TaxTMI 
TaxTMI 
2022 (10) TMI 211
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....aliya 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 aide....
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....re 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, 1962. After following due process, the adjudicating authority vide impugned order dated 29-11-2021confirmed the charges and demands proposed in Show Cause Notice. He imposed the penalty of Rs. 2,28,00,000/- under Section 112(b)(i) of the Customs Act 1962 on the appellant. Being aggrieved, the appellants preferred appeal before this Tribunal. 3. Shri Hardik Modh, Learned Counsel appearing on behalf of Appellant submitsthat Learned Commissioner erred in imposing penalty on Appellant. The impugned order violates the principles of natural justice. The impugned order has solely relied upon the worksheet title "Vipul Joshi" which was found in the folder named "Rajubhai" from pen drive retrieved from the residence of Ms. Nita Parmar. Appellant vide letter dated. 12.10.2021 and 30.11.21 demanded the said worksheet and reiterated the said request at the time of personal hearing. Despite this facts, the Ld. Commissioner passed the impugned order without supply of these vi....
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....atement or corroborative documents or evidence, such serious finding made in the impugned order cannot be sustained. He placed reliance on following decisions. • Dabesh Prasad Nanda Vs. C.C.Ex. 2016 (332) ELT 733 (T) • Asha Shivshankar Pillay Vs. C.C. 2003 (161) ELT 392 (T) • Jai Narain Verma Vs. C.C. 1995 (76) ELT 421 (T) 3.3 He also submits that impugned order heavily relies upon the emails retrieved from Pen Drive seized from residential premises of Ms. Nita Parmar. Based on these emails, it is held that the Appellant financed to Shri Rutugna Trivedi for Smuggling of gold for which profit earned out of these activities were shared between the Appellant and Shri Rutugna Trivedi. The Appellant denies 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. In absence of any documentary evidence to show that the Appellant financed to Shri Rutugna Trivedi for smuggling of gold, the impugned order imposing penalty based on the documents retrieved from third party cannot be sustained as it does not impl....
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....ment ought to have taken sufficient care to supply all relied upon documents to the appellant. The adjudication conducted without supply of relied upon documents is against principles of natural justice and vitiated. 6.2 The Adjudication Authority held that the appellant was issued summons dated 10.09.2019 and 12.09.2012 to appear before investigating authority. It is observed that the appellant had sought time and requested for another date of his appearance. However, the Adjudicating Authority held that act of none appearance of the appellant, hence mensrea on part of the appellant. We find that only because the appellanthas not appeared that to stating the reasons of his non-availability on one or other pretext. It does not mean that the appellant is involved in smuggling of goods. The Hon'ble Mumbai High Court in the case of Mokhtar Mistry Vs. Additional Collector of Customs- 1994 (71) ELT 380 (Mum.) held that merely avoiding summonsis not sufficient to conclude that a person is concerned in the smuggling of goods. The Adjudicating Authority based on the statement of Shri Milan Raythatha, partner of S.R. Tours & Travels recorded on20.06.2019 that in certain cases, the appell....
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....ements or corroborative documents or evidence, such serious finding made in the impugned order, in our view, it cannot be sustained. This gets support from this Tribunals decision in the case of Shakil Patel Vs. Commissioner of Customs (General) Mumbai -2018 (361) ELT 382 (Tri.-Mum.), wherein it was held as under: "3. After going through the impugned order and after appreciating the submissions made by both the sides, we note that the entire case of the Revenue is based upon the statement of co-noticee without there being any further evidence. Though a number of summons were issued to the present appellant, but his statement could not be record as the appellant did not honour the summons. Further, no efforts were made by revenue to approach the present appellant in person, so as to record his statements. As such, we note that there is no statement of appellant and the penalty stand imposed upon him only on the basis of incriminating statement of the co-noticee. It is well-settled law that such statement of the co-noticee cannot be made the sole basis for penalizing a person". 6.3 This Tribunal in the case of the Dabesh Prashad Nanda Vs. Commissioner of C.Ex.- 2016 (332)....
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.... thousand rupees, whichever is the greater; 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. 6.7 We find that statements of Ms....
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....any offence in relation to the alleged gold smuggling activity. Merely because name of Appellant was appearing in printout sheet retrieved from the pen drive of Ms. Nita Parmar, 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. It will be unfair to fasten the appellant with penal consequences merely on the basis of a printout sheet recovered from the third party and statements of third party. Moreover we also observed that during the investigation statements of Ms. Nita Parmar, Shri Mehul Bhimani, Shri Jitendra Rokad and Shri Rutugna Trivedi were recorded whereby they did not say that the Appellant also involved in alleged activity of gold smuggling or Appellant had knowledge about smuggling of gold into India or financed them for smuggling of gold. 6.10 From the section 112(b) 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 of offence on part of the person has to be established. In the present matter department failed to do....
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....l Excise Rule, 2002 are reproduced hereunder:- "Section 112 Penalty for improper importation of goods etc. (a) **** (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 - 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 wh....
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....penalty under Rule 209A." 6.14 The Larger Bench of the Tribunal in the case of Steel Tubes of India Ltd. Vs. Commissioner of Central Excise - 2007 (216) ELT 506, after referring to the decision of the Hon'ble Bombay High Court in the case of Jayantilal Thakkar and Co - 2006 (195) ELT 9 (Bom.) held that for imposition of penalty under Rule 209A of the Central Excise Rules, 1944, the person must have dealt with excisable goods with knowledge that they are liable for confiscation. 6.15 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. 6.16 The Tribunal in the case of D. Ankneedu Chowdhry Vs. Commissioner of Customs - 2004 (178) ELT 578 held 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....