Penalty upheld for abetment in gold jewellery seizure case under sections 112(a) and 112(b)

CESTAT Hyderabad dismissed the appeal challenging penalty under sections 112(a) and 112(b) of the Customs Act. The appellant's association with co-accused persons regarding seized gold jewellery and attempt to claim ownership while covering up the seizure made him liable for penalty for abetment. The court upheld jurisdiction of Additional Commissioner, found no limitation breach due to COVID-19 relaxation as show cause notice was issued within extended timeline, rejected non-application of mind argument, and confirmed burden of proof shifted under section 123 after intelligence-based seizure from concealed compartment with inadequate documentation.

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Issues Involved:
1. Jurisdiction for issuance of show cause notice and Order-in-Original.
2. Validity of the seizure and confiscation of gold jewelry.
3. Imposition of penalty under Section 112(a) and 112(b) of the Customs Act.
4. Timeliness of the show cause notice issuance.
5. Allegation of non-application of mind by the Commissioner.

Detailed Analysis:

1. Jurisdiction for Issuance of Show Cause Notice and Order-in-Original:
The appellant argued that the Adjudicating Authority lacked jurisdiction to issue the show cause notice and Order-in-Original. However, the Tribunal found that the Additional Commissioner, who adjudicated the case, was within the administrative control of the Commissioner having jurisdiction over the area where the goods were seized. Therefore, the adjudicating proceedings were not vitiated.

2. Validity of the Seizure and Confiscation of Gold Jewelry:
The main issue was whether the seized gold jewelry was liable for confiscation. The Customs Officers intercepted a car based on specific intelligence and seized gold jewelry valued at Rs. 15,16,553/-. The appellant claimed ownership of part of the jewelry but failed to provide corroborative evidence. The Tribunal upheld the Adjudicating Authority's decision, noting that the appellant and the person from whom the jewelry was seized failed to prove that the jewelry was not made from smuggled gold. The confiscation was deemed valid as the reasonable belief for seizure was established under Section 123 of the Customs Act.

3. Imposition of Penalty under Section 112(a) and 112(b) of the Customs Act:
The Tribunal examined whether the appellant was liable for a penalty under Section 112(a) and 112(b). The appellant admitted to making payments for the jewelry and having associations with the person from whom the jewelry was seized. The Tribunal found that the appellant's actions amounted to abetment and dealing with goods liable for confiscation. Therefore, the penalty was rightly imposed.

4. Timeliness of the Show Cause Notice Issuance:
The appellant contended that the show cause notice was issued beyond the statutory period of 6 months. However, the Tribunal noted that due to general relaxation for limitation periods allowed by the Supreme Court due to COVID-19, the show cause notice issued on 10.12.2021 was within the permissible period.

5. Allegation of Non-Application of Mind by the Commissioner:
The appellant argued that the Commissioner relied on facts related to another person, Shri Jacky Jain, while deciding the penalty. The Tribunal acknowledged this but stated that it did not constitute non-application of mind when the entire orders were read holistically. The culpability of the appellant vis-a-vis the offending goods was established, and the penalty was justified.

Conclusion:
The Tribunal dismissed the appeal, upholding the penalty imposed on the appellant under Section 112(a) and 112(b) of the Customs Act. The confiscation of the gold jewelry was deemed valid, and the jurisdiction of the Adjudicating Authority was affirmed. The show cause notice was issued within the permissible period, and the Commissioner's decision was not found to suffer from non-application of mind.

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