[Order per : Archana Wadhwa, Member (J)]. - The challenge in the present appeal is to imposition of penalty of Rs. 10 lakhs on the appellant, who is a resident of Dubai, in terms of Section 114(i) of the Customs Act, 1962.

2. After hearing both the sides duly represented by Shri Karan, Advocate and Shri Pakshi Rajan, Assistant Commissioner (AR), we find that the appellant is a citizen of India but permanently residing in Dubai for the last 20 years in connection with his business. As per facts on record, a container presented for export at International Container Transshipment Terminal, Cochin, on 16-11-2012, was opened and instead of the declared goods as cargo of coir pith, red sander logs were found to be stuffed. The same were seized by the officers on 17-11-2012 and further investigations were conducted.

3. As the shipping bill in respect of the said container was filed by one Shri Yousef Moideen, Proprietor of M/s. Suweihan Exporting, Desamangalam, Trichur, he was summoned by the officers for recording of his statement. As per Shri Yousef Moideen, IE code was taken by him in the name of M/s. Suweihan Exporting as per the instructions of one Shri Musthafa whom he met while working in Gulf. The said IE code was obtained with an intention to import readymade wooden doors. As the import of wooden doors was an expensive affair, the same could not be done. Shri Musthafa introduced him to one Shri Karunakaran @ Kannan hailing from Chennai who wanted to export goods on behalf of M/s. Suweihan Exporting. Shri Kannan offered him to pay an amount of Rs. 15000/- to Rs. 25000/- for each consignment of red sanders which would be exported clandestinely. For the said purpose, he leased a godown in Pollachi for storing coir pith and there he met Shri Jayan, an agent in Cochin and Shri Prakash @ Senthil. As regards the present consignment, he gave the details of various meetings and how the consignment of red sanders was misdeclared as that of coir pith.

4. As a result of disclosure made by Shri Yousef Moideen, statement of Shri Karunakaran @ Kannan was recorded on 17-11-2012. He gave the details of renting of godown, procurement of red sander logs, his introduction to Shri Yousef Moideen. He also deposed that as per directions of Shri Moideen, he contacted one Shri Antony Morris of M/s. AGL Forwarders, Cochin, for logistic arrangement for export of red sanders, who agreed to arrange the container and trailer and also to help them in clearing red sanders for export. He also deposed that Shri Antony Morris introduced him to Shri Jayan who was assisting him in all activities along with Shri Prakash @ Senthil. He also gave the details of the previous exports of red sanders.

5. The statement of Shri Prakash @ Senthil was recorded on 17-11-2012 wherein he accepted the details given in the statement of Shri Kannan. Statement of Shri Suresh Kumar, Driver of the container trailer was also recorded.

6. On the basis of the disclosures made by Shri Yousef Moideen, Shri Kannan and Shri Senthil, Shri Antony Morris, resident of Cochin was summoned and his statement was recorded on 17-11-2012. In the said statement, he deposed that he met Shri Kannan for the first time in Willingdon Island around 10 months ago; that his details were given to Shri Kannan by Shri Moideen of Hongkong, who in turn got the said details from one Shri Shafeek of Thalassery (the appellant in the present case); that he knew Shri Shafeek for the last 6 years but does not know his address; that Shri Shafeek was currently doing business in Dubai; that he discussed about logistic support and clearing facilities for smuggling of red sanders to Dubai with Shri Kannan and he agreed to arrange containers and trailers and also to help in clearing of export consignments containing red sanders. He also gave further details of Shri Jayan, Shri Musthafa and Shri Ashraf. The said Shri Antony Morris subsequently retracted his statement on 21-11-2012 by alleging that he was tortured and forced to make submissions. The said allegations made by Shri Antony Morris were found to be false by the Deputy Director, DRI, Cochin.

7. Thereafter the statements of various persons were recorded. In the subsequent statements, no deponents had named the appellant, and as such, the same are not being reproduced here, as the Revenue’s case solely rests upon the statements of Shri Antony Morris. Based upon the above, proceedings were initiated, inter alia, against the appellant for imposition of penalty upon him. During the course of adjudication, the appellant through its advocate, contended that Shri Shafeek is not at all connected with the smuggling activities of red sander logs inasmuch as he was staying in Dubai for the last 20 years and rarely visited India; that he last visited India in July, 2012 for a period of about 7 days whereas the offence had actually taken place in November, 2012; that he has got nothing to do with the red sander logs seized by the Revenue; that the proposal to impose penalty upon him is only on the basis of the retracted statement of Shri Antony Morris which cannot be held to be a sufficient evidence against him, in the absence of any corroborative material; that none of the accused in their statements had assigned any role to the appellant except Shri Antony Morris; that sharing of the calls between two persons cannot be construed as corroboration or proved involvement of the appellant in the alleged offence; that even the statement of Shri Antony Morris is self-contradictory inasmuch as at one place he deposed that he does not know the address of the appellant and on the other hand, he has deposed that the export papers were sent to the appellant’s address; that he has no connection with the recipient of the goods shown in the shipping bills i.e. M/s. C.P General Trading, Dubai.

8. While dealing with the said submissions of the appellant, the Commissioner in his impugned order observed that as per the statement of Shri Antony Morris, it was the appellant, who introduced him to Shri Moideen, who in turn introduced him to Shri Kannan. As such, he concluded that the appellant provided the ring with link to Cochin. He further observed that although the appellant had not visited India after 26-7-2012, call data records of Shri Kannan and Shri Antony Morris during February, 2012 to November, 2012 obtained from the service providers showed that they were in contact with Shri Shafeek in Dubai, on a regular basis. He also referred to another case of smuggling in the past where red sanders were seized and statement of one Shri Anil Kumar was recorded wherein he had named the appellant as the person to whom the red sanders were to be exported. On the said basis, he held that the appellant is liable to penalty and imposed penalty of Rs. 10 lakhs under Section 114(i) of the Customs Act.

9.1. Learned Advocate Shri Karan appearing for the appellant has assailed the impugned order on the point of jurisdiction as also on merits. It is the contention of the appellant that admittedly he is a resident of Dubai and has been staying there for over two decades. Even at the time of export of the alleged prohibited goods, i.e. in November, 2012, he was not in India. His last visit to India was only in July, 2012 and that too for a limited period of 7 days. He submits that inasmuch as the provisions of Customs Act, 1962 extend only to the whole of India, the same cannot be invoked and made applicable to a person who is resident of Dubai. For the above purposes, he relied upon Tribunal’s decision in the case of C.K. Kunhammed v. CCE [ (Tribunal)] observing as under : -

6. I have carefully considered the submissions made before me. So far as appellant C.K. Kunhammed is concerned, admittedly he was abroad not only at the alleged time of commission of offence but also continued to be there even later to the commission of offence and till date. Assuming for the purpose of argument that appellant C.K. Kunhammed had entrusted the gold biscuits in a foreign country, Doha that would not be an offence coming within the mischief of the Customs Act, 1962. The provisions of the Act extend only to the whole of India and not beyond India. Apart from it, the Collector of Customs & Central Excise, Cochin also has no jurisdiction under law to try a person in respect of something which was committed beyond India and in a foreign country which will not come within the mischief of the provisions of the Customs Act, 1962. … … ….

9.2. Apart from above, he submits that there is a specific provision in Section 1(3) of the Foreign Exchange Regulation Act, 1973 specifically providing that the same applies to all citizens of India outside India and to branches and agencies outside India of companies or bodies corporate, registered or incorporated in India. Similar provisions are also available in Sections 3 and 4 of IPC whereas no such provision exists in the Customs Act, 1962. In the absence of any identical provisions in the Customs Act, the same cannot be invoked against a resident of a foreign country, even though an Indian.

9.3. As regards merits of the case, he submits that entire case of the Revenue is based upon the retracted statement of a co-accused Shri Antony Morris. There also he has simplicitor deposed that he was introduced to Shri Moideen of Hongkong through the appellant. However Shri Moideen of Hongkong has not been found by the officers. He further submits that even the said statement of Shri Antony Morris is self-contradictory inasmuch as at one place, he deposed that the documents for the export has been sent by him to Shri Shafeek whereas in answer to another question, he deposed that he does not have the address of Shri Shafeek. Such a discrepancy in the statement of Shri Antony Morris evidently leads to a fact that Shri Shafeek i.e. appellant is not at all connected with the attempted smuggling of red sanders. In any case, it is well settled law that in the absence of any independent corroboration, the statement of co-accused cannot be made the basis for implicating the noticee. He further submits that the statements were retracted by Shri Antony Morris alleging torture to him and such statement cannot be made basis for penalizing the appellant.

10. Learned DR appearing for the Revenue reiterates the reasonsings adopted by the Commissioner and submits that the appellant is the kingpin sitting in Dubai, engaging himself and organizing everything for illegal export of the red sanders.

11.1 We have considered the submissions made by both the sides. After having gone through the facts of the case, we find that subsequent to the detection of the matter at International Container Transshipment Terminal and seizure of the red sanders, detailed investigations were made by the Revenue. As per records, the shipping bill was filed by one Shri Yousef Moideen, Proprietor of M/s. Suweihan Exporting for export of goods to M/s. C.P. General Trading, LLC, Deira, Dubai. Admittedly, the shipping bill was not in the name of the appellant. The statements of Shri Yousef Moideen, Shri Kannan, Shri Prakash @ Senthil, Shri Suresh Kumar and the other persons recorded during the course of investigations have not named the appellant at any point of time. It is only Shri Antony Morris, in his statement recorded on 17-11-2012, deposed that he met Shri Kannan for the first time around 10 months ago and his details were given to Shri Kannan by one Shri Moideen of Hongkong, who in turn got the said details from Shri Shafeek of Thalassery. Even Shri Morris, in his said statement, has nowhere attributed any role to Shri Shafeek about the alleged attempt of export of red sanders. The statement simplicitor reveals that he was introduced to Shri Kannan by Shri Moideen of Hongkong, who in turn was introduced through Shri Shafeek. It is a fact on record that Shri Moideen of Hong Kong was untraced by the Customs authorities. In any case, we find that introduction of one person to another person who is subsequently found involved in illegal activities cannot be considered to be an offence so as to impose penalty upon him under the provisions of the Customs Act.

11.2. In any case, the statement of Shri Antony Morris does not inspire confidence inasmuch as at one place he had deposed that he knew Shri Shafeek for the last 6 years but does not know his address and at the other place he had deposed that the papers for clearance of red sanders were sent to the address of Shri Shafeek. The said part of the statement is admittedly a self-contradictory statement and cannot be adopted as a reason for penalizing the appellant.

11.3. Otherwise also, we find that the entire case of the Revenue rests upon the sole retracted statement of Shri Antony Morris. Even if according to the Revenue, the said retraction was only a mechanical retraction and as an afterthought, inasmuch as no force was used to obtain the same, we find that as per the settled law, statement of a co-accused cannot be held as sufficient to nail another person, unless there is an independent corroborative evidence to that effect. The adjudicating authority has nowhere doubted that the appellant was in Dubai during the period of seizure and had only visited India during the last week of July, 2012. However he has relied upon the call data records showing telephonic talks between the appellant with Shri Kannan and Shri Antony Morris. What was the subject matter of the conversations during the call records has not come on record. Merely on the basis of such call records, it cannot be concluded that the appellant was the kingpin of smuggling operations, as concluded by the adjudicating authority. It may be observed here, even at the cost of repetition, that except Shri Antony Morris, no other person has named the appellant in the detailed statements recorded by the Revenue. If the goods were meant for the appellant, admittedly the other concerned and connected accused persons would have known about him and would have disclosed the name of the appellant. Not even Shri Kannan, who according to the Revenue, is the kingpin of smuggling operations in India, had mentioned about the appellant. As such, we agree with the learned advocate that the retracted statement of a co-accused cannot be adopted as an evidence to conclude against the appellant, without any other independent corroborative evidence.

11.4. It may not be out of place to mention that the Commissioner for arriving at the findings against the appellant had also referred to the statement of one Shri Anil recorded during the earlier seizures of red sanders in an attempted export case. Apart from the fact that the said statement of Shri Anil in those cases is still at the adjudication stage, we are of the view that the said statement recorded in an altogether different case, cannot be adopted as an evidence in the present case. It is well settled that the evidences available in a particular case have to be taken into consideration for deciding disputed issue. No reference can be made to the earlier statements or the statements of any other person so as to conclude against the accused in a particular case, which is not at all connected with the cases in which statements of other persons were recorded.

11.5 It is also to be kept in mind that the shipping bill was filed showing the recipient as M/s. C.P. General Trading LLC, Deira, Dubai. There is no attempt by the Revenue to show that the said alleged recipient of the goods has any connection with the appellant. As such when the appellant’s name was not even shown as recipient, the imposition of penalty upon him based upon uncorroborated statement of one of the accused, without there being any independent, admissible and tangible evidence, is neither justified nor warranted.

12. In view of the foregoing, we find no reason to uphold that part of the impugned order of Commissioner for which he imposed penalty upon the appellant.

13. Apart from holding in favour of the appellant on merits, we also find favour with the submissions of the learned advocate that the appellant being a resident of Dubai for the last 20 years, the provisions of the Customs Act, 1962 which only extend to the whole of India, cannot be invoked. For the said purpose, reliance by the learned advocate on the decision in the case of C.K. Kunhammed (supra) is appropriate. Revenue has not been able to show us any other decision laying to the contrary. As such, we find favour with the appellant on the point of jurisdiction also.

14. As a result, the impugned order is set aside insofar as the same imposes penalty of Rs. 10 lakhs (Rupees ten lakhs only) on the appellant and the appeal is allowed with consequential relief.

(Pronounced on 8-9-2015)