AI Drafter 
TaxTMI 
TaxTMI 
2024 (11) TMI 1147
X X X X Extracts X X X X
X X X X Extracts X X X X
....962. 1.1 The brief facts of the case is that the officers of Airport Intelligence Unit, Ahmedabad found that Shri Jignesh Savaliya working as Duty Officer, M/s Globe Ground India on 04.06.2019, to be behaving in a suspicious manner with a passenger in the Aerobridge of Bay No.32 and found to be in possession with yellow metals. The officers conducted personal search of Shri Jignesh Savaliya whereby it was found to him carrying 9 brown 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 smugglin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Sections 111(d), 111(i), 111(I) and 111(m) of the Customs Act, 1962 and demanding customs duty and imposition of penalty under Section 112(a) & 112 (b) and Section 114A & Section 114AA read with Section 123 of the of the Customs Act. Appellant was also issued show cause notice whereby it was alleged that the Appellant had also given finance to Shri Rutugna Trivedi, which was used by him to procure 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. In Adjudication, the adjudicating authority vide impugned order dated 29-11-2021 confirmed the charges and demands proposed in Show Cause Notice. He imposed the penalty on Appellant under Section 112(b)(i) of the Customs Act 1962. Being aggrieved, the appellant preferred appeal before this Tribunal. 2. Shri Hardik Modh, Learned Counsel appearing on behalf of the Appellant submits that the respondent ought to have appreciated that there is no iota of evidence to show that the Appellant financed Shri Rutugna Trivedi and his associates for smuggling of gold in India. S....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... cannot be sustained. 2.3 He also argued that even otherwise, the Appellant is not concerned with the documents/emails retrieved from the pen-drive recovered from the premise of Ms. Nita Parmar in the absence of any other documentary evidence to show that the Appellant was involved in business of smuggling of gold. Third party records cannot be relied upon in the absence of direct link of the transactions or corroborative evidence. He placed reliance on the following decisions:- * Commissioner of C. Ex. Indore Vs. Prag Pentachem Pvt. Ltd. - 2018 (360) ELT 1025 (Tri. Del.) * Commissioner of C. Ex. & S.T. Raipur Vs. P.D. Industries Pvt. Ltd. - 2016 (340) ELT 249 (Tri. Del.) * Habib Uz Zaman Vs. Commissioner of Customs, New Delhi - 2021 (376) ELT 666 (Tri. Del 2.4 He further submits that Airport Intelligence Unit carried out search at factory and residential premise of the Appellant. No incriminating documents were found. Even no evidence whatsoever was found to substantiate the allegations of the Revenue that the Appellant financed to Shri Rutugna Trivedi for smuggling of gold. There is no iota of evidence to even show that after smuggling of such hug....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Appellant transferred huge amount of cash as mentioned in the impugned order. Therefore, the imposition of huge penalty disproportionate to the amount involved in the matter is legally not sustainable. 3. Shri Girish Nair, Learned Assistant Commissioner (AR) appearing on behalf of the revenue reiterates the finding of the impugned order. 4. We have considered the submission made by both the side and perused the records. 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 goods or five thousand rupees, whichever is the greater; 4.1 From the peru....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Appellant was involved in smuggling of gold activity. However statements of said persons remained uncorroborated during the investigation. Of course, no offence should be established merely based on the statement of third party and without corroborative evidence and without granting cross examination of person whose statement alone is relied upon. We have also gone through the statements of persons relied upon by the revenue and upon perusal of these statements we nowhere found that the Appellant had knowledge about the use of fund in smuggling of gold. 4.4 We also find that in the present matter Airport Intelligence Unit carried out search at the Factory and residential premise of the Appellant. No incriminating piece of paper, records, details were found to substantiate the allegations of revenue that the Appellant financed to Shri Rutugna Trivedi for smuggling of gold. As per the department Shri Rutugna is 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. 4.5 Fro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....heet recovered from the third party and statements of third party. The said printout at the most shows that Shri Rutugna Trivedi has borrowed money from the appellant. Now how that borrowed money was accounted for by borrower and use thereof is not relevant to the appellant. 4.8 From the above-reproduced section 112(b) it can be seen that penalty can be imposed only if the individual is in knowledge of the act of smuggling. 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 he 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 ....