TaxTMI 
TaxTMI 
2019 (3) TMI 425
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....material evidence against the Appellant, and on the basis of conjectures and suspicions ? (iv) Whether the Tribunal was justified in imposing a penalty on the Appellant ex-parte, without affording the Appellant with an opportunity of contesting the case on merits ? (v) Whether the Tribunal and the authorities below were justified in imposing a penalty on the Appellant when the Show Cause Notice itself had no case that the Appellant was within the territory of India during the said period ?" We also raised an additional question of law as follows: "Is not the decision of the Tribunal without any application of mind , also perverse in the facts and circumstances of the case ?" 2. The facts in brief are thus: The appellant claims to be a Non-Resident Indian businessman in UAE. He received a show cause notice at Annexure D on 01.08.2014 from the Commissioner of Customs (Preventive), Cochin, requiring him to show cause as to why the 24 gold biscuits weighing 2.8 kgs, having a market value of Rs. 83,47,525/- and an international value of Rs. 70,36,051/- should not be confiscated under Sections 111(d), 111(i), 111(l) and 111(m) of the Customs Act, 1962 (for short "the Act") an....
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..... 25,77,500/- reasonably believed to be the sale proceeds obtained on sale of smuggled gold. Aramana Gold, another jewellery situated in M.G.Road, Kasaragod, was also searched resulting in recovery of foreign made gold bar weighing 1 kg., 60 gold coins weighing 395.2 grams and Rs. 25,14,000/- in cash. Search in the residence of Altaf did not disclose anything. 7. The statement of Shamsudhin was also recorded on 07.02.2014 and he had stated that Abdul Basheer was known to him as a friend of the appellant, whom, he knew for the past 15 years. He too revealed the mobile number of the appellant, as well as confirmed his own mobile number as disclosed by Abdul Basheer. He also revealed that his daughter Jaseela, and the appellant's wife Haseena, were partners of Aramana Jewellery. He also accepted the fact that the appellant used to purchase gold from abroad and sent it through passengers which was collected at the Airport by Abdul Basheer and brought to Kasaragod and handed over to him. He further admitted having paid money to Abdul Basheer on receipt of the gold. He was under the belief that the gold was duty paid and he said that he did not know anything about the smuggling. 8.....
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....erson along with the KYC copy. The personal identity, documents and passport copy of the aforesaid Khaleel Ibrahim Mohammed Ishaq was also submitted along with the affidavit. The argument note is at Annexure F and the affidavit of Khaleel is at Annexure G. Without considering the submissions made on behalf of the appellant, and relying solely on the contradictory statements of the witnesses recorded under Section 108 of the Act, and ignoring the request made by the appellant to crossexamine the witnesses, a penalty of Rs. 8 lakhs was imposed on him as per Annexure H on 29.02.2016. 11. Aggrieved by the order of the Adjudicating Authority, the appellant filed an appeal before the Tribunal as Annexure I. He had entrusted an Advocate to appear before the Tribunal, but there was no appearance and the Tribunal passed an exparte order against him and therefore the appellant is aggrieved and approached us with this appeal under Section 113 of the Act. 12. In the impugned order, it is stated that none had appeared on behalf of the appellant, despite notice, and therefore, the Tribunal had proceeded to consider the appeal in the absence of the appellant. The allegation is that, the appella....
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....ry clear that the carrier Altaf did not have any contact, whatsoever, with the appellant. Abdul Basheer, who was waiting for Manoj and Altaf, outside the Airport to receive the gold, has in their statement testified that he was working with the appellant in Dubai and that the appellant had informed him that the smuggled gold from abroad was very profitable and thus it was he who approached Manoj, who is a resident of Kasaragod and working at Karippur Airport, to collect gold biscuits from passengers smuggling it from abroad. He has also given a statement that he had consulted the appellant and agreed to give Rs. 40,000/- to Manoj for collecting the gold and handing it over outside the Airport, while he himself was paid at the rate of Rs. 30,000/- for each consignment. Shamsudhin, who was running a jewellery at Pallam, used to collect gold at Kasaragod and would handover the remuneration to Abdul Basheer and Manoj. Abdul Basheer, had allegedly disclosed the mobile number of the appellant as 0559271137 on which he used to issue instructions regarding the transactions. 15. Manoj, the other important witness, apprehended with the contraband, who gave statement under Section 108 of the....
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....n getting the show cause notice, the appellant sent a letter to the Commissioner of Central Excise & Customs on 01.10.2014. In that reply, he has mentioned that the documents referred to in the notice, and stated to be relied upon by the prosecution, were not handed over to him. The allegations against him of having arranged for smuggling of gold through Karipur Airport with the aid of Navas and Shafeeq in Dubai, and of Abdul Basheer, his friend, at Calicut Airport, is also denied by the appellant. He has denied having any connection with Navas and Shafeeq or arranging gold for smuggling through Altaf. He denies having any acquaintance with Navas or Shafeeq. It is also pointed out that neither Altaf nor Abdul Basheer, who were apprehended in this connection, could give any whereabouts of Shafeeq or Navas, and therefore, without identifying those persons who have admittedly contacted the passenger Altaf or Manoj, it would not have been possible to connect the appellant to the alleged act of smuggling. It is also stated that the mobile number, which the witnesses have allegedly mentioned as that belonging to him, does not actually belong to him. The appellant had also requested that ....
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....onnecting the appellant with the mobile number other than the statements of persons who were apprehended for the direct link with specific instance of smuggling. 21. It is pertinent to note that the appellant had produced documentary proof of the fact that the telephone number spoken to by the witnesses as his, belonged to someone else. But the authority had concluded that the mobile number belongs to him relying solely upon the statements of Basheer and Shamsudhin. Going through the entire Annexure H order of the Adjudicating Authority, we do not find anything concrete to rope the appellant in the alleged smuggling of gold, but for the recorded statements of persons, who were directly involved. 22. A Division Bench of this Court in the judgment dated 23.06.2017 in Cus.Appeal No.4/2017 (Krishna Brothers v. Commissioner of Customs), held thus: "9. Insofar as the second contention raised by the learned counsel with reference to Annexures A6, A7 and A8 is concerned admittedly these are statements recorded under Section 108 of the Customs Act. In terms of Section 138 B (2) of the Customs Act such statements could not have been used in any proceedings under the Act without the perso....
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.... "12. We may first deal with the question of breach of natural justice. On the material on record, in our opinion, there has been no such breach. In the show-cause notice issued on August 21, 1961, all the material on which the Customs Authorities have relied was set out and it was then for the appellant to give a suitable explanation. The complaint of the appellant now is that all the persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it to cross-examine them. In our opinion, the principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed lo be cross-examined by them on the statements made before the Customs Authorities. Accordingly we hold that there is no force in the third contention of the appellant." 25. These decisions were followed by us in our judgment, reported in 2019 (1) KLT 229, Mohammed Fariz & Co. v. Commissioner of Customs to hold that permission has to be granted to cross-examine the witnesses even at an earlier stage to ensure that eventually the proceedings are set aside, only ....