Legal principle

A retracted confessional statement is weak evidence which can at best be used as corroboration and cannot by itself sustain a penalty unless the Department establishes its voluntary character and supports it with independent evidence.

Court decision

The Tribunal partly allowed the appeals of Appellants 1 and 2 and allowed those of Appellants 3 and 4: the penalties on Ashok Kumar Goyal (Appellant 1) under Sections 112(a)(i) and 114AA and the consolidated penalty on Vipan Kumar Garg (Appellant 2) under Sections 112(a)(i) and 114AA were upheld but reduced to 25% of the amounts imposed; the separate Section 114AA penalty on Appellant 2 was set aside; and the Section 112(a)(i) penalties on Bhavesh Thakkar and Mukesh Thakkar (Appellants 3 and 4) were set aside.

Facts

Acting on DRI intelligence about a syndicate illegally importing R-22 (Refrigerant 22) gas cylinders — a restricted Ozone Depleting Substance — from Dubai in the names of M/s Ramesh and Company and M/s Vipan and Company, officers examined containers at ICD Loni, Ghaziabad and recovered 3024 R-22 gas cylinders concealed behind declared Heavy Melting Scrap (HMS) by false partitions, along with the HMS cover cargo, 694 nozzles and a Samsung LED TV. The goods were seized under the Customs Act, 1962 (Sections 110/111/119). By Order-in-Original dated 28.03.2017, the Principal Commissioner, Noida Customs ordered absolute confiscation of the cylinders under Section 111(d),(f),(g),(i),(j),(l),(m), confiscation of the HMS cover goods with redemption option under Section 125(1) on fines, and penalties of ₹5–20 lakh on the firms and several individuals under Sections 112(a)(i) and 114AA, dropping proceedings only against M/s Premier Cargo Movers. Four persons appealed to CESTAT: Ashok Kumar Goyal (Manager/PA holder, Ramesh & Co.), Vipan Kumar Garg (Proprietor, Vipan & Co.), Bhavesh Thakkar and Mukesh Thakkar.

Key provisions

• Section 112(a)(i), Customs Act, 1962 — Penalty for improper importation of goods
• Section 114AA, Customs Act, 1962 — Penalty for use of false and incorrect material
• Section 111(l), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 119, Customs Act, 1962 — Confiscation of goods used for concealing smuggled goods
• Section 11, Customs Act, 1962 — Power to prohibit importation or exportation of goods
• Section 116, Customs Act, 1962 — Penalty for not accounting for goods
• Section 108, Customs Act, 1962 — Power to summon persons to give evidence and produce documents
• Section 1, Customs Act, 1962 — Short title extent and commencement
• Section 125(1), Customs Act, 1962 — Option to pay fine in lieu of confiscation
• Section 117, Customs Act, 1962 — Penalties for contravention etc not expressly mentioned
• Section 110, Customs Act, 1962 — Seizure of goods, documents and things
• Section 114, Customs Act, 1962 — Penalty for attempt to export goods improperly etc