2026-VIL-887-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs – Imposition of Penalty on the basis of Third-Party Documents and Statements - Penalty under section 112(b) of the Customs Act for alleged clandestine purchase of goods – Appellant alleged to have received M.S. Ingots from a SEZ unit without payment of Customs duty - Based on ledger entries and statements of transporters recovered from third-party premises during search operations, Dept imposed penalty without recovering any incriminating evidence from the appellant's factory premises - Whether penalty under section 112(b) of the Customs Act can be imposed on the basis of third-party documents and statements - HELD - Penalty under section 112(b) of the Customs Act cannot be imposed as the statements recorded under section 108 of the Customs Act were relied upon without following the procedure contemplated under section 138B of the Customs Act, thereby rendering such statements irrelevant and unreliable - Further, third-party ledger entries and computer print-outs, being records of a third party neither belonging to nor maintained by the appellant, cannot form the basis for penalty imposition in the absence of independent corroboration and physical evidence recovered from the appellant's own premises. Additionally, the two mandatory conditions for imposing penalty, namely acquiring possession or being concerned with goods liable for confiscation and possessing knowledge or belief about such goods being liable for confiscation, are not satisfied as there exists no documentary, physical, or corroborative evidence establishing purchase, receipt, or dealing in the alleged goods by the appellant - The impugned order imposing penalty is set aside and the appeal is allowed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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