TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 1224
X X X X Extracts X X X X
X X X X Extracts X X X X
....own packets in the presence of panchas under panchanama dated 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 Trivedi and their employee and key associate Ms. Nita C Parmar. This smuggling activity was aided by Shri Jignesh Savaliya, Asst. Duty Officer of M....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to smuggle the same into India. Thus it appears that Appellant had knowingly involved in smuggling of gold into India which he had reasons to believe the smuggle 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. The present appellant was imposed a penalty of Rs. 50,00,000/- under Section 112(b)(i) of the Customs Act 1962. 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. Since the impugned order is misconceived both facts and in law, the same is required to be quashed and set aside in the interest of Justice. Appellant has funded money to Shri Rutugna Trivedi against the security of blank cheque duly signed by him without having knowledge that the same fund was used for smuggling of Gold activity. Being part of financial activity, the Appellant financed to Shri Rutugna Trivedi after obtaining collateral security. The Appellant also provided ledger copies to investigatin....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Commissioner of Customs 2019(367) ELT 290 (T) * A V Global Corporation Pvt. Ltd. Vs. CC 2018 (363) ELT 676 (T) The appellant also filed a written submission dated 05.08.2022 post hearing then his counsel which is taken on record. 4. Shri R P Parekh, Learned Superintendent (Authorized Representative) appearing on behalf of the Revenue reiterates the findings of the impugned order. 5. We have carefully considered the submissions made by both sides and perused the record. The appellant has challenged the penalty imposed upon him under Section 112(b)(i) the Customs Act, 1962 which reads as under:- "112. Penalty for improper importation of goods, etc. - Any person, - (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable, - (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ld is covered under the category of prohibited goods and is liable for confiscation in terms of the provisions of Section 111 of the Customs Act, 1962 in my discussion at paras 119.20 to 119.20.8 hereinabove. Therefore, I find that Noticee No. 20 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 have also gone through the statements of persons recorded in impugned matter. Upon perusal of these statements nowhere it has been found that the Appellant had knowledge about the use of fund in smuggling of gold. It is admitted fact that Appellant has financed the fund against the security of blank cheques and amount financed in June 2014 was also adjusted by the Appellant against the purchase of one plot in Akshar Industrial Estate, Ahmedabad from Shri Rutugna Trivedi. Detail of the said transaction alongwith ledger also submitted by the Appellant to the investigation authority during the investigation. We also reproduce the relevant paras of the Appellant's statement dated 15.10.2019 as under: -....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rn interest. In respect of the amount given to Shri Rutugna Trivedi on 27.06.2014, the said amount was adjusted against purchase of the plot in Akshar Industries Estate, Ahmedabad Rajkot Road from Rutugna Arvindbhai Trivedi. He stated that he made full payment to the said Plot but only agreement of sale was made but the final registry documents were yet to be made. The Appellant provided a copy of agreement and index copy to the Investigating Authority. Similarly, statements of Shri Rutugna Trivedi and Ms. Nita Parmar was recorded on 14.10.2019 wherein they were not even questioned related to the two sheets retrieved from the pen-drive recovered from residence of Ms. Nita Parmar regarding sheet in dispute. The above facts stated by the Appellant in his statement nowhere disputed by the department. From the evidence available on record and statement of Appellant it is clear that he was engaged in normal course of his business of lending the fund. The business activity of financing of fund has been turned by the Ld. Commissioner into direct participation in the conspiracy to smuggle gold. For imposition of penalty under Section 112(b) of the Customs Act, 1962 the knowledge on the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appellant has denied his involvement in respect of the goods in question. In this connection, the following judgments are relevant and they fortify the stand taken by the appellant: * Punam Chand Bhotra v. Collector oustoms - 1993 (63) E.L.T. 237 * Jai Narain Verma v. Collector of Customs, New Delhi - 1995 (76) E.L.T. 421. * Jaswinder Singh v. Collector of Customs, New Delhi - 1996 (83) E.L.T. 175. * Mahabir Prasad v. Commissioner of Cus. (Prev.), I.N.B., Patna - 2000 (126) E.L.T. 803. * Pradeep Shah Vs. Commissioner of Customs, Patna -2006 (197) E.L.T. 301 (Tri. - Kolkata) * Vikram Singh Dahiya Vs. Comm. Of Cus.(Export), New Delhi - 2008 (223) ELT 619 (Tri. Del.) * Surinder Kumar Khanna Vs. Intelligence Officer, DRI- 2018 (362) ELT 935 (SC) * Habib Uz Zaman Vs. Commissioner of Customs, New Delhi - 2021 (376) ELT 666 (Tri. Del.) * K.K. Jain Vs. Commissioner of Customs, Kandla - 2009 (235) ELT 170 (Tri. Ahmd.) 5.5 We also find that there is absolutely no evidence on record connecting the appellant with the commission of any offence in relation to the alleged gold smuggling activity. Merely because name of Appellant appeared in printout sheet retrieved from t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... were liable for confiscation. Undisputed peculiar facts of the case are that the appellant is neither the importer nor the owner who had acquired possession nor in any way concerned with the carrying, removing, etc., of the goods in question, and Revenue has nowhere ascribed knowledge of the appellant as to the confiscation. 5.8 Penalty under Section 112(b) can be imposed when a person acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111. It is submitted that it is not the case of the Revenue that the Noticee was indulged in any of the activities as mentioned under Section 112(b) of the Customs Act. As the Appellant did not acquire possession of or in any way concern with import of gold, penalty under Section 112(b) ought not to have been imposed. 5.9 Section 112(b) of the Customs Act is identical to earlier Rule 209A of the Central Excise Rules, 1944 and Rule 26 of Central Excise Rules, 2002. Relevant extracts of the provisions of Customs Act, 1962 Central Excise....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uired possession of any excisable goods with the knowledge or belief that the goods are liable to confiscation under the Act or Rules or he has been in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing or has in any other manner dealt with any excisable goods with such knowledge or belief. Acquisition of possession of goods is, indisputably, a physical act i.e. the act which could not have been done without handling or movement of excisable goods as mentioned in the rule. The words "who acquires possession" would indicate that the person sought to be penalized under this rule has to first acquire the possession and then do the activity of transportation etc. as contained in the rule. It is, thus, clear that the physical possession of the goods is a must for doing the activity of transporting referred in Rule 209A. The ratio laid down by this Court in Jayantilal Thakkar & Co. (supra) covers the issue. In the said judgment, it is held that in the given situation, if the assessee is only issuing invoices wherein there is no movement of the goods, they cannot be visited with penalty under Rule 209A." 5.10 The Larger Bench of the Tribun....