TaxTMI 
TaxTMI 
2025 (7) TMI 496
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....Lakhs only) on this appellant under Section 112(a)(i) and 112(b)(ii) of the Customs Act, 1962. 1.1. Customs Appeal No. 75837 of 2017 has been filed by Shri Binod Kumar Sah (hereinafter referred to as the "appellant no. 2") against the Order-in-Original No. 51/COMMR/CUS/SLG/2016-17 dated 07.03.2017 wherein the Ld. Commissioner of Customs, Central Excise and Service Tax, Siliguri has confiscated Indian currency amounting to Rs.48,00,000/- (Rupees Forty Eight Lakhs only) seized from him under Section 121 of the Customs Act, 1962 and imposed penalty of Rs.2,00,000/- (Rupees Two Lakhs only) on the said appellant under Section 112(b)(ii) of the said Act. The appellant no. 2 has also contested the order of confiscation of the "Maruti Alto" car bearing Registration No. WB-74G-6012 confiscated under Section 115(2) of the Customs Act, 1962, with an option for redemption of the same on payment of redemption fine of Rs.37,000/- in lieu of such confiscation. 1.2. Customs Appeal No. 75838 of 2017 has been filed by Shri Samir Sah (hereinafter referred to as the "appellant no. 3") against the Order-in-Original No. 51/COMMR/CUS/SLG/2016-17 dated 07.03.2017 wherein a penalty of Rs.5,00,000/- (....
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....of two kgs. of gold bars and as payment for the said gold, the appellant no. 3 had sent his father, the appellant no. 2, along with Rs.48,00,000/-, for collecting the said gold. 5. Accordingly, proceedings were initiated against all the appellants. 6. Subsequently, the appellants were arrested and produced before the Additional Chief Judicial Magistrate, who remanded them to judicial custody. 7. On completion of the investigation, a Show Cause Notice dated 08/09.07.2016 was issued to the appellants inter alia proposing confiscation of the impugned gold bars and Indian currency seized from the appellants, along with imposition of penalties on all the appellants. A proposal was also made for confiscation of the vehicles used in the alleged smuggling activities. 7.1. On adjudication, the ld. adjudicating authority, vide the impugned order dated 07.03.2017, has passed the following order: - "5.1. I order for absolute confiscation of 03 (three) pieces FM gold bars weighing 3.000 Kgs valued at Rs.80,76,000/- (Rupees eighty lakh seventy-six thousand only) held under seizure [details as per Inventory], under Section 111(b) & (d) of the Customs Act, 1962. 5.2 I....
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....e under the provisions of Section 112(a) (i) and 112(b)(i) of the Customs Act, 1962. 5.10 impose penalty of Rs.2,00,000/- (Rupees two lakh only) on Sri Binod Kumar Sah incommensurate to his roles played in committing the offence as mentioned here-in-before under the provisions of Section 112(b)(i) of the Customs Act, 1962." 7.2. Aggrieved by the confiscation of the impugned gold, Indian currency and the Vehicle bearing Registration No. WB-74G-6012, along with imposition of penalties, the appellants are before us. 8. The appellant nos. 1 and 4, namely, Shri Birendra Kumar Gupta and Shri Amod Kumar Shah respectively, have made various submissions, which are summarized below: - (i) The appellant 1, from the very inception, has denied the recovery of the purported foreign origin gold from his possession and in fact, such fact was so relevant that the Department had to create an illusion of the purported recording of statement giving a backdate to bring on record as if the said statement dated 31.01.2016 was the statement of the appellant recorded in Judicial Custody and that the said statement is corroborating the statement dated 13.01.2016 when the fact as it a....
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....llowing decisions in this regard: • 2019 (366) ELT 280 (Cal.) - Sampad Narayan Mukherjee -Vs- Union of India • 2023 (386) ELT 333 (Cal.) - Ajay Saraogi -Vs- Union of India • 2015 (324) ELT 641 (S.C.) - Andaman Timber Industries -Vs- Commissioner of Central Excise. Kolkata-II (iii) With regard to the confiscation of the Indian currency of Rs. 30,00,000/-, it is submitted that throughout the entire proceeding, the Department has failed to adduce any single evidence that there was any sale of goods, that too of smuggled goods the buyer and the seller has been identified and that the link between the buyer and the seller has been established and that lastly the buyer and the seller had the prior knowledge or reason to believe that the transactions entered into were in relation to goods of smuggled origin and therefore, the Indian currency so confiscated by the Ld. Adjudicating Authority is also required to be quashed and the same is required to be released in favour of the appellant. Reliance is placed on the following decisions: • 1992 (60) ELT 277 (Tri.) - Ram Chandra-Vs- Collector of Customs • 2004 (175) ELT 4....
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....000/- with him. The appellant no. 2 was put to arrest and subsequent statement dated 19.1.2016 was recorded at Siliguri Special Correctional Home when he maintained his statement dated 13.1.2016. Again statement dated 4.2.20168 was recorded from the said appellant when also nothing adverse came. The appellant no. 2 had submitted Bank Statements and Income Tax Returns, as called for. (iii) Apart from initial statement dated 13.1.2016 of apprehended Birendra Kumar Gupta, there is nothing on-record to implicate the appellants herein with the instant case. The Appellants duly prayed for opportunity of cross-examination of said Birendra Kumar Gupta and Amod Kumar Shah, which was neither allowed nor rejected by the Ld. Adjudicating Authority. It is submitted that such statement of co-accused cannot be sole basis of imposition of penalty upon these appellants and/or confiscation of cash in INR or private car of the appellant no. 2 since no opportunity of cross-examination was allowed in favour of the appellants. Reliance is placed upon the following decisions in this regard: • Commr. of Cus., Airport & Admn., Kol v. Himadri Chakraborty [2023 (386) ELT 418 (Cal.)] ....
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....tted that under Section 112 of the Customs Act, 1962, penalty is only imposable upon the person who has done or omitted to do any act which rendered the goods liable for confiscation under Section 111 ibid or who, with prior knowledge or reason to believe about such confiscable nature of the goods, has dealt with the same in any manner whatsoever. Intention to buy cannot be considered as dealing with the goods since admittedly, the goods never reached the appellants. Hence, even assuming, though not admitting, that the allegation of DRI is correct, the same does not render the present appellants i.e. intended buyers for any penal consequence under Section 112 of the Customs Act, 1962. Hence, penalties so imposed upon the appellants under Section 112 ibid are liable to be set aside and quashed with consequential relief in favour of the appellants. In this regard reliance is placed upon the following: - • Final Order No. 75104/2025 dated 23.01.2025 passed by CESTAT, Kolkata in Customs Appeal No. 76205 of 2017 [Shri Gagan Karel v. Commr. of Cus. (Prev.), Kolkata)] (vii) Accordingly, it is prayed that the order (i) imposing penalties upon the present appellants un....
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....) TMI 1156-CESTAT NEW DELHI-CA-50070 of 2020, F.O. No. 51685/2023] f. Kashi Kumar Aggarwal vs. Commissioner of Customs (Prev.) New Delhi [C.A. No. 50536 of 2022, F.O. No. 50387/2023 CESTAT, NEW DELHI] g. Sunny Kakkar vs. Principal Commissioner of Customs (Prev.), New Delhi [C.A. No. 52094 of 2018, F.O. No. 50108/2023---CESTAT, NEW DELHI] h. Deepak Handa vs. Principal Commissioner of Customs (Prev.), New Delhi & Ravi Handa vs. Principal Commissioner of Customs (Prev.), New Delhi [C.A. No. 52922 of 2019 & 52923 of 2019, F.O. No. 51520-21/2021- CESTAT, PRINCIPAL BENCH, NEW DELHI] i. Ashish Kumar Dutta, Goutam Saha, Ranjit Das & Partha Ranjan Saha vs. Commissioner of Customs (Prev.), Kolkata [C.A. No. 75118,75119,75120 &75121 of 2016, F.O. No. 77715-77718/2024- CESTAT REGIONAL BENCH, KOLKATA] 10. Heard both sides and perused the appeal records. 11. It is a fact on record that, 3 kgs. of gold were seized from the possession of Shri Birendra Kumar Gupta, appellant no. 1 in this case, on 13.01.2016 by the Officers of the DRI at Siliguri. The appellant no. 1, along with the appellant no. 4, viz. Shri Amod Kumar Shah, were not having any valid docum....
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....t identified. Under these circumstances, we are of the opinion that the order of confiscation of the said Indian currency passed by the ld. adjudicating authority is liable to be quashed and the same is required to be released in favour of the appellant. 13.3. We find that the same view has been taken by the Tribunal, Delhi in the case of Pradeep Mahajan v. Commissioner of Customs, New Delhi [2004 (175) E.L.T. 441 (Tri.-Del.)]. Relevant portion of the said decision is reproduced below: "9. Apart from this, there is no evidence excepting the bald retracted alleged confessional statement of the appellant that the Indian currency recovered from his Esteem car was the sale proceeds of 139 smuggled gold biscuits given to him by Puran Singh for sale to one Raja. According to the Department the appellant in his alleged confessional statement, had admitted that 139 gold biscuits were given to him by Puran Singh on 3-9-97, for delivery to Raja and in lieu thereof the payment in Indian and foreign currency was given to him by Raja, to be delivered to Puran Singh as price of those biscuits. But Puran Singh has at no stage admitted of having given any gold biscuits to the appellant....
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....car of the appellant. 12. Similarly, from the recovery of one gold biscuit from the Maruti car parked at the residence of the appellant and of Rs. 90,000/- from his house, no inference could be drawn that the gold biscuit recovered was smuggled one and the currency recovered was the sale proceeds of the gold biscuits. The panchnama regarding this recovery was no doubt got attested from the wife of the appellant besides two witnesses namely Sharad Malhotra and Ms. Mala Sameer Khatri, but both these witnesses have not come forward to state that Anita Mahajan, wife of the appellant admitted that the money recovered from the house was the sale proceeds of the smuggled gold biscuits and that the gold biscuit seized from the car was also smuggled one. No statutory presumption in that regard also could be drawn. 13. In Ramchandra case (supra) referred by the Counsel, it has been ruled that for establishing the violation of Section 121, the ingredients required to be satisfied are : (i) there must be a sales, (ii) the sale must be of smuggled goods; (iii) sale must be by a person having knowledge or reason to believe that the goods were of smuggled origin; (iv) seller and....
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....ermissible under the law." 13.4. A similar view has also been held in the case of J. Shivakumar v. ADG of Revenue Intelligence, Chennai [2015 (316) E.L.T. 382 (Mad)]. 13.5. As there is no evidence available on record to establish that the said Indian currency were sale proceeds of smuggled gold, we hold that the Indian currency amounting to Rs.30,00,000/- is not liable for confiscation. Accordingly, we order release of the said Indian currency to the appellant. 14. Regarding the seizure and confiscation of Rs.48,00,000/- seized from the appellant no. 2, we find that the allegation of the Department is that the said currency were sale proceeds of smuggled gold on earlier occasions. In this regard, we observe that no gold has been seized from the possession of either Shri Binod Kumar Sah (appellant no. 2) or Shri Samir Sah (appellant no. 3). Also, there is no evidence available on record to establish that any gold smuggled in by the above appellants were sold earlier. On the same time, we observe that the adjudicating authority has given the finding in the impugned order that the cash INR seized from the appellant no. 2 would have been used for the purpose of purchase of 2 k....
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....e injuries is of a grievous nature. On 20-1-1987 the appellant wrote to the Assistant Collector retracting his statement of 10-1-1987. None of this has been discussed in the impugned order which merely brushes aside the defence of the appellant for the reason that he did not complain of forcible detention and extorted statement at the earliest opportunity viz. when he was produced before the Magistrate by the Customs Officers. In addition the opportunity to cross-examine Shri Satram Das and Shri Bhaghu Sindhi and the panch witnesses has been denied to the appellant. 5. 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 th....
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....ellants has been claimed to be their trade capital and there is no evidence brought on record by the Revenue to establish that the said currency was the sale proceeds of gold smuggled into the country on earlier occasions. Therefore, we hold that the penalties imposed on the appellant nos. 2 and 3 are not sustainable and accordingly, we set aside the penalties imposed on them. 16.1. In this regard, we find it relevant to refer to the decision rendered by this Tribunal in the case of Shri Gagan Karel v. Commr. of Cus. (Prev.), Kolkata) [Final Order No. 75104/2025 dated 23.01.2025 passed by CESTAT, Kolkata in Customs Appeal No. 76205 of 2017], wherein it was observed as under: - "7. We have gone through the findings recorded by the ld. adjudicating authority in the impugned order regarding the role played by the Appellant in the alleged offence. From the findings of the ld. adjudicating authority, we observe that except the statements of Shri Pawan Prasad and Smt. Monika Yadav, there is no other corroborative evidence to establish the role of the Appellant in the alleged offence. 8. Section 112 of the Customs Act, 1962, which deals with penalty for improper impor....
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....nd the value thereof or five thousand rupees], whichever is the highest." 8.1. From the Section 112 of the Customs Act, 1962 reproduced above, we observe that penalty can be imposed under this section only when a person commits an act which renders the goods liable for confiscation. In the present case, we observe that the gold recovered from Shri Pawan Prasad and Smt. Monika Yadav has been ordered to be confiscated under Section 111 of the Customs Act vide the impugned order dated 31.03.2017 and penalty has been imposed on them for the role played by them in the offence. There is no other evidence available on record to implicate the appellant in the alleged offence. Thus, in the present case, we observe that the elements as mentioned in Section 112 of the Act are not available to impose penalty on the appellant. Hence, we hold the provisions of Section 112(a) and 112(b) cannot be invoked to impose penalty on the appellant. Consequently, we hold that the penalty imposed on the Appellant by invoking the provisions of Section 112(a) and (b) of the Act is not sustainable and hence we set aside the same." 17. We have also examined the various decisions which have been refe....