Case Law Details
Pramod Kumar Verma Vs Commissioner of Customs (Preventive) (CESTAT Allahabad)
The appeal arose from Order-in-Appeal No. 617-CUS/APPL/LKO/2022 dated 05.09.2022 passed by the Commissioner (Appeals), Customs, CGST & Central Excise, Lucknow, which upheld Order-in-Original No. 50-JC/2021-22 dated 03.11.2021 issued by the Joint Commissioner, Customs (Preventive), Lucknow. The original order had imposed a penalty of Rs. 10,00,000 on the appellant under Section 112(b) of the Customs Act, 1962, ordered confiscation of Rs. 8,25,500 recovered from his residence, and initiated proceedings under Section 136 of the Act.
The appellant, who was serving as an Air Customs Officer at Lal Bahadur Shastri International (LBSI) Airport, Varanasi, challenged the orders. He stated that on 19.12.2019, officers of the Directorate of Revenue Intelligence (DRI) conducted an operation at the airport based on intelligence inputs alleging that certain passengers were smuggling goods such as gold, silver, cigarettes, and saffron, with the possible connivance of some Customs officials. The appellant claimed that he had been deputed to airport duty verbally by his superiors, Assistant Commissioner Shri B.K. Gupta and Superintendent Shri K.K. Singh, although his primary posting was in the Recovery Cell of the Customs (Preventive) Division.
During the operation, the DRI officers allegedly seized mobile phones of all Customs personnel, including the appellant, and detained them for questioning. They reportedly conducted baggage checks of passengers from three flights—Air India IX-184, Malindo OD-290, and Thai Smile WE-335—recovering 4,34,400 sticks of foreign cigarettes, 30 kg of saffron, and 5501.99 grams of gold valued at Rs. 2.67 crore. These items were seized under Sections 110 and 111 of the Customs Act, 1962.
According to the appellant, the DRI officers held him and other staff overnight, recording his statement under duress. He alleged that while senior officers were allowed to leave, he was kept in confinement without dignity. His statement dated 19/20.12.2019 was allegedly taken under pressure and as per the dictation of the DRI officers. The appellant later retracted the statement and, in another statement dated 20.01.2020, denied any involvement in smuggling, clarifying that he had neither received any illegal gratification nor had knowledge of any monetary transactions. He also claimed that threats from senior officers had influenced his earlier actions and statements.
The appellant contended that the statements recorded under coercion and without legal representation were inadmissible, and the two statements were inconsistent due to the conditions under which the first was obtained. He further claimed false implication based on circumstantial evidence presented in the Show Cause Notice (SCN) dated 17.06.2020. The SCN referred to various electronic evidences, including photographs and audio clips, which were not corroborated with dates or identified persons. Additionally, the cash of Rs. 8,25,500 recovered from his residence was alleged to be family money given as a gift for his daughter’s marriage, supported by a notarized affidavit.
The appellant also argued that even if the alleged gratification of Rs. 2,000 per clearance were true, the large cash recovery amount was inconsistent with such a claim. He submitted that the confiscation and penalty were based on unreliable statements and unverified evidence. He also referred to a departmental penalty order dated 21.12.2023, which imposed a reduction of pay under the CCS (CCA) Rules, 1965, against which his appeal was still pending.
On merits, the appellant’s counsel asserted that there was no corroborative evidence to support the retracted statement, nor was cross-examination of witnesses allowed, violating principles of natural justice. Several judicial precedents were cited to emphasize that statements under duress without corroboration cannot be used as evidence.
The Department’s representative defended the order, asserting that the penalty was justified.
Upon hearing both sides, the Tribunal observed that the appellant’s posting and duties were directed by his senior officers and that the appellant’s claim of career-related threats held relevance. It was also noted that while the appellant had already served departmental punishment, his appeal against it remained pending.
The Tribunal found that the entire case rested heavily on the appellant’s statements and recovery from his residence. However, the Department failed to establish a direct link between the seized money and any smuggling activity. The Tribunal reaffirmed that the statements of third parties or co-accused without corroboration cannot constitute substantive evidence. Citing Commissioner vs. Kamal Bajaj (2016), it held that mere possibility of abetment cannot substitute for proven probability.
It was further observed that the statements recorded by the DRI on 19/20.12.2019 lacked corroboration and that the recovery of cash was adequately explained. The Tribunal emphasized that the appellant was not given a fair opportunity to cross-examine witnesses or challenge the evidence, violating procedural fairness. It also relied on the precedent in Rajendra Prasad vs. Commissioner of Customs, Patna (2001), where penalties based solely on co-accused statements without corroboration were set aside. Similarly, in Commissioner of Customs (Preventive), Kolkata vs. Amit Jalan (2024), it was held that uncorroborated statements cannot be accepted blindly.
Concluding that the penalty was based solely on unverified statements recorded under duress and unsupported by independent evidence, the Tribunal held that such reliance was legally unsustainable. Consequently, the Order-in-Appeal dated 05.09.2022 was set aside, and the appeal was allowed with consequential relief.
The order was pronounced in open court on 03.11.2025.
FULL TEXT OF THE CESTAT ALLAHABAD ORDER
This appeal is directed against Order-in-Appeal No.617-CUS/APPL/LKO/2022 dated 05.09.2022 of the Commissioner (Appeals) Customs, CGST & Central Excise, Lucknow. By the impugned order, the First Appellate Authority has dismissed the appeal before him upholding Order-in-Original No.50-JC/2021-22 dated 03.11.2021 passed by Joint Commissioner, Customs (Preventive) Commissionerate, Lucknow vide which ordered for initiation against the Appellant under Section 136 of the Customs Act, 1962 and imposed penalty of Rs.10,00,000/- on the Appellant under Section 112 (b) of the Customs Act, 1962 and ordered for confiscation of Rs.8,25,500/- recovered from the residential premises of the Appellant.
2. Learned Counsel for the Appellant has submitted that the facts of the case are that the Appellant at the time was working as Air Customs Officer1 at LBSI Airport, Varanasi. On 19.12.2019, acting upon specific information that certain groups of passengers are regularly carrying out smuggling of goods like gold, silver and other contraband items like cigarettes, saffron, etc. in their personal baggage, the Officers of DRI visited LBSI Airport, Varanasi. The DRI Officers also had specific input regarding connivance of some Custom Officers with these passengers through their kingpins.
3. That the Appellant was working as ACO at LBSI Airport, Varanasi only when the Assistant Commissioner, Shri B. K. Gupta and Superintendent Shri K. K. Singh pressured on him as during the period his main duty was in recovery cell of Customs (Preventive) Division, Varanasi. That on 19.12.2019, the Appellant also attended his duty at LBSI Airport Varanasi as per verbal order of his Superintendent Shri K. K. Singh and the Assistant Commissioner Shri B. K. Gupta and was clearing the passengers from departure side after clearing the Bangkok Flight at 9:30 Hrs by other Customs staff posted there. That at around 11:30 Hrs DRI Staff came there and forcibly took over the cell phones of all the Customs staff posted there and made the whole Customs staff including the Appellant sit in a side of office like hostage. The Customs staffs were not allowed to do their work and the DRI staff took over the whole work.
4. Thereafter, the Officers of DRI conducted Baggage examination of some specific passengers of three flights i.e. Air India Flight No. IX-184, Malindo Flight No. OD-290 & Thai Smile Flight No. WE-335, who had opted for Green Channel and were moving towards the Exit Gate of the Arrival Hall after Customs Clearance. During the examination of checked in baggage, hand baggage, etc., (i) 4,34,400 sticks of foreign origin cigarettes of different brands from Noticee No.2, 3, 4, 5, 6, 7, 8, 12, 13, 14, 15, and 16 were recovered, (ii) 30 Kgs of Saffron was recovered from Noticee No.6, 7 & 8 &, (iii) 5501.99 grams of gold collectively valued Rs.2,67,86,351/- was recovered from Noticee No.1, 9, 10 & 11. All the items recovered were believed to be liable to confiscation under Section 111 of Customs Act, 1962 and seized under Section 110 of the Customs Act, 1962.
5. Thereafter, the Statements of the Appellant and others, under hostage like situation, were recorded alongwith 16 passengers (Noticee No.1 to 16), Shri B. K. Gupta, Assistant Commissioner and Shri K. K. Singh, ACS. The statement of the Appellant was recorded after keeping him hostage for whole night without any dignity whereas other Officers like Shri B. K. Gupta, Assistant Commissioner and Shri K. K. Singh, ACS were allowed to go. That in the next morning i.e. 20.12.2019, the Appellant was brought out of airport for further investigation at DRI office Sigara and inquiry was started from the Appellant in one small room. The DRI officers were present and started taking statement dated 19/20.12.2019 under duress and pressure.
6. That question and answer done in hostage situation of Customs official did not go well with the Appellant and as a result, the Appellant answered the questions as per the DRI official‟s wish and dictation. The incriminating statements provided in the illegal custody of Customs official without any representatives of the Appellant is inadmissible. That the Appellant in another round of statement dated 20.01.2020, was getting pressured from various corners and still exonerated himself from any malicious activities. Appellant in his statement stated that he was under constant threat by his seniors for his career leading to some mis-happenings in the past. However, nowhere in the statement any implicating statements were made by the Appellant in relation to the series of incidents that took place on 19.12.2019. Also, the Appellant specifically stated that he has not received any gratification and was not aware of any money transactions being done.
7. That both the statements of the Appellant are completely different when it comes to any incriminating evidences against the Appellant in the events leading to the day. Such contradiction is due to the immense pressure of the DRI officials while taking the first statement in a hostage like situation. In the second statement, the Appellant was under pressure again but tried to exonerate himself showing the facts that no money transaction was known to him. That the Appellant has also been falsely implicated on the basis of Role played and circumstantial evidence produced by the Customs officers as per the Show Cause Notice2 dated 17.06.2020. In such SCN, the role played is based on the evidence on phone where in para 11 (i) (a) there is a photo being recognised by the Appellant, but it is not revealed in relation to which incident and what person, in para 11 (i) (b) there is one audio clip related to clearance of gold; again it is without the corroboration to the date of the incidence, in para 11 (i) (c) another audio clip which can be of any person has been correlated to the incident without any audio verification with person caught on airport; in para 11 (i) (d) recovery done at the Appellant’s house on 19.12.2019 being cash amounting to Rs.8,25,500/- is not having specifics as to such cash is given by whom and in regard to which incident. Moreover, the Appellant explained that the recovered cash belongs to his mother and was given as gift to his wife for their daughter’s marriage as having the same on record as Notarized Affidavit (Page No.208 of Appeal). Rest two paras 11 (i) (e) and 11 (i) (f) are based on the statement made under the influence and pressure of overnight illegal custody of the Appellant. Even if para 11 (i) (e) is to be believed as evidence, the amount of recovery at LSBI airport is in crores and the Appellant used to receive Rs.2,000/-only as clearance of contraband items is itself contradictory. All the recovery of cash done from Appellant’s residence was done on the date of incident; cannot be made admissible for the incident as the Appellant was illegally detained by the Customs officials on the said night having no idea as to what was recovered. Also, if the statement made in illegal custody is to be believed, the Appellant received Rs.2,000/- only as gratification per clearance, then a recovery of Rs.8,25,500/- is highly arbitrary in such case.
8. The Appellant’s Counsel also submitted the departmental order dated 21.12.2023 having Order No.02/Satarkta/2023 passed by Vikas, IRS, Commissioner, CGST & CE Commissionerate, Varanasi. In such order the penalty under Rule 11 (v) of the CCS (CCA) Rules, 1965 was imposed and the same has been completed also as being reduction of pay to three stages for one year. However, the Appellant has appealed the order before the Chief Commissioner of CGST and Central Excise Lucknow. The appeal has been filed on 31.01.2024 and the same remains pending adversely effecting the Appellant’s career.
9. On merits, the Ld. Counsel submits that there is no corroborative evidence to the statements made by the Appellant which has been retracted and no cross-examination was granted to the Appellant which is violation of principles of natural justice. In that circumstances Appeal order dated 05-09-2022 is to be set aside. To support their contention they relied on the following decisions :-
(a) Sudarsan Jana Commissioner of Customs (P), Kolkata [2017 (357) E.L.T. 656 (Tri. – Cal)].
(b) Vinod Solanki UOI [2009 (233) E.L.T. 157 (S.C.)].
(c) L. Jalaludeen vs. Dy. Dir. of Enforcement Directorate, Chennai [2010 (261) E.L.T. 84 (Mad.)].
(d) UOI Kisan Ratan Singh [2020 (372) E.L.T. 714 (Bom.)].
(e) Sachin Kumar Commissioner of Customs, Mangalore [2020 (374) E.L.T. 775 (Tri. – Bang)].
(e) Rajendra Prasad vs. Commissioner of Customs, Patna [2001 (136) E.L.T. 925 (Tri. – Cal)].
10. The learned Departmental Authorized Representative justified the impugned order and prayed that the appeal filed by the Appellant, being devoid of any merits, may be dismissed.
11. Heard both the sides and perused the appeal records.
12. In light of the submissions made from both the sides, I have considered the case and find that the Appellant’s work was restricted to airport duty appointed by the senior officials Shri K.K. Singh, ACS and Shri B. K. Gupta, Assistant Commissioner. This fact and the Appellant’s version of career related threat, that if the Appellant did not act as per the directions of his seniors, has relevance. The position of senior officials making duty appointing chart of the Appellant shows that they are in position to influence overall performance of the Appellant. That the Appellant has served his punishment given by the Department as per the order dated 21.12.2023 having Order No.02/Satarkta/2023 and yet has appealed for getting himself exonerated from any liability. The appeal is pending before Commissioner of CGST and Central Excise, Lucknow.
13. I find that the evidences presented in this case have a lot of reliance on statements and recovery from the Appellant. It is a fact that recovery from the Appellant has an explanation from the Appellant side, while the Department has not given any specifics linking seizure to the smuggling. It is a settled law that statement of third party and confession of co-accused is not substantive evidence in absence of corroboration thereof. Mere possibility of abetment is not similar to preponderance of probability. In case of Commissioner vs. Kamal Bajaj – 2016 (333) E.L.T. A178 (Tri. – Del.) it is held that, “Mere possibility of abetment is not similar to preponderance of probability. After discussing evidence against each of Customs Officer, which by and large was confined to aforesaid two points of third party statement and telephonic talks for which no transcript was available, it was held that there is no illegality or perversity in the order of Commissioner in exonerating Customs Officers.” On merits also, I find that except the statements recorded by the DRI dated 19/20.12.2019 which were not supported by the Appellant on the first opportunity available on 20.01.2020, no other corroborative evidence has been brought on record. On facts as stated above and under the circumstances of the case, penalty on the Appellant is not imposable.
14. Further, I find that in the case of Rajendra Prasad (supra), this Tribunal has observed as under:-
“4. Shri R.K. Roy, learned JDR, countering the arguments of the learned Consultant, reiterates the findings of the original authority and the appellate authority. He submits that the corroborative evidence can be used as a substantial evidence, as held by the Honourable Supreme Court in the case of Naresh J. Sukhawani v. Union of India reported in 1996 (83) E.L.T. 258 (S.C.) wherein it was held that the statement of the co-accused, recorded under Section 108 of the Customs Act, 1962, inculpating himself as well as the petitioner can be used as a substantive evidence. Shri Roy has also invited my attention to the decision of the Honourable Tribunal in the case of Mohmedbhai Asrafbhai Kimsarwala v. Collector of Customs reported in 1991 (52) E.L.T. 573 (Tribunal), wherein it was held that the statement of an accomplice without corroboration would not be sufficient to prove the guilt, and when there is a knowledge of involvement, personal penalty can be imposed. It was also held that before acceptance of the statement of the accomplice, some corroboration from some independent source is called for.
5. After hearing both sides and on going through the Order-in-Original and the Order-in-Appeal, it is observed that the appellants were penalised solely on the statement of Shri Shiv Kumar Sharma, the driver. Except the statement of Shri Shiv Kumar Sharma, there is no other independent evidence to corroborate the statement of the co-accused. It is an accepted legal proposition which has been accepted by the Apex Court in various judgments that the statement of co-accused, when not corroborated by any independent evidence, cannot be taken as a Gospel Truth. Therefore, reliance on the statement of the co-accused without corroboration is unacceptable in law. The reliance of Revenue on the judgment of the Hon’ble Supreme Court in Naresh J. Sukhawani is of no avail inasmuch as the statement of the co-accused in that case inculpates himself as well as the petitioner. In the instant case, the co-accused shifted the entire guilt on the appellants. In view thereof, the personal penalties imposed on the appellants are not warranted. Therefore, I have no hesitation in holding that the personal penalties are required to be set aside. Accordingly, I do so.”
15. After hearing both sides, and on going through the Order-in-Original and the Order-in-Appeal, it is observed that the Appellant is penalised solely on the statement given under duress and the evidence such as recovery of cash has not been found proper. The Appellant has been linked to the crime without giving proper opportunity of hearing. The Appellant has not been given opportunity to cross examine any witness and object on any of the evidences presented or recovery done. Also, the recovery done from the Appellant’s home on same day when the Appellant was held hostage cannot be said proper proof as the explanation given by the Appellant and his family for the amount recovered cannot be overlooked. In case of Commissioner of Customs (Preventive), Kolkata, vs. Amit Jalan, (2024) 23 Centax 266 (Tri.-Cal.), it has been held that statements made cannot be accepted blindly without corroborative evidence as, „the issue is, can that statement be accepted blindly without corroboration, and the answer is no.’
16. In view of the above discussion, I hold that Order-in-Appeal No.617-CUS/APPL/LKO/2022 dated 05.09.2022 of the Commissioner (Appeals) Customs, CGST & Central Excise, Lucknow cannot be sustained and the same is set aside. Accordingly, the appeal filed by the Appellant is allowed with consequential relief, if any, as per law.
(Order pronounced in open court on – 03.11.2025)
Notes:-
1 ACO
2 SCN
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