Admissibility of DVD, Retracted Statements from Co-Accused Questioned: CESTAT Rules S.114AA Cannot be Imposed [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, decided on the admissibility of DVD and retracted statements from co-accused as evidence. The matter was appealed with respect to an order in which penalties under Section 114AA of the Customs Act, 1962 (the Act) were upheld.

The facts of the case are that a DVD was found at the premises of Spak Enterprises Pvt. Ltd. of Ajaya Kumar Mohapatra, along with other incriminating documents. This had data relating to export through theLand Customs Station. Mr. Mohapatra stated that the DVD belonged to Jyoti Biswas.

Two months later, search and seizure from the house of Jyoti Biswas took place and his statement was recorded on 22.09.2016. He voluntarily stated his involvement in fabricating documents for export of items to Bangladesh during 2012-13 and 2013-14 along with other departmental officers namely Vikash Kumar (the appellant). The fabricated documents had drawback benefits deposited in them which were taken by Jyoti Bisas and given to the appellant.

Show cause notices were issued on 10.01.2018 which proposed the imposition of penalties on the appellant under Section 114AA of the Act. The imposition of penalties were confirmed and the appellant challenged the Orders. The Commissioner of Customs rejected the appeals and the appellant appealed before the CESTAT.

The counsel for the appellant clarified the sequence of events, submitted that the Revenue is misleading the recovery process and that the DVD was broken within the sealed cover. The counsel also submitted that the reliance on the statements by the co-accused is not in line with Section 138 of the Act and cannot be valid evidence to be relied upon.

The Revenue department, through their counsel, responded that the appeal is not maintainable as per Section 129A.

Since the appellant did not appeal against the drawback, the appeal was held to be maintainable by the tribunal. It was also held that the information available in the said DVD cannot be relied upon as admissible evidence in absence of compliance of Section 138C. The CESTAT noted that retracted statements by Jyoti Biswas were not proved by the Revenue and consequently, cannot be relied upon.

Hence, the bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) allowed the appeal and held the orders imposing penalties under Section 114AA unsustainable.

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