TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 496
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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/- (Rupees Five Lakhs only) has been imposed on him....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., 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 also order for confiscation of Indian currency amounting Rs.30,00,000/- (Rupee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ees 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 appears from the records are itself contrary. At page 67 of the Appeal Memorandum, the purported statement dated 31.01.2016 as purportedly recorded....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gi -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 441 (Tri.-Del.) - Pradeep Mahajan -Vs- Commissioner of Customs, New Delhi * 2009 (245) ELT 820 (Tri.-Kol.) - Jugal Kishore Sadani -Vs- Commissioner of Customs (Prev.), WB (iv) With regard to imposition of penalty....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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.)] * Ajay Saraogi Union of India [2023 (386) ELT 333 (Cal.)] (iv) It is submitted that the finding with respect to the cash INR seized from the appellant no. 2 is that the same would have been used for the purpose of purchase of 2 kgs. of gold from the said Birendra Ku....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntion 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 under Section 112 of the Customs Act, 1962; (ii) confiscating Maruti Alto car bearing Registration No. WB-74G-6012 under Section 115(2) of the Customs Act, 1962 and imposing redemption fine of Rs.37,000/- in lieu of such confiscation; and, (iii) confiscating cash INR amounting to Rs.48,00,000/- of the appellant no. 2 under Section 121 of the Customs Act, 1962, should be s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 documents to show licit procurement of the said gold and hence, the said gold was seized by the DRI Officers. The appellant no. 1 was also found to be in possession of Indian currency amounting to Rs.30,00,000/-, which was also seized. By his statement dated 13.01.2016, the appellant no. 1 has named one Shri Samir Sah, the appellant no. 3, to be the intended purchaser of the said gold, who had purportedly sent his father, Shri Binod Kumar Sah, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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. Even his statement was not recorded. His two wives named above whose statements were recorded had shown their ignorance about these facts. Puran Singh's Counsel appeared during the adjudication proceedings before the adjudicating authority and sought cross-examination of the appellant which was allowed and in that cross-examination, he has sought to prove that Puran Singh had no such dealing with the appellant. At no stage, the adjudicating authority direc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ameer 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 the purchaser and the quantity of the gold must be established by the Customs authorities. None of these conditions in the instant case in the face of the evidence and circumstances detailed above, stands satisfied for holding that the Indian currency recovered from the Esteem car of the appellant as well as from his house along with one gold biscuit which was kept in a red pouch lying under the driver's seat of Maruti Car parked at the residence, were the sale proceeds of the smuggle....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 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 kgs. of gold from the said Birendra Kumar Gupta. Thus, we observe that there is no consistency in the findings in the impugned order with respect to the source and usage of the Indian Currency. On the one hand it has been alleged that the said money pertains to sale proceeds of gold smuggled in on earlier occasions, but on the other hand it is claimed that the said money has been brought in for purchase of 2 kgs of gold from Shri Birendra Kumar Gupta. In this case, it is a fact that there is no evid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hi 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 that the goods were of smuggled origin. (iv) the seller and purchaser and the quantity of gold must be established by the Customs authorities. 6. In this case, however, none of the requisites of Section 121 have been fulfilled - no sale has been established, identity of the buyer and seller has not been established. As a consequence, the currency cannot be considered to represent the sale proceeds of the contraband goods and, therefore, no violation of Section 121 has been made out. Since the charge under Section 121 of the Customs ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....5104/2025 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 importation of goods, is reproduced below:- "SECTION 112. Penalty for improper importation of goods, etc. - Any person, - (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or (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 con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppellant 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 referred to by the Ld. Authorized Representative of the Revenue in support of his contention that penalties are imposable on the appellants. In the instant case, Shri Birendra Kumar Gupta (appellant no. 1) and Shri Amod Kumar Shah (appellant no. 4) have been found to be involved in the smuggling of gold in this case as they were unable to furnish any valid documents for licit procurement of the same. Accordingly, the penalties imposed on these appellants have been found to be justified and thus upheld, as already observed by us in the preceding paragraphs. However, there is no evidence available on record in respect of the other two appellants (i.e., ....