Taxpayer’s Voluntary Confession Makes Cross-Examination Unnecessary: CESTAT Upholds Smuggled Foreign Origin Cigarettes Confiscation [Read Order]
CESTAT upheld confiscation and Rs. 25 lakh penalty on Hira Singh, ruling that cross-examination was unnecessary after his voluntary confession to smuggling foreign-origin cigarettes.
![Taxpayer’s Voluntary Confession Makes Cross-Examination Unnecessary: CESTAT Upholds Smuggled Foreign Origin Cigarettes Confiscation [Read Order]](https://images.taxscan.in/h-upload/2025/06/29/2056175-taxscain-38.webp "Taxpayer’s Voluntary Confession Makes Cross-Examination Unnecessary: CESTAT Upholds Smuggled Foreign Origin Cigarettes Confiscation [Read Order]")
The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld the confiscation of smuggled foreign-origin cigarettes and the imposition of a penalty, holding that cross-examination was not necessary as the taxpayer had voluntarily accepted his involvement in the offence.
Hira Singh, the appellant, was the proprietor of Star Express Enterprises, a transport company operating from Delhi. Acting on specific intelligence, DRI officers intercepted a mini truck outside the appellant’s godown on 21.12.2018. The truck was officially carrying metal planters, but upon inspection, 21.6 lakh sticks of foreign-origin cigarettes were recovered from the truck, and another 3.41 lakh sticks from the godown premises. Foreign-origin cigarettes were also found at the appellant’s residence. No valid import or transport documents were produced for any of these goods.
The panchnama was drawn on the same day, and statements of the driver, helper, and other persons were recorded under Section 108 of the Customs Act. The appellant’s counsel also gave a detailed statement admitting that the appellant regularly received smuggled cigarettes from a person named Hamid Bhai and distributed them to various transporters under instructions from another associate. They also explained that payments were made through informal hawala channels and acknowledged that he knew the goods were smuggled.
A show cause notice was issued proposing confiscation and penalties. The adjudicating authority confirmed the proposals, confiscated the goods under Section 111(d) of the Customs Act, and imposed a penalty of Rs. 25,00,000 on the appellant under Section 112(b)(i). The Commissioner (Appeals) upheld the order. Aggrieved, the appellant approached the CESTAT.
The appellant’s counsel argued that the panchnama was defective and lacked critical details, such as who opened the godown or who supervised loading and unloading. They further argued that the statement under Section 108 was obtained under coercion and that the denial of cross-examination of key witnesses like the truck driver and supplier agents violated principles of natural justice.
The department countered that the panchnama was detailed and properly witnessed, and the confession was voluntary and consistent. They argued that no prejudice was caused by denying cross-examination.
The single-member bench comprising Binu Tamta (Judicial Member) held that the appellant’s confession was voluntary and could serve as the sole basis for confirming the charges. The tribunal ruled that cigarettes, being notified goods under Section 123, placed the burden of proof on the appellant, who failed to produce any import documents. It also upheld the valuation based on market inquiry. The tribunal found no merit in the appeal and dismissed it, upholding both the confiscation of goods and the penalty.
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