2022 (8) TMI 335 - AT - Customs

Gold smuggling scheme confirmed: Tribunal upholds penalties.

RAMESHBHAI LAKHABHAI PATEL AND NARESHBHAI B SAVALIYA Versus Commissioner of Customs, Ahmedabad

RAMESHBHAI LAKHABHAI PATEL AND NARESHBHAI B SAVALIYA Versus Commissioner of Customs, Ahmedabad - TMI Issues:- Concealment of gold bars in imported embroidery machines- Admissibility of statements recorded by DRI officers- Imposition of penalties under Section 112(a) of the Customs Act- Excessive penalty amount- Involvement of appellants in smuggling activitiesConcealment of gold bars in imported embroidery machines:The case involved the concealment of 25 gold bars in two imported computerized embroidery machines. The DRI officers discovered the gold bars during a detailed examination at Hazira port. The investigation revealed that the appellants were involved in the smuggling operation, with Shri Nareshbhai Savaliya masterminding the smuggling by concealing the gold bars in the embroidery machines. The adjudicating authority ordered the absolute confiscation of the gold bars under various sections of the Customs Act, 1962. The appellate tribunal upheld the confiscation, citing the illicit nature of the transaction and the appellants' involvement in the smuggling scheme.Admissibility of statements recorded by DRI officers:The appellants contested the admissibility of the statements recorded by the DRI officers, arguing that the statements were obtained under pressure and duress. The appellants' counsel emphasized that none of the statements met the mandatory requirements under Section 138B of the Customs Act to be considered admissible evidence. The appellants relied on several legal precedents to support their argument, asserting that the statements should not have been relied upon to establish the appellants' knowledge of the concealed gold bars. However, the tribunal did not find merit in this argument and upheld the reliance on the statements as evidence of the appellants' involvement in the smuggling operation.Imposition of penalties under Section 112(a) of the Customs Act:The appellants challenged the imposition of penalties under Section 112(a) of the Customs Act, contending that they had not committed any act or omission that would render the goods liable for confiscation under Section 111. The appellants argued that since Section 111 was not applicable in their case, the basis for imposing penalties against them was unfounded. The tribunal, however, upheld the penalties imposed by the adjudicating authority, citing the appellants' active involvement in the smuggling activities as established by the evidence presented by the department.Excessive penalty amount:The appellants further argued that the penalty amount of Rs. 1 crore imposed on each of them was excessive and unreasonable given the circumstances of the case. They contended that even if the revenue's case against them was true, the penalty amount was disproportionate to the value of the goods liable for confiscation. The appellants sought to have the high penalties quashed in the interest of justice. The tribunal, however, did not find the penalties excessive, considering the gravity of the smuggling operation and the appellants' significant roles in the illicit scheme.Involvement of appellants in smuggling activities:Based on the evidence presented, including the statements recorded by the DRI officers, the tribunal found that both appellants were actively involved in the smuggling of the gold bars concealed in the embroidery machines. Shri Nareshbhai Savaliya was identified as the mastermind behind the smuggling operation, while Shri Rameshbhai Patel facilitated and abetted the illegal activity. The department provided sufficient evidence to establish the appellants' complicity in the smuggling scheme. Consequently, the tribunal upheld the penalties and the confiscation of the gold bars, rejecting the appeals as lacking merit.