TaxTMI 
TaxTMI 
2023 (4) TMI 174
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..../CUS/WB/20-21 dated 16.09.2020 passed by Additional Commissioner of Customs (Preventive), Custom House, Kolkata which was confirmed by the Commissioner (Appeals) vide Order-in-Appeal No.KOL/CUS(PORT)/AKR/880-885/2021 dated 31.12.2021. The adjudicating authority vide order No: 35/ADC(P)/CUS/WB/20-21 dated 16.09.2020 (i) absolutely confiscated 11 pcs gold bars collectively weighing 10500.80 grams, valued at Rs.3,15,02,400/-; 9 pcs gold coins collectively value at Rs. 2,07,000/- and 509.100 grams of silver granules, valued at Rs. 19,448/ u/s 111(b) & 111(d) of the Customs Act, 1962 (ii) absolutely confiscated the seized Indian currency amounting to Rs.1,59,76,5000/- u/s 121 of the Customs Act,1962 (iii) penalty of 70,00,000/- on the Noticee No. 1 and penalty of Rs. 10,00,000/- each upon the Noticee No. 2 and 3 U/s 112(a) & 112(b) of the Customs Act, 1962. 3. Noticee No.1 is the main appellant and Noticee No.2 and Noticee No.3 are employees of Noticee No. 1. The Noticee No.2 and Noticee No.3 works as office assistance who are neither related with the seized goods nor they have any knowledge regarding the procurement of origin of the goods seized by the department. 4. The facts of....
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....d 91.8% by weight. 8. Two persons named Shri Ashok Kumar Jalan alias Pappu Noticee No.5 and Sri Amit Kumar Jalan, Noticee No.6 were also examined in connection with a separate case of seizure of 8 Kgs gold effected by DRI, Kolkata in the month of June, 2019. Their statements were recorded on 10.6-2019 & 11.6.2019. The said persons allegedly given statements to the effect that they have sold smuggled gold to the Noticee No. 1. The said persons thereafter retracted the statements. It is pertinent to mention herein that the Noticee No. 1 in any of his statement has ever admitted or said that the Noticee No. 1 has purchased any gold from the said persons. The Noticee No. 1 had never entered any into any business relation with the said persons. The department also has not been able to prove or even able to produce any evidence that the said persons have sold any gold to the Noticee No. 1. 9. A common show cause notice being DRI F.No: DRI/KZU/AS/Enq- 115(Int-34)/2018 dated 28-7-2019 was issued to the Noticee no.1 and also to Noticee no.2 and Noticee no.3, Abhishek Kumar Agarwal Noticee no.4, Ashok Kumar Jalan, Noticee no.5and Amit Kumar Jalan,Noticee no.6 which was adjudicated by t....
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....f the Learned Tribunal was upheld by the Hon'ble High Court at Calcutta reported in 2016 (337) E.L.T. 10 (Cal.) (ii) RAM NARESH CHAURASIYA Vs. COMMISSIONER OF CUSTOMS (PREV.), PATNA, paras 18 & 19 (iii) RAM NATH SAH Vs. COMMISSIONER OF CUSTOMS, PATNA 2007 (219) E.L.T. 546 (Tri) para 4 B. Currency seized from appellant not established to be representing the sale proceeds of smuggled goods. Confiscation of currency under Section 121 of Customs Act, 1962 not sustainable. It is stated herein that for upholding the seizure of Indian currency for violation of Section 121 the following ingredients must be satisfied (i) there must be a sale (ii) the sale must be of smuggled goods (iii) the sale must be by a person having knowledge or reason to believe that the goods were of smuggled origin (iv) the seller and purchaser and the quantity of gold must be established by the Customs authorities. The department in the instant case has failed to prove any of the ingredient in the instant case. In this context reliance is placed upon, inter alia, the following decisions:- (i) RAMCHANDRA Vs. COLLECTOR OF CUSTOMS 1992 (60) E.L.T. 277 (T) paras 5 & 6 (ii) COL....
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....nst Noticee Nos.5 & 6. 14. On the other hand, the ld.Authorised Representative, opposes the contentions of the ld.Counsel and submits that the said gold is notified items under Section 123 of the Customs Act, 1962. Therefore, the burden of poof that the same is not smuggled one, is upon the person from whom the gold is seized and Noticee has failed to discharge the said burden. He further submitted that the retraction of statement made by the Customs Officer is having evidentiary value. In support of his contention, he relies on the following case laws : (i) Phoenix Mills Ltd. Vs. Union of India : 2004 (168) ELT 310 (Bom.); (ii) Percy Rustomji Basta Vs. State of Maharashtra : 1983 ELT 1443 (SC) ; (iii) Vinod Solanki Vs. Union of India & Anr.- Civil appeal No.7407 of 2008 (Arising out of SLP (c) No.3537 of 2008) ; (iv) Kuber Tobacco Products Ltd. Vs. Commissioner of Central Excise, Delhi-2013 (290) ELT 545 (Tri.-Del.) ; (v) Naresh J.Sukhawani Vs. Union of India : 1996 (83) ELT 258 (S.C) (vi) Surjeet Singh Chhabra Vs. Union of India & Others : 1997 (89) ELT 646 (S.C.) ; (vii) Sunny Kakkar Vs. Principal Commissioner of ....
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....hing 199 gms to his daughter in the year 1985 in the "Khoincha Ceremony". It has also been stated in the affidavit that the gold bar was brought from Raxual and since it was purchased almost 30 years back i.e. in year 1985, he could not produce any document in support of his statement. It has also been stated by him in para 2 of his affidavit, that again in the year 1993, he gifted 100 grams of gold bar on the occasion of birth of his granddaughter (Daughter's daughter). This gold was also purchased by him from Raxaul. 17. I find from the records that the Ld. Adjudicating Authority in his discussion and findings observed that the appellant was asked to submit legal documents of the recovered and detained primary gold weighing 199 gms and 100 gms each. Shri Yogendra Prasad Chaurasia, father of Shri Ram Naresh Chaurasia, has submitted that one piece of primary gold weighing 199 gm, was given to his elder daughter-in-law (wife of Shri Harish Chaurasiya) by her parents on occasion of her marriage. Another piece weighing 100 gm was given to his granddaughter again by her daughter-inlaw's parent, resident of Parsa, Nepal. The same facts was reiterated by Shri Ram Naresh Chaurasi....
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.... benefit of doubt needs to be extended in this case to the appellants as the impugned gold is not conclusively proved to be of foreign origin and smuggled. Hence the impugned order is set aside and the appeals are allowed with consequential benefit to the appellants." 20. We further take note of the fact that the Hon'ble High Court of Calcutta in the case of Nand Kishore Sumani Vs. Commissioner of Customs, Central Excise & Service Tax, Siliguri (supra), the Hon'ble High Court has observed as under : "7. It is true that as per the above provisions of Section 123 of the Customs Act, 1962 it is not required that gold should contain foreign markings and even gold in primary form or jewellary could also be covered as per the language of the provision. But whether onus of Indian origin on any primary gold or jewellery bearer is cast upon the person in possession of such gold. It may be appreciated that when the provisions of Section 123 of the Customs Act, 1962 were enacted the Gold Control Act was also in operation and gold was considered to be a very sensitive commodity. There was subsequent liberalisation in import policy with respect to gold and even foreign marked gold w....
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....ted to have sold the goods to the appellants. This has also been observed by the Commissioner that M/s. Chauhan Zevares have subsequently stated that they were not sure that the gold under seizure was the same as was purchased from them. Naturally a person who has sold the gold, cannot confirm whether the gold seized by the Customs Officers from that person, is the same gold or not. But the said statement made by M/s. Chauhan Zevares further confirms that the sixteen pieces of gold were, in any case, purchased by Shri Kapildeo Prasad from the said M/s. Chauhan Zevares Pvt. Ltd. 13. The Tribunal in the case of S.K. Chains v. Commissioner of Customs (Prev.), Mumbai reported in 2001 (127) E.L.T. 415 (Tri. - Mum.) observed as under : - "7. Thus, today there exists a very peculiar situation. On the one hand the Customs Act considers it necessary to ask a person to establish the legality of the origin of the gold seized from him while on the other hand in pursuance of the relaxations made in the Import Policy and the Baggage Rules framed under that very Act, there is a flood of foreign marked gold in the town. Such gold changes hands several times on importation. Since ....
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....er-in-Original dated 6-2-2014, Shri Ajay Kr. Saraff of M/s. Saraff Jewellers has confirmed to have supplied the gold bars made out of jewellery, purchased by him. Minor mismatching of difference in weight as calculated by the Adjudicating authority will not make the bills as an afterthought. There could be non-observance of provisions of some other enactments like income-tax or sales tax laws but the same cannot be grounds for confiscation of goods under Section 111 of the Customs Act, 1962 when there is no iota of evidence that seized gold bars are of foreign origin or smuggled into India. Suspicion/presumption howsoever strong cannot take the place of an evidence. 8. In view of the above observations and the settled proposition of law, present appeals filed by the appellants are allowed by setting aside the order-in-original dated 6-2-2014 passed by the Adjudicating authority with consequential relief, if any." 21. In view of the above judgements, as the noticees have explained the source of procurement of gold, which is not denied by the Revenue, further having no mark on the gold and purity of gold is also not in conformity of the foreign gold, the benefit of doubt ....
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....ned Consultant, reiterates the findings of the original authority and the appellate authority. He submits that the corroborative evidence can be used as a substantial evidence, as held by the Honourable Supreme Court in the case of Naresh J. Sukhawani v. Union of India reported in 1996 (83) E.L.T. 258 (S.C.) wherein it was held that the statement of the co-accused, recorded under Section 108 of the Customs Act, 1962, inculpating himself as well as the petitioner can be used as a substantive evidence. Shri Roy has also invited my attention to the decision of the Honourable Tribunal in the case of Mohmedbhai Asrafbhai Kimsarwala v. Collector of Customs reported in 1991 (52) E.L.T. 573 (Tribunal), wherein it was held that the statement of an accomplice without corroboration would not be sufficient to prove the guilt, and when there is a knowledge of involvement, personal penalty can be imposed. It was also held that before acceptance of the statement of the accomplice, some corroboration from some independent source is called for. 5. After hearing both sides and on going through the Orderin- Original and the Order-in-Appeal, it is observed that the appellants were penalised s....
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....n the presence of the Director of the company and the Superintendent of Central Excise. Further, I find that both the authorities in their orders have admitted that there is no direct proof of the complicity of the appellants and there is suspicion against each of the appellant and on the basis of that suspicion, the appellants have been imposed penalties. It is pertinent to note that the Tribunal in various decisions cited supra by the Learned Counsel for the appellant has consistently held that for imposing the personal penalty under Section 114(i) of the Customs Act, 1962, there should be acceptable legal evidence on record about the acts of commission or omission by the appellant. Further in order to hold that the appellant has abetted in the commission of the offence, there has to be a knowledge on the part of the appellant regarding the illegal activities of the exporter whereas in the present case no corroborative evidence has come on record which pinpoint that the appellant had the knowledge of the illegal activities of the exporter company. In the case of Commissioner of Customs, Mumbai v. M. Vasi cited supra, the Tribunal has held that abetment presupposes knowledge of th....
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.... this, PW-2 says he does not know the details of panchnama because he was not party to panchnama. PW-2 also says PW-1 had called the panch witnesses and they were taken from "our" office to the said premises. If that was so, why were the panch witnesses not examined. PW-2 also says, though he was a member of the search party, he does not remember the mode of transport that was used to go to the said premises from their office. One can understand he may not remember the vehicle details but "mode of transport" is unbelievable. If I have to accept the submission of Ms. Mane that dehors the panchnama, in view of the confession recorded under Section 108, the Court can still convict the accused, then I ask myself why should they even take any panch witness and why should any one go through the trouble of recording of panchnama and producing the panch witness at the time of trial. Moreover, if I have to simply accept the statement recorded under Section 108 as gospel truth and without any corroboration, I ask myself another question, as to why should anyone then go through a trial. The moment the Customs authorities recorded the statement under Section 108, in which the accused has confe....
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....n." 10. Ms. Mane relied on the judgment of the Apex Court in Ramesh Chandra v. State of West Bengal [AIR 1980 Supreme Court 793] to submit that customs officers are not police officers and the statement recorded under Section 108 of the Customs Act, 1962, is admissible in evidence. I have to be candid that I have no quarrels with the preposition submitted by Ms. Mane. The issue is, can that statement be accepted blindly without corroboration, and the answer is no." 12. In view of the above discussion, I hold that the Ld.Commissioner(Appeals) has rightly dropped the penalty against the Respondents as there is no corroborative evidence on record in support of the statement made before DRI Officers which were retracted on first available opportunity before the Ld.CMM and no cross-examination of any witness has been granted to the Respondents. Therefore I do not find any merits in the Appeals filed by the Revenue. Accordingly, the same are dismissed." 25. As in this case, the Noticee No.(5) & (6) have been implicated on a later stage when investigation was going on in some other cases and the Noticee Nos. (1), (2) & (3) never made any statement regarding p....