2026-VIL-1808-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Evidentiary value of statement of the director of a Custom House Agent recorded under Section 108 of the Customs Act, 1962 where procedure under Section 138B was not followed - Importers imported broken substandard areca nuts declared under a tariff item for processed preparations to claim an exemption Notification, the goods were seized as liable to confiscation and prohibited, and the director of the Appellant, the common CHA, admitted in his statement that the importers were advised to adopt the declared tariff item to clear goods at minimum duty - Appellant contended that a statement which has not undergone the test of Section 138B cannot be the sole basis for penalty - Whether the statement recorded under Section 108 can be relied upon to impose penalty on the CHA - HELD - Section 108 treats the proceedings as judicial proceedings and a voluntary confession made to a customs officer is admissible as substantive evidence, since customs officers are not police officers and the bar under the Indian Evidence Act on police confessions does not apply, as reaffirmed by the Hon'ble Supreme Court. There was no retraction of the statement by the Appellant, its director or the importers, and no evidence of coercion was produced. The statement stood corroborated by laboratory reports on the nature and moisture content of the goods and by the unretracted statements of the importers - The statement is voluntary, admissible and reliable, and the objection based on Section 138B is rejected - Penalty on Custom House Agent under Sections 112(a) and 114AA of the Customs Act, 1962 for advising misclassification of imported goods - Penalties were imposed on the Appellant CHA and its director for abetting improper importation by knowingly advising incorrect classification to wrongly avail an exemption Notification - Appellant contended that it only reproduced the importers' documents while filing Bills of Entry and that there was no proof of knowledge, intent or mens rea - Whether penalties under Sections 112(a) and 114AA are imposable on the Appellant - HELD - The Appellant admitted advising the importers to adopt the incorrect tariff item to remain competitive and obtain more clearance business, which establishes that the advice was given knowingly and intentionally, and the decisions relied upon are inapplicable as they concern absence of knowledge. A CHA occupies a position of trust and the Hon'ble Supreme Court has held that contravention of its obligations, even without intent, invites punishment under the Regulations. Penalties under Sections 112(a) and 114AA are imposable where there is knowledge and intention on the part of the CHA to let the importer make illegal imports, which the Respondent has proved - The penalties on the Appellant and its director are upheld and the appeals are dismissed.
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