R.P. SINGH Vs. COMMISSIONER OF CUSTOMS, KANDLA

JUDGEMENT

(1.) THE appellants namely Ravindra Rastogi, Shri Rudra Pratap Singh and Maha Singh Khatri have filed these appeals against the imposition of penalty of Rs. 1.25 crore, 1 crore and 1 crore respectively under Section 112 (a) and (b) Customs Act, 1962. The facts of the case are that on specific information received by the officers of the DRI that M/s. Al Falah Brass, Moradabad (Importer) had imported zinc ingots and copper wire rods duty free under the DEEC scheme and diverted the same to the local market. That the employees of M/s. Ganpati Warehousing Ltd. (GWL), New Delhi are actively involved in clearance, transportation and diversion of said imported goods. Accordingly the premises of M/s. GWL were searched and no incriminating documents were recovered but statements of certain persons namely Shri Sanjay Mahendra Dave, Shri Subhash Sharma, Shri M.S. Khatri were recorded. On the basis of the statements a show cause notice was issued to M/s. Al Falah Brass, Moradabad and its proprietor Shri Mohd. Anis as to why imported goods i.e. 220.421 MT of zinc ingots and 190.346 MT of copper wire rods valued at Rs. 2,70,66,171/ - should not be held liable for confiscation under Section 111 (O) of the Customs Act, 1962 and the custom duty amounting to Rs. 1,67,05,292/ - was also demanded. Penalties on the importer M/s. Al Falah Brass, Mohd. Anis, Shri Rudra Pratap Singh, Shri M.S. Khatri, Shri Subhash Sharma, Shri Sanjay Mahendra Dave were also proposed.

(2.) THE allegations in the show cause notice were as follows :

(3.) AFTER recording the statements of various persons involved in the said importation and diversion of the goods in the local market against the advance licence under DEEC Scheme, the duty demand was confirmed and penalties were imposed on the other co -noticees as well as the appellants before us. Shri L.P. Asthana, learned advocate for the appellant, Ravindra Rastogi appeared before us today and submitted that the case of the department is only on the basis of various statements made by the co -noticees which were later on retracted, by them within six days and there was no incriminating documents were recovered from any of the co -noticees. He further submitted that the statements made by the co -noticees although within six days but the appellant namely Ravindra Rastogi was not allowed to cross examine the said co -noticees. Hence the impugned order is without any basis, corroborative evidence and is only on the basis of statements which are retracted and in violation of principles of natural justice is liable to set aside. Shri D.K. Trivedi, advocate learned counsel for Shri Maha Singh Khatri and Rudra Pratap Singh also submitted the same arguments. He also submitted that the appellants have retracted their statements within six days and the statements of the appellants were recorded under duress and coersion. He further submitted that the statements of the transporter, CHA and the broker are not relevant as there is no corroborative evidence and there is no inculpatory documents recovered from any of the persons alleged in the show cause notice. Moreover, the importer has admitted that the importer has made import and sold the impugned goods in the local market. Hence the impugned order is liable to be set aside. To support their contentions, the learned advocate relied upon G.T.C. Industries Ltd. v. Union of India reported in 1991 (56) E.L.T. 29 (Bom.) wherein it was held that denial of cross examination of witnesses and right to lead overall and documentary evidence in support of their contention amounts to breach of natural justice. He further relied upon Hindustan Polyster Lines reported in 2009 (236) E.L.T. 44 (P&H) wherein the Honble High Court of P&H held that denial of cross examination of witnesses whose statements recorded at the back of the assessee, principle of natural justice required to be followed and an opportunity of cross examination is also be given to the assessee. He also submitted that the reliance by the adjudicating authority in the case of Surjeet Singh Chhabra v. Union of India reported in 1997 (89) E.L.T. 646 (S.C.) and Naresh J. Sukhawani v. Union of India reported in 1996 (83) E.L.T. 258 (S.C.) are not applicable to this case for denial of cross examination of the witness as the facts and circumstances of those cases are totally irrelevant.