TaxTMI 
TaxTMI 
2023 (8) TMI 359
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....017. 2.1 Further, an intelligence was gathered that at 32. Nalini Seth Road, Kolkata 700007, there was actually three shops under the control of Shri Bapi Das and Shri Gobinda Das (the appellant) brother of Shri Bapi Das, both of whom are in the same business of smuggling of gold. One at third floor having the shop No.305 and the other at 5th floor having two rooms at Room Nos.505 & 509. The said shops were attempted to search on 24.04.2017 and it was found that both the shop cum office premises at 5th Floor were under lock and key. On local enquiry, it was found that the rooms were not open since 22.04.2017. Thereafter, room nos.505 & 509 were sealed and intimation was given to local Police Station i.e. Posta Police Station. 2.2 Summon was also issued to Shri Bapi Das. In room No.305, one Shri Bikash Sarkar, staff of that shop cum office premises named M/s G.D.Gold House, honoured the search authorization and allowed the DRI officers to search. Additional three employees of M/s G.D.Gold House were also found to be present in the shop namely, Shri Nathuram Saha, Shri Haralal Das & Shri Rakesh Saha. Shri Bikash Sarkar revealed that the owners of the shop cum office premises were S....
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....shi Taka as he lost his job, he contacted Shri Bharat Biswas and Shri Shyam Sarkar for some earnings and they gave him a proposal of carrying smuggled gold from Ranaghat to Kolkata or Hridaypur and deliver the same, for which, he will get money of Rs.1000/- per trip. Shri Shyam Sarkar used to call him at the new house of Shri Bharat Biswas and used to handover him the gold smuggled from Bangladesh for carrying to Kolkata. Shri Bharat Biswas was involved in illegal trade of foreign currency also. He involved himself in gold smuggling work since February, 2017 and used to carry smuggled gold from Ranaghat to Kolkata. Initially, he along with Shri Shyam Sarkar used to deliver the smuggled gold at Hridaypur but later, used to deliver at Burrabazar. One person named Shri Bapi Das alias Chhotobabu used to take delivery at Hridaypur. Some employees of Shri Bapi Das used to take delivery at Burrabazar. Sometimes, Shri Shyam Sarkar or Shri Bapi Das or Shri Bharat Biswas used to give him his commission. He further submitted that Shri Shyam Sarkar or Shri Bapi Das or Shri Bharat Biswas used to contact him over phone. He also submitted that that neither he nor Shri Shyam Sarkar has any legal/l....
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.... Das (the Appellant) and his brother Shri Bapi Das. They could not produce any legal/licit documents for the recovered cash. 2.9 Seized gold was also tested in Customs House Chemical Laboratory, Customs House, Kolkata and the purity of the gold in the samples varies between 99.6% to 99.8% by weight. 2.10. On 12.06.2017, a notice under Section 150 of the Customs Act, 1962, for disposal of the seized gold, was issued to Shri Shyam Sarkar and Shri Asit Roy, who did not stake any claim of the seized gold. 2.11 Thereafter, on the basis of the further investigation, a showcause notice dated 13.10.2017 was issued to Shri Bharat Biswas, Shri Shyam Sarkar, Shri Asit Roy, Shri Bapi Das and Shri Gobinda Das (the Appellant) for absolute confiscation of 140 pcs. of gold biscuits recovered during investigation and for imposition of penalty on the appellant and for seizure of currency amounting to Rs.43,12,280/- and for imposition of penalties on all the appellants. 2.12 The matter was adjudicated wherein it was concluded that the seized currency and gold of 140 pcs biscuits were absolutely confiscated and penalties on the co-noticees were imposed and a penalty of Rs.4,88,18,000/- was imposed....
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....Das. There is no evidence that Gobinda Das received and dealt with smuggled gold. Telephone Number used by Gobinda Das has not been proved and there is no evidence to that effect. Gobinda Das came to the picture when his shop premise was searched and some Indian Currency was recovered. The appellant disowned the ownership of the Indian Currencies. The statements of the employees were not enough to conclude that the Indian Currencies were the sale proceeds of the smuggled gold. The employees' statements are not corroborated by any other evidence. Their statements are not relevant since the Adjudicating Authority did not verify the same in terms of Section 138B of the Customs Act, 1962. Department did not proceed to investigate further in this matter from the buyers of the gold from whom Indian Currencies were collected by the employees. Low consumption of electricity and other documentary evidence for not carrying on business is not sufficient for holding the Indian Currency as sale proceeds of smuggled gold. Non-appearance in response to Summons, ipso facto does not mean that the appellant was involved in this smuggling. There is no evidence that the Indian Currencies were the sale....
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.... that during the course of investigation, in the statements of Shri Shyam Sarkar and Shri Asit Roy nowhere was recorded they have met the appellant or they were smuggling gold for the appellant. In fact, they have mentioned that they were working for Shri Bharat Biswas and Shri Bapi Das, co-noticee to the show-cause notice. Further, during the search of the premises of the appellant, four persons, namely, Shri Nathuram Saha, Shri Haralal Das, Shri Rakesh Saha and Shri Bikash Sarkar were found and from the possession of Shri Nathuram Saha and Shri Rakesh Saha, cash was recovered and small bag containing an amount of Rs.3,78,500/- was recovered from the drawer of the office, but these four persons, namely, Shri Nathuram Saha, Shri Haralal Das, Shri Rakesh Saha and Shri Bikash Sarkar, were not made party to the show-cause notice from whose possession, the huge cash has been recovered and whose statement, were replied to say that the said cash recovered is the sale proceeds of the smuggled gold. Moreover, none of the buyers of the said alleged gold sold by them was interrogated . Moverover, the statement of the appellant was never recorded during course of investigation. These facts ar....
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.... the appellant is that in view of retraction made on 29-7-99 where it was specifically stated that it was sale proceed. The appellant is relying upon the decision of the Tribunal in the case of Ramchandra (supra). In this case, the Tribunal held as under :- "It is also seen that the charges under the Gold (Control) Act has been dropped against all the persons to whom show cause notice has been issued and the charges under the Customs Act has been dropped against the other two. It would appear that the penalty of Rs. 50,000/- on the appellant has been imposed for breach of Section 121 of the Customs Act. Before violation of Section 121 is established 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 Custom authorities." 11. Further, in the case of Hem Raj Soni Vs. Commissioner of Customs, Jaipur reported in 2014 (308) ELT 600 (Tri-Del.), this Tribunal has observed as under : "7. The Hon'ble Punjab & Haryana High Cou....
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....ls Vs. Chief Commissioner of Customs, Chennai I reported in 2016 (331) ELT 173 (Mad.), has observed as under : "15. For invoking the provisions of Section 121, the following two pre-conditions have to be satisfied : - a. The sale proceeds should relate to smuggled goods. b. The sale should have been made by a person having knowledge or reason to believe that the goods are smuggled goods. 16. In the case on hand, there is absolutely no evidence to show that the said sum was relating to the sale proceeds of smuggled goods, which were sold by the petitioner, who was having knowledge or reason to believe that the goods are smuggled goods. 17. .................................................................................... 18. Even before the appellate authority, no evidence was produced to prove that the said sum was relating to the sale proceeds of the smuggled goods, which were sold by the petitioner herein, who was having the knowledge or reason to believe that the goods are smuggled goods." 13. In the light of the above judicial pronouncement and the facts and circumstances of the case, we find that no evidence has been adduced against the appellant for invol....
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....proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice." In the light of the above observations by the Hon'ble High Court of Punjab & Haryana, we hold that as the statements which have been relied upon the adjudicating authority have not been examined in terms of Section 138 (B) of the Customs Act, 1962, therefore, the said statement cannot be relied upon to impose penalty on the appellant. 15. In view of the above observations, we further take note of the fact that on similar set of facts in the appellant's own case, this Tribunal vide Final Order No.75415/2023 dated 12.05.2023, has observed as under : "13. The Departmental Representative reiterated the findings of the Adjudicating Authority in paras 38.25.1 to 38.25.6 and para 38.29 to establish the role of the Appellant in the seizure and subsequent confiscation of the gold biscuits. He relied upon the decisions cited by the Adjudicating Authority in the para 38.25.1 of the O-i-O in support of his argument that the statement of a co-accused can be relied upon and it is an admissible evidence. 14. Heard both sides and perused ....
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....ming Shri Subhash Dudani who had given such foreign exchange to him for delivery at Hong Kong- Statement of Shri Dudani under Section 108 of the Customs Act, 1962 named Shri Sukhawani who had given the foreign exchange to him- Statement of co-accused Shir Dudani can be used as a substantive evidence connecting the petitioner with contravention of illegal export of foreign exchange-Section 30 of the Evidence Act, Section 161 of the Criminal Procedure Code, 1973." Thus, in view of the said observation I find that the evidence furnished by Shri Bushnupada Dey to be credible and reliable. Further, I find that the defense that the mobile telephone used by Gobinda Das was registered in the name of another person, it is usual practice of persons engaged in clandestine activities like smuggling of gold. I find Gobinda Das has used this ploy to evade the investigating agencies and also evade the legal consequences of being involved in such nefarious activities. In view of the aforesaid, the defense by Shri Gobinda Das @ Gobindababu that the mobile Number 8276875110 belonged to another person and thus the Call Details cannot be attributed to him is liable to be rejected outright. 38.25.6.....
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....s alone it cannot be concluded that Mr. Dey was carrying the gold for the Appellant. 18. Next evidence relied upon by Revenue is that in another case 140 pieces of gold was seized from G.D.Gold House in Burrabazar, whose proprietor was one Mr.Gobinda Das. It was inferred that the Gobinda Babu mentioned by Mr. Dey and the Gobinda Das proprietor of G.D.Gold House were one and the same. This inference is not supported by any evidence. If both are one and the same Mr. Dey could have easily mentioned Gobind Babu as the proprietor of G.D.Gold House, in his statement. In his statement Mr. Dey has stated that he knows that Gobinda Babu has an office in Sonapatti at Burrabazar. When he knows details of that extent he could have easily referred him as the proprietor of G.D.Gold House. Hence, we find that the inference by the Revenue the Gobinda Babu referred by Mr. Dey and Gobinda Das, Proprietor of G.D.Gold House are one and the same is without any supporting evidence. 19. Revenue has mainly relied upon the statement of Mr Dey to implicate the Appellant in this case. They have relied upon some decisions in the Order-in-Original to support their claim that the statement of the co-accus....