Gold smuggling penalties reduced for two appellants while currency confiscation set aside due to insufficient evidence

CESTAT Kolkata allowed appeals partially in a gold smuggling case. The tribunal set aside confiscation of Indian currency worth Rs.46,00,000 and penalties on first two appellants due to lack of evidence linking them to smuggling activities. However, penalties on third and fourth appellants were upheld but reduced to Rs.5,00,000 each, as they were found in possession of 2.625 kg gold without valid import documents. The tribunal distinguished between prohibited and restricted goods, noting smuggled gold warranted lesser penalties than initially imposed.

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Issues Involved:
1. Confiscation of Indian currency u/s 121 of the Customs Act, 1962.
2. Imposition of penalties u/s 112 of the Customs Act, 1962 on various appellants.

Summary:

Confiscation of Indian Currency u/s 121 of the Customs Act, 1962:

The appellant no. 1 contested the confiscation of Rs.46,00,000/- seized from his residence, arguing it was family property meant for distribution among legal heirs. The Tribunal observed that the investigation failed to provide evidence that the currency was the sale proceeds of smuggled gold. The appellant no. 1 supported his claim with documents, and the Tribunal found no evidence to counter this claim. Citing precedents like Ramachandra v. Collector of Customs and Sudesh Kumar Mittoo v. Collector of Cus. & C.Ex., Jaipur, the Tribunal held that the confiscation of the Indian currency under Section 121 of the Customs Act, 1962, is not sustainable and ordered its release.

Imposition of Penalties u/s 112 of the Customs Act, 1962:

The Tribunal addressed the penalties imposed on the appellants as follows:

Appellant No. 1: The Tribunal found no evidence linking appellant no. 1 to the smuggling of gold. The penalty imposed under Section 112 of the Customs Act, 1962, was set aside.

Appellant No. 2: The Tribunal observed that there was no evidence to prove that 'Krishna Sarkar' and 'Krishna Pramanik' were the same person. Thus, the penalty imposed on appellant no. 2 was not sustainable and was set aside.

Appellant Nos. 3 and 4: The Tribunal noted that these appellants were caught with gold weighing 2.625 kgs without valid documents, establishing a 'reason to believe' that the gold was smuggled. However, considering the gold was not a prohibited item but a restricted one, the Tribunal deemed the penalties imposed as high. The penalties were reduced to Rs.5,00,000/- each.

Final Order: The Tribunal set aside the confiscation of Indian currency and penalties on appellant nos. 1 and 2, and reduced the penalties on appellant nos. 3 and 4 to Rs.5,00,000/- each.

(Order pronounced in the open court on 09.05.2024)

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