Tribunal Overturns Rs. 50 Lakh Penalty on Alleged Gold Smuggling Case

CESTAT Rules Exculpatory Statement of Co-Accused Insufficient for Penalty Without Corroborative Evidence

In a significant ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Eastern Zonal Bench in Kolkata has overturned a Rs. 50 lakh penalty impo sed on Shri Dharanidhar Ghosh. The penalty, levied under Section 112(b) of the Customs Act, 1962, was based on the sole confession of a co-accused, Ratan Biswas, without any independent corroboration.

The case dates back to October 5, 2016, when Ratan Biswas was apprehended at Sealdah Railway Station with 33 gold biscuits. During interrogation, Biswas claimed that Ghosh handed over the gold to him. Despite searches at Ghosh's residence yielding no incriminating evidence, the Commissioner of Customs (Preventive), West Bengal, imposed a hefty penalty on Ghosh based on Biswas's statement.

Upon appeal, CESTAT scrutinized the evidence and underscored that the statement of a co-accused, especially when exculpatory, cannot form the sole basis for imposing penalties without corroborative evidence. The Tribunal noted that the investigation lacked independent evidence linking Ghosh to the alleged crime, and the purported use of a mobile number by Ghosh was unverified, being registered in someone else's name.

The Tribunal's decision aligns with several precedents, including the Supreme Court ruling in Mohtesham Mohd. Ismail v. Special Director, Enforcement Directorate, emphasizing the necessity of corroborative evidence to support a co-accused's confession.

The ruling serves as a reminder of the judiciary's role in ensuring fair application of the law, highlighting the critical need for substantive evidence before imposing penalties in smuggling cases.

Bottom Line:

Penalty under Section 112(b) of the Customs Act, 1962 cannot be imposed solely on the basis of the exculpatory statement of a co-accused without any corroborative evidence.

Statutory provision(s): Customs Act, 1962 Section 112(b)

Shri Dharanidhar Ghosh v. Commissioner of Customs (Preventive), (CESTAT)(Eastern Zonal Bench Kolkata)(Regional Bench) : Law Finder Doc Id # 2822392