Order Date – 02 August 2022

Facts –

• The appellant, Dharmesh R Gathani is engaged in the business of trading of various import export incentive licences such as DEPB, VKGUY, FMS, etc. and consultancy services in relations to the Government’s various export incentive scheme.
• The appellant has provided license to M/s Hindalco Industries Ltd. On investigation by the DRI, 93 Licences out of 700 Licenses were found to be forged. Subsequently, the DRI has issued show cause notice dated. 05.11.2012 to M/s Hindalco along with the appellant for recovery of Customs duty and penalty imposing a penalty of Rs. 3,40,00,000/- under Section 112(a) and Rs. 1,45,00,000/- under Section 114AA of the Customs Act, 1962.
• Aggrieved filed this appeal against the Order-In-Original No. 02/Commr/DRI/2014 dated. 28.02.2014.

Issue –

• Whether imposing penalty solely based on statements of co-noticee without cross-examination justifiable?

Order –

• The Tribunal observed that the Commissioner does not have any clinching evidences against the Appellant. Merely because the disputed licences were sold through the Appellant, it cannot be concluded that Appellant was aware of fraudulent forgery of licences.
• The Tribunal further observed that the impugned order-in-original did not find any of the conditions specified under Sections 138B (1) of the Customs Act of 1962, thereby such statements without cross-examination of such witness became absolutely irrelevant. Consequently, the impugned order-in-original stands vitiated by breach of principles of natural justice.
• Relying up on Surinder Kumar Khanna v. Intelligence Officer Directorate of Revenue Intelligence opined that statements of said co-noticee cannot be adopted as a legal evidence to penalize the accused unless the same are corroborated in material particulars by independent evidence.
• Thus, the Tribunal set aside the impugned order and allowed consequential relief.