"CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH – COURT NO. – IV Customs Appeal No. 55029 of 2023 [Arising out of Order-in-Appeal No. CC(A) / Customs / D-II / ICD / TKD / Export / 1240 / 2022-23 dated 19.12.2022 passed by the Commissioner of Customs (Appeals), New Delhi] Ujjawal Chattopadhyay …Appellant Proprietor of M/s. Brightline (C&F) Agency I-876/18, Hari Nagar Extension, Badarpur, New Delhi - 110044 VERSUS Commissioner of Customs, New Delhi – ICD TKD …Respondent Inland Container Depot, Tughlakabad, New Delhi - 110020 APPEARANCE: Shri Amar Kumar Sinha, Consultant for the Appellant Shri Rohit Issar, Authorized Representative for the Respondent CORAM: HON’BLE DR. RACHNA GUPTA, MEMBER (JUDICIAL) DATE OF HEARING: 20.12.2024 DATE OF DECISION: 20.03.2025 FINAL ORDER No. 50420/2025 DR. RACHNA GUPTA The appellant Shri Ujjawal Chattopadhyay is F -card holder of Custom House Agent (CHA) namely M/s Brightline (C&F) agency. The present appeal is filed to challenge the Order-in-Appeal No. 1240/2022-23 dated 19.12.2022, however, only to the extent of imposition of penalty on Shri Ujjawal Chattopadhyay, the appellant, of Rs. 1 lakh each imposed under section 114(iii) and section 114AA of the Custom Act, 1962. The facts which culminated into the said order, in brief, are as follows: - 1.1 The officers of Directorate of Revenue Intelligence (DRI), Ahmedabad Zonal unit, got an intelligence that the M/s. Agogo Overseas (exporter) is engaged in export of various items and is Customs Appeal No. 55029 of 2023 2 indulged in over invoicing. DRI requested Additional Commissioner of Customs (Export), ICD, TKD to put exporter’s consignment having shipping bill no. 3003627 dated 26.03.2019 on hold. Since, the container had already left the premises at ICD, TKD and therefore, the same was held up at Speedy CFS, Nhava Sheva, Distt. Raigad, Maharashtra. The export consignment was examined vide Panchnama dated 09.05.2019 in the presence of appellant and representative samples were also drawn from the stock of export goods, namely, ‘LED FLASH LIGHT TORCH’ belonging to the abovementioned shipping bill. Valuation of goods, seized by the department, was done by Chartered Engineer appointed by the DRI under Panchnama Proceeding dated 20.01.2020. In view of investigations done by the department and statements recorded during investigations, it has been alleged by the department that the exporter is engaged in the export of Led Flash Torch light by gross over-valuation and mis-declaration with an intention to avail higher export incentive benefit. 1.2 Statement of Shri Mali Ram Agarwal for M/s. Agogo Overseas was recorded on 28.08.2019 who stated about starting the company in the name of Rang Bahadur Sharki as proprietor. He named Shri Amit as a person responsible for all invoices, lorry receipts, e-way bills etc. for grossly inflating the actual value therein. He also stated about appointing appellant for clearing work as being introduced by a forwarding agent named Amit. The statement of appellant was also got recorded. Department formed an opinion that Shri Rang Bahadur Sharki and Sh. Mali Ram Agarwal were fraudulently availing export incentives in the exporter Customs Appeal No. 55029 of 2023 3 firm M/s. Agogo overseas and were also wrongly claiming rebate under Merchandise Export from India Scheme (MEIS) and thus have rendered that goods, attempted to be exported by the said exporter which were held at Nhava Sheva Port and got 100 % examined, liable for confiscation under section 113(i) of Custom Act, 1962. Both the above named persons since were found to have reasons to believe about the goods attempted to be exported being highly overvalued are laible to penalty. The appellant was also found aware of the fact that the goods presented for export by the said exporter company were of very low grade but were highly overvalued in their documents. He still prepared and filed export documents. Thus, the appellant has been alleged for violating regulation (e) of regulation 10E of Custom Broker Licensing Regulation, 2018 (CBLR). 1.3 With these observations, the Show Cause Notice No. 12 / 2019 / 7387 dated 03.03.2020 was served upon the exporter firm M/s. Agogo overseas, Shri Mali Ram Agarwal the beneficial owner and on Shri Ujjawal Chattopadhyay, the appellant, being the proprietor of CHA M/s. Brightline (C&F) Agency. The show cause notice not only proposed the confiscation of the impunged goods, the penalty on both the co-noticees but proposed the penalties on appellant also under section 114 (iii) and 114AA of custom Act, 1962. The proposal was initially confirmed vide Order-in-Original no. 49/2020 dated 13.09.2020. The appeal against the said order has been rejected. Being aggrieved the appellant is before this tribunal. Customs Appeal No. 55029 of 2023 4 2. I have heard Shri Amar Kumar Sinha, learned Consultant for the appellant and Shri Rohit Issar, learned Authorized Representative for the respondent. 3. The learned consultant for the appellant mentioned that the Commissioner (Appeals) has imposed penalties on the appellant without appreciating the facts and circumstances of the case and submissions made by the appellant. Thus, the order against the appellant is arbitrary. In para 5.3 of the impugned Order-in- Appeal, Commissioner (Appeals) erred in giving incorrect factual observation that it was at appellate stage that the statement dated 22.05.2019 was contended by the appellant to not to be voluntary. It is impressed upon that the submission with respect to statement being not voluntary, was made at the original adjudication level itself. 3.1 The learned consultant further objected the allegation that appellant was admittedly charging 1% of IGST/Drawback claim and that the same has wrongly been made the criteria for imposing penalty on the appellant. The statement was otherwise involuntary. The appellant was introduced to M/s. Agogo Overseas by Shri Amit Batra of M/s. KP Logistics. However, appellant received KYC documents from the proprietor of the exporter firm. The premise of whole case against the appellant has been the alleged knowledge with respect to alleged overvaluation by the exporter. However, there is no such evidence nor even Shri Mali Ram Agarwal has stated about knowledge of over valuation with the appellant and about charging of 1% of IGST / drawback by the appellant. Further, the appellant in the appeal before Commissioner (Appeals), Customs Appeal No. 55029 of 2023 5 had made detail submissions explaining the legislative intention behind inserting Section 114AA in the Customs Act as per Ministry’s 27th Standing Committee of Finance (2005-2006) Report. Appellant challenged invocation of Section 114AA for imposition of penalty in the given facts and circumstances, inter alia, questioning invocation of Section 114(iii) as well. But the learned Commissioner (Appeals) completely ignored the submissions of the appellant in his ‘Discussion and Findings’. 3.2 Learned consultant further submitted that an admission is not conclusive to the truth of the matters stated therein. It is only a piece of evidence. The statement of the co-accused under Section 108 of the Act against the co-accused is a weak type of evidence and conviction of co-accused cannot be based on the uncorroborated statement of co-accused. It is a settled law that only on the basis of statements no case can be made out. The Appellant relied upon the following decisions: (i) Asst. Collr. Of C.Ex. Rajamundry Vs. Duncan Agro Industries Ltd, reported as 2000(120) ELT 280 (SC) (ii) Nagu Bai Amal and Others Vs. B. Sharma Roy and Others reported as AIR 1956 (SC) 593 With these submissions, the appeal is prayed to be allowed. 4. On the other hand, learned Departmental Representative has submitted that the appellant while being examined under Section 108 of the Customs Act, 1962 has acknowledged that the value of the imported goods appears to be enhanced. Not only this, there Customs Appeal No. 55029 of 2023 6 has been an admission of appellant that he used to receive 1% of the IGST/Drawback from the exporters, in cash, in lieu of preparing their export documents of the goods which were overvalued by them. Thus he was aware that the goods presented for export by the said three exporters were very low grade and were also grossly overvalued in their documents. The findings in the order under challenge are based upon the said admission. It is submitted that admissions need no further proof. Hence there is no infirmity in imposition of penalty upon the present appellant. 5. Having heard both the parties and perusing the records, I observe and hold as follows: 5.1 I observe that the appellant has been involved in an investigation against the overvalued export of LED Flash Light Torch, appellant being the Customs House Agent for those exporting firms. The penalty upon the appellant has been imposed under Section 114(iii) and 114AA of the Customs Act, 1962 i.e. for attempting to export goods improperly and for use of false and incorrect material respectively. Foremost I observe that ‘attempt’ ordinarily means an intent combined with an act falling short of the thing intended. It is an effort to accomplish a crime, amounting to more than mere preparation or planning for it, which, if not prevented, would have resulted in the full consummation of the act attempted, but which, in fact, does not bring to pass the party’s ultimate design. Thus, in order to constitute an act of attempt the act must possess following four characteristics: (i) It must be a step towards a punishable offence. Customs Appeal No. 55029 of 2023 7 (ii) It must be apparently adapted to the purpose intended. (iii) It must come dangerously near to success. (iv) It must not succeed. 5.2 I further observe that the allegations of attempt to export goods improperly have been confirmed against the appellant solely relying upon his statement alleging the same as the admission on part of the appellant. The copy of the said statement is produced by the department. Perusal thereof reveals that the appellant is admittedly the authorized CHA of the exporting firm, the main appellant. He produced all the requisite documents when demanded as that of packing list, invoices etc. as were provided to him by the respective exporters or their representatives. He also deposed that his firm prepared check lists of shipping bills on the basis of said documents and thereafter filed the same with the customs authority at ICD, TKD. This deposition clarifies that none of the ingredients of attempt appears to be fulfilled as against the appellant. There is no denial of the department that the detained consignment was tallying in quantity with the packing lists submitted along with the shipping bills. 5.3 Now coming to the alleged admission for overvaluation, I observe that the appellant in his statement has deposed that he is not aware regarding the actual value of the goods, however he accepted that supplier had overvalued the exported goods. In addition, he deposed that he was getting 1% of the IGST/Drawback from the exporters in cash in lieu of preparing export documents of the goods which were overvalued by them. However, except the Customs Appeal No. 55029 of 2023 8 said deposition, there is no corroborative evidence produced by the department to show the receipt of the said amount by the appellant as an additional amount to his professional charges and nor to show that the appellant had knowledge of overvaluation being done by the exporters prior filing the shipping bills. 5.4 No doubt the department has taken the stand that admissions need not to be proved but it has also been the settled proposition of law that such admissions which are voluntary and does not get vitiated on account of any of the premises envisaged Section 24 of the Evidence Act are admissible as cogent evidence. 5.5 Hon’ble Supreme Court in the case of Asstt. Collr. Of C. Ex., Rajamundry Vs. Duncan Agro Industries Ltd. reported as 2000 (120) ELT 280 (SC) has held that the inculpatory statement made by any person under Section 108 is to non-police personnel and hence it has no tinge of inadmissibility in evidence if it was made when the person concerned was not then in police custody. Nonetheless the caution contained in law is that such a statement should be scrutinised by the court in the same manner as confession made by an accused person to any non-police personnel. The court has to be satisfied in such cases, that any inculpatory statement made by an accused person to a gazetted officer must also pass the tests prescribed in Section 24 of the Evidence Act. If such a statement is impaired by any of the vitiating premises enumerated in Section 24 that statement becomes useless in any criminal proceedings. 5.6 The Hon’ble Supreme Court also appreciated that Section 108 of the Customs Act does not contemplate any magisterial Customs Appeal No. 55029 of 2023 9 intervention. The power under the said section is intended to be exercised by a gazetted officer of the Customs Department. Sub- section (3) enjoins on the person summoned by the officer to state the truth upon any subject respecting which he is examined. He is not excused from speaking the truth on the premise that such statement could be used against him. The said requirement is included in the provision for the purpose of enabling the gazetted officer to elicit the truth from the person interrogated. There is no involvement of the magistrate at that stage. The entire idea behind the provision is that the gazetted officer questioning the person must gather all the truth concerning the episode. If the statement so extracted is untrue its utility for the officer gets lost. The Hon’ble Supreme Court also held that statement recorded by customs officers under Section 108 of the Customs Act is admissible in evidence, however, the court has to test whether the inculpating portions were made voluntarily or whether it is vitiated on account of any of the premises envisaged in Section 24 of the Evidence Act. 5.7 Earlier also the Hon’ble Supreme Court in the case of Ramesh Chandra Mehta vs. State of West Bengal [AIR 1970 SC 940 = 1969 (2) SCR 461] has held that “when an inquiry is being conducted under Section 108 of the Customs Act, and a statement is given by a person against whom the inquiry is being held it is not a statement made by a person accused of an offence and the person who gives the statement does not stand in the character of an accused person.” This was followed by the Apex Court in Percy Rustomji Basta vs. The State of Customs Appeal No. 55029 of 2023 10 Maharashtra [1983 (13) ELT 1443 (SC) = AIR 1971 SC 1087 = 1971 (1) SCC 847]. 5.8 Further I observe that as per department, the statement of Shri Mali Ram Agarwal is a corroboration to the confession of the appellant. However, testimony of any statement recorded in the present case cannot be relied upon for the imposition of penalty unless it stands the test of Section 138B of the Customs Act, 1962 which is para materia to sub-section (1) of Section 9D of the Central Excise Act. The plain reading of both these provisions makes it clear that clause (a) and (b) of the said sub-section set out the circumstances in which a statement made and signed by a person before the officer of a gazetted rank, during the course of enquiry or proceeding under the act, shall be relevant for the purpose of proving the truth of the facts contained therein provided that the person making the said statement has been examined by the adjudicating authority. Section 9D came in for detailed consideration and examination by Hon’ble Delhi High Court in the case titled as J.K. Cigarettes Ltd. Vs. CCE reported as 2009 (242) E.L.T. 189 (Del.), it has been held that in absence of the circumstances specified in Section 9D(1), the truth of the facts contained in any statement recorded by the gazetted officer is not admissible into evidence. The evidentiary value of the statement insofar as proving the truth of the contents thereof, gets lost completely. This decision has been followed by Hon’ble High Court of Punjab and Haryana in the case of Jindal Drugs Pvt Ltd Vs. Union of India reported as 2016 (340) ELT 67 (P&H). Customs Appeal No. 55029 of 2023 11 5.9 In the light of the said discussion and that the statement of Shri Mali Ram Agarwal has not stood the test of Section 138B of the Customs Act, also that the appellant has objected his statement recorded under Section 108A as involuntary, recorded under pressure. Resultantly, I hold that the statements on record are miserably insufficient to prove the alleged act of attempt to export improperly and to use the false information is wrong. For appellant’s alleged admission also since same stands retracted subsequently no evidentiary value can be attached that too in absence of any corroborative evidence. 5.10 The burden to produce the evidence (corroborative) was still upon the department and same is required to be discharged effectively as it was held by the Principle Bench of this Tribunal in the case of Vikram Cement Pvt. Ltd. Vs. Commissioner of Central Excise, Kanpur reported as 2012 (286) ELT 615 (Tri. Del.). This Tribunal in another case of Tejal Dyestuff Industries reported as 2007 (216) ELT 310 (Tri.) held that the revenue cannot make its case on the basis of statement alone in the absence of any independent evidence to corroborate the same. The said decision was confirmed by Hon’ble High Court of Gujarat in the decision reported as 2009 (234) ELT 242 (Guj.). In the present case also there is no corroborative evidence to the alleged admission of the appellant that 1% of IGST/Drawback has been received by the appellant in lieu of committing the alleged act. 6. In the light of above discussion, I hold that the department has failed to prove the guilt of the appellant who otherwise was the authorized CHA, had all the KYC documents and had filed the Customs Appeal No. 55029 of 2023 12 shipping bills based on the documents provided to him by the respective exporter or their representative and that he was not personally sure about the value of the goods imported. I hereby set aside the order of imposition of penalty upon the appellant. With this discussion, the appeal stands allowed. [Order pronounced in the open court on 20.03.2025] (DR. RACHNA GUPTA) MEMBER (JUDICIAL) HK "