BEN Vs Commissioner of Customs (CESTAT Delhi)
The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal examined an appeal challenging confiscation of export goods and imposition of penalties arising from alleged diversion of consignments covered by 62 Shipping Bills. The case stemmed from an investigation initiated on the allegation that exports declared to Armenia and Bulgaria under the Focus Market Scheme were diverted to Jebel Ali, UAE, a non-notified destination, after Let Export Orders were issued. A show cause notice dated 08.11.2017 was adjudicated by the Additional Commissioner, who ordered confiscation of goods with a total FOB value of ₹34.01 crore under Section 113(d), (g) and (i) of the Customs Act, 1962, and imposed penalties under Sections 114(iii) and 114AA. The Commissioner (Appeals) affirmed these findings.
The Tribunal noted that the findings of fraudulent diversion were based entirely on statements recorded under Section 108 of the Customs Act from shipping line representatives, a freight forwarder, and the appellant’s partner. The appellant contended that these statements could not be relied upon as the mandatory procedure under Section 138B of the Customs Act had not been followed. Accepting this contention, the Tribunal relied on its earlier decision in Surya Wires Pvt. Ltd., holding that statements recorded during investigation are admissible only if the makers are examined as witnesses before the adjudicating authority, an opinion is formed on admissibility, and an opportunity of cross-examination is provided. As none of these safeguards were followed, the statements were held to be inadmissible and incapable of proving the allegations.
