TaxTMI 
TaxTMI 
2022 (9) TMI 957
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....avaliya whereby it was found to 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 dated 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 Jitendra Rokad reveal that a Gold smuggling racket was orchestrated and operated by Shri Rutunga Trivedi, his wife Smt. Hina Rutunga Trivediand their employee and key associate Ms. Nita C Parmar. This smuggling activity was aided by....
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....cure Gold in Dubai and to smuggle the same into India. Thus it appears that Appellant was knowingly involved in smuggling of gold into India which he had reasons to believe the smuggle under Section 111 of the Customs Act, 1062. 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. 1,00,00,000/- under Section 112(b)(i) of the Customs Act 1962 on the appellants. Being aggrieved, the appellants preferred appeal before this Tribunal. 3. Shri Hardik Modh, Learned Counsel appearing on behalf of Appellant submits that learned Commissioner erred in imposing penalty on Appellant. He relied upon the statements of Shri Mehul Bhimani and Shri Jitendra Rokad recorded on 28.06.2019 and 29.06.2019. Upon perusal of these statements, nowhere it has been stated that the Appellant had knowledge about the use of the fund in smuggling of gold. Shri Jitendra Rokad in his statement dated 29.06.2019 stated that after deducting expenses, surplus profit was distributed among Shri Mehul Bhimani, Shri Jitendra Rokad and Shri Rutugna Trivedi on equal ratio i.e. 33% of profit....
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....d therefore he requested his friend in Dubai to finance him AED 12,99,100 under his guarantee. Merely such amount had been reflected in the above document retrieved from Pen Drive of Ms. Nita Parmar, it does not mean that the Appellant financed Shri Rutugna Trivedi or any other persons for smuggling of gold into India or had knowledge about smuggling of gold into India. 3.5 He also submits that Ld. Commissioner heavily relied upon the documents retrieved from Pen Drive seized from residential premises of Ms. Nita Parmar on 26.06.2019. Basis on such documents it is held that the Appellant financed to Shri Rutugna Trivedi for smuggling of gold. The Appellant denied that he financed to Shri Rutugna Trivedi for smuggling of Gold. The Appellant is not concerned with the documents/ emails retrieved from Pen Drive seized from residential premises of Ms. Nita parmar. Even statements of Shri Mehul Bhimani, Shri Jitendra Rokad, Shri Rutugna Trivedi and Ms. Nita Parmar were recorded whereby they did not say that the Appellant had knowledge about smuggling of gold into India or financed them for smuggling of gold. In absence of any documentary evidence to show that the Appellant financed to....
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.... From the perusal of above provision, it will be seen that for imposition of penalty on a person under Section 112(b), the following conditions must be satisfied. (i) The person must have acquired possession of or must be in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which are liable for confiscation under Section 111 of Customs Act, 1962. (ii) The person must have knowledge or have reason to believe that the goods acquired by him or dealt with by him in the manner as mentioned above, are liable for confiscation under Section 111 i.e. he has knowledge or has reason to believe that any one or more of the contraventions mentioned in Clause (a) to (p) of Section 111 have been committed in respect of the imported goods acquired or dealt with by him. For imposition of penalty under Section 112(b) of Customs Act, 1962, it is also necessary to prove that the person had knowledge or had reason to believe that the goods acquired or dealt with by him are liable for confiscation under Section 111. 5.1 We find that as regard the role of Appellant Ld. Commissioner in impugn....
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....t paras 119.20 to 119.20.8 hereinabove. Therefore, I find that Noticee No. 21 has concerned himself in selling or purchasing and dealing with any goods which he knew were liable to confiscation and thereby, 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 printout sheet retrieved from the pen-drive seized from the residential premise of Ms. Nita Chunilal and statements of persons. Statements of said persons 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 funded the amount for smuggling of gold. We have also gone through the statements of Shri Mehul Bhimani and Shri Jitendra Rokad recorded on 28.06.2019 and 29.06.2019 in impugned matter. Upon perusal of these statements we nowhere found that the Appellant had knowledge about the use of fund in smuggling of gold. The Appe....
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....s., Amount in AED, Amount in USD". And above the heading of Amount there is mention of "Mehulbhai/Jitubhai". My attention is invited to entry at dated 01.09.2013 which shows 'cash received from Vyomeshbhai' and an amount of 10,39,100 is shown under the heading Amt in AED. I am also shown another entry dated 01.09.2013 which shows 'cash received from Vyomeshbhai' wherein amount of 2,75,000 is shown under the heading amount in AED. On being asked to explain I state that one of my friend Sh Nilesh Dhakan had a firm by the name Lamore Jewels LLC in Gold & Diamond Park, Dubai. I joined with him by share purchase of about 20% in the said firm and I had arranged this amount of 10,39,100 AED for Mehulbhai at Dubai for his business through Nileshbhai at Dubai. The said amount was given by Nileshbhai to Mehul on my instruction/Guarantee. On being asked regarding the amount of 2,75,000 AED, I further state that the amount of Rs. 50 lacs was given to Mehulbhai in Ahmedabad as requested by him. I don't know how he sent to Dubai for conversion into AED. In token of having seen and explain the contents of the panchnama, I put my dated signature on the last page of the Panchnama dated 27.06.2019 &....
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....has to be established. In the present matter department failed to do so. From the statement of Appellant it is also clear that he had not confessed in his statement that he had knowledge about use of the funds provided to Shri Mehul Bhimani for smuggling of gold. The Appellant had nowhere stated that this fund used by persons for import of smuggling of 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 financed money for smuggling of gold into India. Clearly, the Appellant did not have knowledge of use of fund financed on his pretext, if any. 5.7 In spite of this, the Department has not taken any steps to confirm with Shri Rutugna whether the Appellant was 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.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 with material particulars by independent evidence. The statement of co-accused cannot be relied upon, particularly when appella....
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....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 document/ piece of paper or any other evidence against the Appellant to show that the Appellant had financed the money for smuggling of gold into India. Even if it is assumed that the appellant has arranged the finance but appellant did not deal with alleged gold smuggling activity in question. Facts borne on record reveal that the appellant has maintained all along that it never had the possession of the impugned goods nor was in any way concerned with the carrying, removing, etc., of the consignments in question and hence, it was beyond their comprehension that the goods in question were per se liable for confiscation under Section 111(d) ibid. It is nowhere on record that the appellant, in his capacity, was knowingly involved in alleged activity of smuggling gold. Section embodies the phrase "...which he knows or has reason to believe are liable to confiscation under Section 111..." which is of specific importance in this situation. Reven....
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....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, whichever is greater. (2) Any person, who issues - (i) an excise duty invoice without delivery of the goods specified therein or abets in making such invoice; or (ii) any other document or abets in making such document, on the basis of which the user of said invoice or document is likely to take or has taken any ineligible benefit under the Act or the rules made thereunder like claiming of Cenvat credit under the Cenvat Credit Rules, 2004 or refund, shall be liable to a penalty not exceeding the amount of such benefit or five thousand rupees, whichever is greater." The Hon'ble Bombay High Court in the case of Comm....