No Penalty can be imposed only on basis of Hearsay Evidence or Incriminating Statement of one of co-accused in Absence of other Corroborative Evidence: CESTAT [Read Order]

The Bangalore bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the penalty cannot be imposed only based on hearsay evidence, or the incriminating statement of one of the co-accused in the absence of other corroborative evidence. 

Rafeek K.T, the appellant assessee challenging the order issued by the Adjudication Authority imposing penalty on the assessee under Section 112 and 114 of the Customs Act, 1962 for the allegation of abetting the importer Pushpa Telecom to import goods illegally by resorting to undervaluation. 

M.S. Sajeev Kumar, the counsel for the assessee contended that there was no allegation that the assessee had prepared any invoice or evidence to substantiate the finding regarding the involvement of the assessee when the importer resorted to undervaluation. 

K. Vishwanath, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was liable for the penalty imposed by the department. 

The Bench observed that in the case of the case of Commissioner of Customs, Lucknow V/s Sanjay Soni, the court held that the assessee had not violated any of the provisions of the Customs Act including Section 111, and thus the penalty under Section 112 of the Customs Act was not attracted and the penalty cannot be imposed only based on hearsay evidence. 

A single-member bench comprising P A Augustian (Judicial) held that the assessee was not liable for a penalty imposed under sections 112 and 114 of the Customs Act. 

To Read the full text of the Order CLICK HERE

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