Silicone Concepts International Pvt. Ltd. Vs Principal Commissioner of Customs (CESTAT Delhi)
Delhi High Court has held that statement of directors of company who were co-noticees cannot be in every case need to be cross examined under Section 9D of the Central Excise Act, 1944 or Section 138 of Customs Act, 1962. It was held that statement of directors cannot be called as statement simplicitor but a statement as that of the company. The Court also held that as these statements are made to the Customs officer, these are out of the ambit of Section 24 of Indian Evidence Act and are readily admissible as evidence. The High Court also held that the co-noticee, if his statement amounts to confession, cannot be compelled to be cross-examined and there would be no violation of principles of natural justice.
FULL TEXT OF THE CESTAT JUDGEMENT
M/s. Silicone Concepts International Pvt. Ltd. (M/s. SCIPL, hereinafter)/the appellants are engaged in import and trading of various products as epoxy, stone cleaner, stone care, polyester, firelight, etc. imported from M/s. Akemi Chemisch Technische Spezialfabrik GMBH, Germany (hereinafter referred as M/s Akemi). The Department got an information about M/s. SCIPL to have mis-declared the value of the imported goods to the Customs and to have mis-classified goods to evade payment on MRP/RSP basis and to not to have included the amounts paid to the parent Company terming them as ‘Royalty’ in connection with import of goods treated by M/s. SCIPL in the assessable value. On the basis of said information, the search of the appellants premises seizing goods/documents/laptops, etc. was conducted on 10.12.2015. Seized goods, however, were given to the Directors of SCIPL namely Shri Vineet Saluja and Shri Pradeep Sharma for safe custody. The statement of Shri Vineet Saluja was recorded on 10.12.2015, 20.07.2016, 19.06.2016 and 15.11.2016. The statement of Shri Pradeep Sharma was recorded on 10.12.2015 and 16.05.2016 accepting that M/s. SCIPL have committed taxguru.in the above mentioned acts. From the entire investigation, Department observed that M/s. SCIPL has colluded with their overseas suppliers and has fabricated documents and created parallel set of documents i.e. invoices to be submitted to Customs with an intention of evading payment of applicable duty and invoices for the purposes of actual payments. While they have made payments on the basis of invoices showing actual transactional value, they have caused duplicate invoices showing lesser value to the Customs Authorities for the purpose of assessment. Both the afore-named Directors were observed to be the master mind for the entire fraud committed by M/s. SCIPL as they only aided the Company in suppressing the actual value paid for the imports to their suppliers i.e. M/s. Akemi. Department also observed that M/s. SCIPL have used the services of M/s. Dadson Global Cargo, New Delhi who facilitated clearance of cargo of M/s. SCIPL through 7 different CHAs. None of those CHAs were observed to have followed the KYC norms nor did they bother to ascertain the credentials of M/s. SCIPL. Resultantly, a show cause notice No. 03/2017 dated 22.02.2017 was served upon M/s. SCIPL, both its Directors, Proprietor of M/s. Dadson Global Cargo and all the CHAs as named in the said show cause notice proposing the redetermination of the assessable value, re-classification of the goods, confiscation of the seized goods which were provisionally released and confiscation of the goods re-determined. Differential Customs duty was proposed to be recovered. Penalties were proposed to be imposed upon both the Directors as well as the Proprietor of M/s. Dadson Global Cargo. The penalties upon all the CHAs were also proposed to be imposed. During adjudication of the said show cause notice, the appellant made a request for cross examination of Shri Vineet Saluja, Shri Pradeep Sharma, Ms. N. Rashmi and Shri Amit Mallik. The said request was turned down vide the Order communicated to the appellant vide letter No. 07/2017 dated 13.02.2019. Being aggrieved of the said denial that the present Appeal has been preferred before this Tribunal.
2. We have heard Shri A.K. Prasad, learned Advocate for the appellant and Shri Rakesh Kumar, learned Authorised Representative for the Department.
3. It is submitted on behalf of the appellant that the show cause notice reveals that the same has been issued relying upon the statements of Shri Vineet Saluja, Shri Pradeep Sharma, Ms. N. Rashmi and Shri Amit Mallik. For the contents of the said statement to be relevant, the person making the statement have to be examined as a witness before the adjudicating authority prior the said statement is admitted in evidence and the person has to be cross examined by the assessee. It is impressed upon that said is the mandate as per the principles of natural justice. Otherwise also Section 9D of Central Excise Act, 1944 which is para materia with Section 138 of Customs Act, 1962 statutorily mandates the same. Learned Counsel has relied upon the Single Member Bench decision of this Tribunal bearing Final Order No. 53409-53411/2016 dated 06.09.2016 wherein it has been held that the statements recorded during investigation are required to be examined in Chief and the right of cross examination cannot be denied merely because the deponents are either co-noticees/employees of the assessee. Learned Counsel has also relied upon the following case laws:
