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2022 (8) TMI 617
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....o him carrying 9 brown packets in the presence of panchas under panchanama dtd. 04.06.2019. The officers opened the packet and found the same contained 47 gold bars. The officers seized the said gold under Seizure memo dtd. 04.06.2019. Statement of Shri Jignesh Savaliya was recorded wherein he stated that the said gold bars were given to him by a person named Shri Lokesh Sharma and he was supposed to hand over the same to Shri Rutugna Trivedi outside the Airport terminal. The officers further carried out the investigation and the evidences in the form of statements of persons involved in smuggling of gold, documents recovered after searches carried out at various locations, documents recovered and retrieved from the Mobile phones of various persons involved in smuggling of gold, data storage devices recovered from the residence of Ms. Nita C Parmar and also the email recovered from account of Shri Jignesh Savaliya and Shri JitendraRokad reveal that a Gold smuggling racket was orchestrated and operated by Shri Rutunga Trivedi, his wife Smt. Hina Rutunga Trivedi and their employee and key associate Ms. Nita C Parmar. This smuggling activity was aided by Shri Jignesh Savaliya, Asst. D....
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....ved in smuggling of gold into India which he had reasons to believe the smuggled gold is liable to confiscation under Section 111 of the Customs Act, 1962. After following due process, the adjudicating authority vide impugned order dated 29-11-2021 confirmed the charges and demands proposed in Show Cause Notice. He imposed the penalty of Rs. 50,00,000/- under Section 112(b)(i) of the Customs Act 1962 on the appellant. Being aggrieved, the appellant preferred appeal before this Tribunal. 3. The Learned Consultant Shri Vikas Mehta appearing on behalf of Appellant submits that impugned order has travelled beyond the scope of show cause notice as there is no allegation against the appellant that he had dispatched any gold-smuggled or otherwise through any angadia firm. Hence, imposition of penalty upon Appellant on this ground alone is not tenable in the eyes of law. In the show cause notice neither name nor role related to gold smuggling activity is explained and hence it is established that appellant is nowhere connected with the offence covered by the impugned notice. 3.1 He submits that Ld. Adjudicating authority, while holding that the Appellant was used to buy gold from M/s....
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....ty not exceeding the duty sought to be evaded on such goods or five thousand rupees, whichever is greater; (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereinafter in this section referred to as the declared value) is higher than the value thereof, to a penalty not exceeding the difference between the declared value and the value thereof or five thousand rupees, whichever is the greater; (iv) in the case of goods falling both under clauses (i) and (iii), to a penalty not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest; (v) in the case of goods falling both under clauses (ii) and (iii), to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest." From the perusal of above provision, it will be seen that for imposition of penalty on a person under Section 112(b), the following condition....
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....I find that Noticee No. 22 has abetted in the activity of smuggling of gold by dispatching the same through angadia firm and therefore has rendered himself liable to penalty in terms of the provisions of Section 112(b)(i) of the Customs Act, 1962. 5.2 We find that role of the Appellant in the whole episode has been derived only from the statement of Ms. DivyaKishorBhundia only Statement of said person remained uncorroborated during the investigation. As per the department Shri Rutugna being the mastermind of the smuggling racket, however during the investigation Shri Rutugna has nowhere stated the name of Appellant as connected to his alleged activity of smuggling of gold. He nowhere stated that Appellant has involved in purchase and sales of smuggled gold. We have also gone through the statements of other persons who allegedly involved in smuggling gold activity. Upon perusal of these statements we nowhere found that the Appellant had knowledge about the said alleged smuggling of gold activity. The department except the statement of Ms.Divya Kishore Bhundia nowhere produce any evidences to show that Appellant was involved in smuggling gold activity. We also reproduced the relev....
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....at that he had not confessed in his statement that he had knowledge about alleged activity of smuggled Gold. The Appellant had nowhere stated that he dealt with the alleged smuggled Gold. During the investigation officers did not find any documents/ piece of paper or any other evidence against the Appellant to show that the Appellant was involved in purchase or sale of smuggling of gold. Clearly, the Appellant did not have knowledge of alleged smuggling activity. 5.4 In spite of this, the Department has not taken any steps to confirm with Shri Rutugna whether the Appellant also involved with him. The evidence on record is not sufficient to hold that the appellant was involved in alleged activity of smuggling of gold. In the impugned matter we also find that Ld. Commissioner only on the basis of statement of Ms.Divya Kishore Bhundia who is also co-noticee in the present case concluded that Appellant has dealt with smuggled Gold. It is well settled law that the statements of the co-noticee cannot be adopted as a legal evidence to penalize the accused unless the same are corroborated in material particulars by independent evidence. The statement of co-accused cannot be ....
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.... and Silver, that would not ipso facto make the appellant in any way privy to the commission of any offence with reference to the alleged gold smuggling activity. We are of the view that it will be unfair to fasten the appellant with penal consequences merely on the basis of a statement of third party only. Moreover we also observed that during the investigation statements of Ms. Nita Parmar, Shri MehulBhimani, Shri JitendraRokad and Shri Rutugna Trivedi were recorded whereby they did not say that the Appellant was also involved in alleged activity of gold smuggling or Appellant had knowledge about smuggling of gold into India. From the above-reproduced section it can be seen that penalties can be imposed only if the individuals were in knowledge of the act of smuggling. Further, for imposition of penalty under Section 112(b) of the Customs Act, 1962 the knowledge on the part of the person has to be established. In the present matter department failed to do so. During the investigation officers did not find any documents/ piece of paper or any other evidence against the Appellant to show that the Appellant had dealt with the smuggled gold. Facts borne on record reveal that the a....
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....nfiscation under Section 111 shall be liable - Rule 209A of the Central Excise Rules, 1944: "Rule 209A. Penalty for certain offences. - Any person who acquires possession of, or is any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding three times the value of such goods or five thousand rupees, whichever is greater." Rule 26 of the Central Excise Rules, 2002 Rule 26 came to enacted which came in force with effect from 1st March, 2007. Rule 26 reads as under : "Rule 26. Penalty for certain offences. - (1) Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding the duty on such goods or two thousand rupees, whi....
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....person must have dealt with excisable goods with knowledge that they are liable for confiscation. 5.10 Similarly, in the case of R.C. Jain Vs. Commissioner of Central Excise and Service Tax - 2016 (334) ELT 115, the Hon'ble Tribunal held that penalty under Section 112(b) of the Customs Act cannot be imposed if the assesse has not dealt with or transported goods physically in any manner. 5.11 The Tribunal in the case of D. AnkneeduChowdhry Vs.Commissioner of Customs - 2004 (178) ELT 578held that "in any other manner dealing with' used in Section 112(b) of the Customs Act has to be read ejusdem generis with the preceding expression in the clause viz. carrying, removal or depositing etc. It is held that accordingly to the above doctrine, meaning of expression "in any other manner of dealing with" should be understood in sense similar or comparable to how preceding words viz. carrying, removing, depositing etc. are understood. In other words, "in any other manner dealing with" of the goods is also to some physical manner of dealing with the goods. In absence of the finding in the impug....