Arun Kumar Vs Commissioner of Customs (CESTAT Ahmedabad)
In the matter concerning the imposition of penalty under Section 114(iii) of the Customs Act, 1962, the appellant, Arun Kumar, challenged the order of the Adjudicating Authority and Commissioner of Customs (CESTAT Ahmedabad) which levied a personal penalty of Rs. 25 Lakh against him. The case arose from an alleged attempt to export “Chindis” under the guise of scarves to claim undue duty drawback benefits. Shri Vishal Punjabi, identified as the mastermind of the scheme, contacted Shri Sumit Valecha to identify a Customs House Agent (CHA) who could facilitate export clearance. Arun Kumar was alleged to have introduced Valecha to Shri Nitesh Gangwani, an H-card holder of a CHA firm, M/s. DP Logistics. However, it was noted that Arun Kumar had no direct dealings with the CHA or its owner, and his involvement was inferred from WhatsApp chats and statements from various individuals, including Nitesh Gangwani, Sumit Valecha, and Preventive Officer Shri Jyoti Prakash.
The Adjudicating Authority concluded that Arun Kumar had a role in the alleged conspiracy by suggesting Gangwani as the CHA, sharing his contact details, advising on declaration of goods’ price, and allegedly offering bribes to facilitate the export consignment. Nevertheless, the appellant’s posting at the time was primarily in post-clearance audit, unrelated to day-to-day export clearance, thus limiting his direct involvement in the transaction. Furthermore, statements from Vishal Punjabi and his brother indicated that they did not know Arun Kumar, challenging the assertion of his participation in the conspiracy.
Crucially, the appellant’s defense emphasized that the penalty was imposed solely on the basis of statements and WhatsApp messages, without any documentary evidence or proper legal procedure as mandated under Sections 138B and 138C of the Customs Act, 1962. Section 138B outlines that statements recorded before a Gazetted officer are only relevant if the adjudicating authority examines the witness in chief and allows cross-examination, ensuring the veracity of the statement. Precedents such as Andaman Timber Industries vs. CCE, Kolkata-II (2015 324 ELT 641 SC) and Jindal Drugs Pvt. Ltd. vs. UOI (2016 340 ELT 67 P&H) affirmed that ignoring cross-examination violates principles of natural justice, rendering such statements inadmissible.
Evidence in the form of WhatsApp messages and computer printouts were similarly scrutinized. Section 138C of the Customs Act specifies procedures for admissibility of electronic records, requiring proper certification and compliance akin to Section 65B of the Indian Evidence Act, 1872, as clarified in Anvar P.V.. In the present case, printouts from mobile phones and laptops were not accompanied by the required certificate confirming authenticity and lawful control, thus rendering the electronic evidence inadmissible. Tribunal decisions, such as S.N. Agrotech vs. CC, New Delhi (2018 361 ELT 761 Tri. Del.), were cited to emphasize that electronic records cannot be relied upon if statutory procedures are not followed.
During departmental inquiry, cross-examination of key witnesses, including Nitesh Gangwani and Jyoti Prakash, revealed that Arun Kumar had not approached them for any action related to the misdeclaration, nor were bribes offered at his instance. These facts highlighted the lack of direct evidence against the appellant and reinforced the argument that reliance solely on statements and messages without proper examination and certification contravened legal mandates.
The Tribunal concluded that the Adjudicating Authority had failed to examine witnesses in chief, had not permitted cross-examination, and had not followed procedures under Sections 138B and 138C. Consequently, neither statements nor WhatsApp messages could be legally treated as evidence against Arun Kumar. The personal penalty of Rs. 25 Lakh under Section 114(iii) of the Customs Act, 1962, was therefore held to be unsustainable. The appeal was allowed, and the impugned order set aside.
In summary, the case underscores the strict requirements for admissibility of witness statements and electronic evidence in customs proceedings. It reaffirms that penalties cannot be imposed based solely on unverified statements or uncorroborated electronic communications without following the procedural safeguards mandated under the Customs Act, 1962 and supported by judicial precedents.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
