2023 (7) TMI 486 - AT - Customs

Tribunal overturns gold smuggling penalty citing lack of evidence, emphasizes need for thorough investigation

The Tribunal allowed the appeal in a case involving alleged smuggling of gold. The Adjudicating Authority's decision to confiscate the gold and impose a ... Smuggling - Gold Biscuits - Ceilling fan motor of Pooja Brand which has no commercial value - veracity of the Appellant’s claims that goods were procured legally - proper corroborative evidence not produced by Revenue - violation of principles of natural justice - HELD THAT:- There is no dispute that the Appellant was intercepted at Imphal Airport and three gold biscuits were recovered from him. The proceedings initiated by the Department resulted in the Show Cause Notice being issued to the Appellant as well as to Chhotelal Choudhury. The Department has heavily relied on the so called confessional statement of the Appellant. The only corroborative evidence cited is the Test Report by Assam Hallmarking Centre, Guwhati. The copy of such Test Report, is not made available anywhere in the entire proceedings to the Appellant - it is seen from the OIO that admittedly a letter of follow up investigation was sent to Jurisdictional Commissioner, Jaipur requesting them to conduct follow up investigation on the Appellant as well as on Chhotelal Choudhury. The OIO records at Para 17 that no reply was received from the Jaipur Commissionerate. Thus, it is clear that no follow-up investigation was taken up either against the Appellant or against the other noticee, Chhotelal Choudhury. Therefore, it is seen that the Department has proceeded solely relying on the purported confession statement of the Appellant without carrying out any further investigation to corroborate the Department’s allegations. Reliance placed in the case of SHRI DALEEP KUMAR VERMA PROPRIETOR OF M/S. SHREEJI TRADERS & MANUFACTURE, SHRI ROHIT KUMAR SURI AND SHRI KARAN SEHDEV PROPRIETOR OF M/S. K.S. TRADERS & ENTERPRISES VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) , SHILLONG [2023 (5) TMI 348 - CESTAT KOLKATA] where it was held that It is incorrect to rely only on the statements of the co-accused without any corroboration, to prove the smuggled nature of the gold. It is a settled law that the statement of the co-accused cannot be relied without any independent corroboration. - Even in the present case as can be observed from the factual matrix, the Department has not brought in any proper corroborative evidence and the proceedings initiated had many flaws resulting in non-following of principles of natural justices. Appeal allowed. Issues: Alleged smuggling of gold, violation of natural justice, reliance on confessional statement without corroborative evidence, lack of follow-up investigation.Summary:The Appellant was caught carrying gold biscuits weighing 498 grams while traveling from Imphal to Jaipur. The Adjudicating Authority confiscated the gold and imposed a penalty, based mainly on the Appellant's purported confessional statement. The Appellant argued that proper procedure was not followed, important documents were not provided, and the gold was procured legally. The Adjudicating Authority failed to consider evidence supporting the Appellant's claim and did not conduct a thorough verification. No follow-up investigation was completed, and the case heavily relied on the lone confession statement. The Tribunal, citing a similar case law, found that the Department's allegations were not legally sustainable and the penalty imposed was unjustified.The Department argued that the Appellant intended to transport smuggled gold, citing discrepancies in the purchase invoices and lack of proper documentation. The lower Authorities upheld the confiscation and penalty, emphasizing the Appellant's suspicious behavior and lack of proper explanation for the gold's origin.After hearing both sides and examining the documents, the Tribunal found that the Department's case lacked proper corroborative evidence and violated principles of natural justice. The Department's reliance on the confession statement without further investigation was deemed insufficient. The Tribunal set aside the impugned order and allowed the Appeal, highlighting the importance of independent corroboration in such cases.