of Revenue Intelligence issued a show cause notice, dated 12-3-2008 to the appellant, who was at that point of time a cofeposa detenue and lodged in the Central prison, Madurai. The other noticees were M/s. Navamani Match Works, Mr. Ramasubbu @ Ramesh, Mr. Alibhai, Mr. B.A. Thomas and M/s. Sree Valli Shipping & Transport, Tuticorin. One of the other noticee Mr. Ramasubbu @ Ramesh was also a cofeposa detenue at the said point of time, when the show cause notice was issued. In the said show cause notice, it was proposed to levy of penalty under Section 114 of the Customs Act and punishment under Section 135(1)(a) of the Act read with Sections 2(33), 2(39), 11 of the Customs Act and Section 11(1) of the Foreign Trade (Development & Regulation) Act, since the appellant indulged in illicit export of Red Sanders Wooden logs, which was a prohibited item for export under the Customs Act read with Foreign Trade Policy 2004-09.

In the show cause notice, the role played by the appellant was stated and reference was also made to the statements recorded from the appellant under Section 108 of the Customs Act. The appellant submitted his reply on 21-4-2008 denying the allegations made against him and stating that he is innocent and prayed for dropping the proposal to levy penalty and take action under the provisions of the Customs Act. The Adjudicating Authority considered the case on merits and observed that the appellant, Mr. K. Ramasubbu @ Ramesh and Martin Luther have spoken about the material role played by Mr. Alibhai of Chennai and Mr. Anbu of Madurai, but did not provide any vital clues about the whereabouts and therefore, he could not be located. On verification, as regards the ownership details pertaining to a car, it was found that the car was given by the appellant and used by Anbu of Madurai and the registration of the car was done before the Regional Transport Officer, Madurai. On enquiry, it was found that the registration number pertained to a motorcycle and not a TATA Indica Car as accepted by the appellant in his statement dated 27-9-2007. The Adjudicating Authority has elaborately dealt with the role played by the appellant, and the basis for issuance of the show cause notice, the Adjudicating Authority considered the reply submitted by the appellant as well as the other co-noticees and after affording an opportunity of personal hearing to the appellant on 30-9-2008, considered the case and recorded a finding that the declared export goods were stuffed inside the container CCSU 41740-5 picked up by the vehicle arranged by the appellant and Alibhai at M/s. Vijay Impex, Kovilpatti purportedly under the supervision of Central Excise officer and the container was sealed. The trailer laden with the sealed container was not taken to the port immediately, but taken to a godown at Palavantham, which was hired by the appellant, who posed himself as Sathish Kumar of Madurai. Part of the quantity of safety matches was replaced there by the gang with 18.66 MT of Red Sanders Wooden logs, which were secreted there, without tampering the seals but by tampering the container. Thereafter, the consignment reached Tuticorin Port, which was intercepted by the DRI officer before its loading into the scheduled vessel and on examination of the container revealed that it contained 18.66 MT of Red Sanders logs and 800 Cartons of Safety Matches.

Further, the Adjudicating Authority in paragraph 42(xvii) detailed the role played by the appellant as to how he met the other accomplice Mr. Alibhai in Madurai and how the entire operations were overseen by the appellant. Further, the statement recorded from the appellant under Section 108 of the Customs Act was referred to, wherein the appellant admitted his involvement and also the involvement of Mr. Alibhai and Mr. Ramasubbu @ Ramesh in the illicit export of Red Sanders Wooden logs. The belated retraction made by the appellant was rejected by the authority. Firstly, by observing that the statement was recorded under Section 108 of the Customs Act and that the retractions have been made after 7 to 8 months. After referring to the decision of the Hon''ble Supreme Court in the case of K.T.M.S. Mohd. and another Vs. Union of India, and the decision in the case of Surjeet Singh Chhabra Vs. Union of India and others, ., held that the statement given by the appellant is binding. After recording these facts and the role played by the appellant in the offence, the Adjudicating Authority imposed a penalty of Rs. 7,50,000/- on the appellant. Challenging the same, the appellant preferred appeal before the Tribunal. The Tribunal considered the factual issue and after re-appreciating the materials, which were available on record, confirmed the penalty. Aggrieved by the same, the present appeal has been filed.

Firstly, it is to be pointed out that the issue involved in this appeal is purely a question of fact. The Adjudicating Authority after considering the allegations in the show cause notice, the reply given by the appellant, and after affording an opportunity of personal hearing to the appellant, has elaborately discussed about the complexity and the involvement of the appellant in the smuggling of Red Sanders Wooden logs, which are prohibited items.

This Court exercising jurisdiction under Section 130(1) of the Customs Act is not inclined to re-appreciate the factual findings recorded by the Adjudicating Authority and confirmed by the Tribunal. In the absence of any error of law pointed out by the appellant, this Court is not inclined to interfere with the order of penalty. In the result, the Civil Miscellaneous Appeal fails and it is dismissed. No costs. Consequently, connected miscellaneous petition is closed.