The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai West Zonal Bench, has allowed an appeal filed by the widow and successor-in-interest of a deceased Customs Hawaldar and set aside personal penalties totalling ₹3.5 lakh imposed under Section 112(a) of the Customs Act, 1962.
The bench of Dr. Suvendu Kumar Pati (Judicial Member) has observed that the deceased officer could not be implicated merely on the basis of statements of co-accused, call records and circumstances that did not conclusively establish his involvement in the alleged gold-smuggling operation.
The dispute originated from a DRI Customs seizure of smuggled gold at Pune International Airport on August 16, 2018. Acting on specific intelligence, Customs authorities recovered gold from the dustbin of the men’s toilet in the Immigration Hall. The alleged smuggling was connected with passengers travelling from Dubai to Pune on SpiceJet Flight SG 52.
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The deceased appellant, Rajendra Bane, was working as a Customs Hawaldar. Although he was on sanctioned leave and was at his native place near Ratnagiri on the date of the incident, the Department alleged that he had facilitated the smuggling operation and had assisted the smugglers on previous occasions as well.
The Department relied upon statements recorded under Section 108 of the Customs Act, statements of co-accused/accomplices, service-provider call records, recovery of gold from the airport toilet and recovery of gold from a passenger. On that basis, a show-cause notice was issued and penalties under Section 112(a) were imposed. The penalties of ₹2.50 lakh and ₹1 lakh were subsequently confirmed by the Commissioner (Appeals).
Widow challenges penalty after death of Customs officer
Following the death of Rajendra Bane, his widow, Ranjita Rajendra Bane, pursued the matter as his successor-in-interest before the Tribunal.
The defence maintained that the deceased officer was innocent and that his conduct had been wrongly interpreted as evidence of involvement in smuggling. According to the defence, Bane had actually attempted to alert the Customs authorities regarding the presence of smuggled gold.
The appellant’s case was that the deceased had attempted to communicate information to the Superintendent on duty at Pune Airport during the early hours of August 16, 2018. The information allegedly related to the gold concealed in the airport premises. The defence also argued that the timing of the calls had not been properly investigated because the Department had relied upon call data for only a limited period.
The Commissioner (Appeals) had rejected the defence and concluded that statements of the co-accused could be relied upon because they were corroborated by Subscriber Detail Records (SDRs), Call Detail Records (CDRs) and recovery of gold from the airport toilet.
The Commissioner relied upon the Supreme Court’s decision in Naresh J. Sukhwani v. Union of India, reported at 1996 (83) ELT 258 (S.C.), to hold that a statement recorded under Section 108 of the Customs Act constitutes material evidence collected by Customs authorities and can be used to connect a person with a contravention of the Customs Act.
The Commissioner (Appeals) also rejected the argument concerning the telephone call made by Bane to the Superintendent. It was viewed as an afterthought intended to camouflage his alleged role in aiding and abetting smuggling.
According to the appellate authority, if Bane had genuinely received information about the smuggling, he should have immediately approached other senior officers after the Superintendent did not respond to his first call. Since there was no evidence that he had done so, the Commissioner treated the conduct as supporting the Department’s case.
The Tribunal took a different view of the evidentiary circumstances.
CESTAT observed that the Supreme Court judgment in Naresh J. Sukhwani had been rendered in a different factual context. The Tribunal noted that, in the present matter, there was no seizure of any incriminating material from the deceased appellant and even the SIM card allegedly connected with the smuggling syndicate was not seized from his possession.
The Tribunal therefore held that the statement of an accomplice could not, in the circumstances of the case, by itself establish the deceased officer’s involvement. It referred to the evidentiary principle that an accomplice’s statement requires corroboration in material particulars.
A significant factor considered by the Tribunal was the timing of telephone calls.
The record showed that the Superintendent of Customs, D.G. Nandanwar, had called the deceased officer back after noticing a missed call. The Tribunal noted that the investigation had produced call records for the period between 5 a.m. and 6 a.m., but there were also calls involving the mobile number of the deceased officer’s son between approximately 3:04 a.m. and 5:33 a.m.
According to the Tribunal, these earlier calls were relevant because the seizure was effected at approximately 5:15 a.m.The Tribunal observed that the available material did not conclusively establish that the deceased officer’s call to the Superintendent was merely a post-seizure attempt to conceal involvement.
CESTAT found that two substantially contradictory versions existed.
Under the defence version, the deceased Customs officer was an informer whose information contributed to the recovery of more than 13 kg of gold, including approximately 10 kg recovered from the dustbin of the men’s toilet after information was passed to the Superintendent.
The Department, on the other hand, alleged that the officer was acting in connivance with smugglers and that his telephone call providing information was merely an afterthought because the DRI had already received intelligence regarding the transaction.
The Tribunal found that the circumstances did not justify placing the deceased officer in the category of a co-accused or accomplice for the purpose of imposing a penalty under Section 112(a).
It particularly noted that the absence of seizures from passengers inside the airport and the circumstances surrounding the recovery did not conclusively establish the Department’s version of the transaction.
The Tribunal also disagreed with the Commissioner (Appeals)’ reasoning that the deceased officer’s failure to contact another senior officer after the Superintendent initially missed his call established that the call was an afterthought.
CESTAT observed that the Department itself had not investigated whether the deceased officer had attempted to contact any other officer. Further, considering his position as a Hawaldar within the departmental hierarchy, the Tribunal found it unreasonable to expect him, at such an early hour, to bypass his immediate superior and approach a higher-ranking officer when he might not even have known which officer was on duty.
Another allegation concerned the alleged use of a mobile number belonging to a person named Krushikesh Jadhav, stated to be associated with the gold-smuggling syndicate.
The deceased officer had denied using the number in his Section 108 statement. The Tribunal noted that no documentary evidence or seizure established that the SIM card was actually in his possession.
The only material relied upon was that the SIM had allegedly been used in an area covered by a mobile tower near the deceased officer’s native village. CESTAT held that such evidence could amount only to suspicion or presumption and could not establish the officer’s involvement.
The Tribunal ultimately emphasised the settled legal principle that strong suspicion cannot substitute proof.
It held that neither the failure to inform another higher officer after the Superintendent allegedly missed the first call nor the fact that a particular mobile number was detected through a tower located near the deceased officer’s native village was sufficient to establish his guilt.
The Tribunal concluded that the available evidence did not establish the deceased officer’s involvement in the smuggling operation to the required standard.
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