Central Board of Indirect Taxes And Customs Vs Subair Kallungal (Kerala High Court)
Kerala High Court held that levy of penalty on the basis of statement recorded under section 108 of the Customs Act is not sustainable since provisions of section 138B have not been complied with. Accordingly, the appeals are allowed.
Facts- Post personal search and on the basis of the statements recorded under Section 108 of the Act, common show cause notices were issued to various persons, including the respondents herein proposing confiscation of gold and proposing penalty. Notably, Tribunal allowed the appeal and set aside the penalty. Accordingly, being aggrieved, revenue has filed the present writ.
Conclusion- The provisions of Section 122A of the Act under which the adjudicating authority has an obligation to provide “an opportunity of being heard” to the noticee. When the opportunity of hearing laid down under Section 122A is read along with the provisions of Section 138B of the Act, we are of the opinion that once the person who gave the statement is examined as a witness, the noticee who is proceeded against under the statute is also entitled for cross examining the person who gave the statement which is sought to be admitted in evidence. In other words, the finding of the Tribunal that the prayer made by some of the noticees/respondents herein for cross-examining the persons who gave the statements ought to have been allowed, gains significance. Therefore, we hold that the statements relied on by the revenue would not fall within the ambit of Section 138B of the Act, and therefore, no proceedings would lie on that basis.
