TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1648
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....al. 3. The penalties imposed on the appellants is as per the following Table : Name of the Appellant Role Played Penalty imposed Rs. Shri Vivek Kanodia Main person 10,00,000/- Shri Nabin Khandelwal Company 5,00,000/- Shri Naresh Khandelwal Company providing IEC Code 5,00,000/- Shri Amit Jaiswal Godown owner 50,000/- Shri Sanjay Giri Misc. 50,000/- Shri Santosh Kumar Driver 50,000/- 4. The Ld.Counsel appearing on behalf of the above Appellants provides the chronological details of the case, which is reproduced below : Dates Events 07-08-21 Officers of Directorate of Revenue Intelligence (FRI) searched Godown No.1-D, Vidya Complex-1, Kharial, Dankuni 712370, when a Panchnama was drawn. 08-08-21 DRI inventorised the goods and sealed the godown. 08-08-21 Seizure Case being No. DRI/KZU/CF/ENQ-06(INT-03)/2021 was registered. 08-08-21, 16-11-21 & 21-01-22 Statement of Sri Rakesh Gupta, owner of Godown was recorded. 27-08-21 Statement of Sri Amit Jaiswal was recorded. 31-08-21 Statement of Sri Vivek Kanodia was recorded. 24-01-22 Sri Sashikant Das, a new employee of M/s JN K....
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.... said offence. It is extremely shocking to note herein that the said 2 persons, named above, had been expunged from the said proceedings, thereby releasing them from the shackles of the judiciary. But what is strange to note herein is that the said Rakesh Gupta was the main person behind the perpetration of the said offence, and instead of arraigning him, and knowing fully well that the owner of the said Godown is a key suspect in the said offence, the Department miserably failed and went beyond the four corners of the law and expunged them from the said proceedings. Moreover, no statement has been recorded from the said Appellant and thus, the allegations are completely brazen, vague and improper. Moreover, on the basis of mere surmise and conjectures, and without any specific evidence, the Authority had illegally imposed the penalty on the Appellants. Moreover, there is no specific admission of the part of the Appellant (namely Mr. Nabin Khandelwal( wherein it would be established that the Appellant had paid the amount to the godown owner for alleged renting of the said godown). Not only this, there is no specific admission or evidence to establish that the other Appellant (namel....
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.... [Santosh Kumar] herein has, at any point of time, made any payment in favour of Mr Vivek Kanoria nor has he ever indulged in commission of any offence whatsoever. The said allegation is completely based upon the statement without any independent corroboration thereof. Moreover, no statement has been recorded from the said Appellant and thus, the allegations are completely vague and improper. Thus, although the Appellant knew that smuggling is an offence, yet the fact that the said alleged goods were allegedly imported and stored was not known to the Appellant. As the Appellant being an honest employee, and earning barely to sustain his and his family's daily needs, the said Appellant had never committed any offence of like nature, nor ever wishes to commit. ⮚ Moreover, the alleged smuggled goods is not notified under Section 123 of the CA,'62, therefore the burden is on the department to prove that seized goods is illegally imported into the country and is of foreign origin. Hence, it is abundantly clear that the Department has squarely failed to prove that the seized goods is of foreign origin and is illegally imported into the country and any allegation pertainin....
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....muggled stocks. In the case of the latter penalty, the Department has to prove further that the person proceeded against was concerned in the smuggling. [para 33]. 5.3 Nowhere in the said investigation have the Appellants been directly implicated The authority concerned had also failed to appreciate that nowhere in the statement of any of the said accused, has this fact come to light with regards to the ownership of the said smuggled goods. It is also pertinent to mention herein that none of the accused have come forward to claim the said goods while being served with notice under Section 150 of the Customs Act. All this clearly establish the fact that the persons did not realise which were the goods so seized and, hence, the allegations framed by the authority concerned are baseless and have no locus to stand on. He cannot be accused for which had has not committed any offence. The authority thereafter has also failed to appreciate that the appellant have in no way committed the said offence. Moreover, the only alleged conversation the Appellant had, was the prime evidence basis which the Appellant was arraigned by the Department. Thus, basing entirely o....
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....ducted, thereby proving that the said case has no merit whatsoever. Barely on the basis of the packing materials, the Authorities had established that the said goods were smuggled nature, and without any shred of evidence, which clearly proves that there lies no preponderance of probability. 5.6 No Knowledge, No Mens-Rea - No Penalty The Appellant has no knowledge of any smuggled goods and/or foreign origin goods, and thus, the vires of Section 112 of the CA,'62 does not meet and thus the said Penalty should not have been imposed on the Appellants. Moreover, the Appellant was in no way involved in the alleged commission of the said offence. The Appellant was made a scape-goat by the owner/possessor of the said imported goods, who had not be arraigned into the said proceedings. Reference is placed on a decision of the Hon'ble High Court at Bombay in the case of SHYAM SWAROOP MUNDRA Vs UNION OF INDIA [2005 (185) E.L.T. 16 (Bom.)]. From, the present scenario it is clear that there is nothing on record to prove the alleged act of smuggling on the part of your appellant, and to substantiate the stands, a case being Shankeshwar Metal Corporation -vs- Commissioner of Cus....
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....ng the Appellant to this present proceedings, whereas the main perpetrators remain scot-free, smears a black mark on the chastity of the judiciary and is bad in law and should be nipped in the bud. Moreover, it is a known principle of law that if a person has no knowledge of the alleged commission of the offence, Mens-Rea cannot be established and thus penalty cannot be imposed. Moreover, it is a thumb-rule theory and/or principle of law that a person who doesn't have knowledge of the alleged omission of the said offence cannot be penalized as no knowledge clearly evinces no Mens Rea, and if there is no mens rea on the Appellant, then, as per law, the said Appellant cannot be penalized. 4. The Ld.AR for the Revenue submits that on a specific intelligence gathered by DRI, the officers have searched the godown No.1D, Vidya Complex-1, Kharial, Dankuni-712310 on 07.08.2021. They found large amount of firecrackers having China origin were stored in 2000 to 2515 gunny sacks. The total value of the goods was Rs.5,82,12,560/-. Thereafter detailed investigation was taken up right from the owner of the godown to all the concerned persons. The statements have been recorded and corroborativ....
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.... Any other class of goods which the Central Govt may notify the officials, can have a reasonable belief and take up the further proceedings. In these cases, the burden to prove the non-foreign nature of the goods is on the person from whose possession the goods are recovered. 9. On the other hand, if the goods in question are not notified by the Central Govt., then the burden entirely shifts to the Customs Officials so as to prove that the goods are of foreign origin. 10. In order to attract the provisions of Section 123, to fasten the burden on the person possessing the goods, the items in question, i.e fire-crackers, should be Notified by the Government, which does not seem to be the case here. 11. Coming to the Revenue's belief about the Chinese Origin of the goods, I have gone through the Panchanama. The relevant portion of the Panchanama reads as under : 12. It is seen from the Written Panchanama that there is general assertion that the goods are of Chinese Origin. In the second Panchanama, which is typed, the words used are "In some cartons found marking " Made in China". Under Annexure A wherein the value has been quantified, in respect of 13 different types o....
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....et regulatory fees at, jalpaiguri, which was never rejected or investigated by the deptt. Ld. Adjudicator has completely disregarded the legal and factual position of the case and went on confiscating the goods & trucks and penalizing the appellants. Since there is no evidence of doing so, the impugned order is set aside completely." 10. We do agree with the fact that the Revenue has failed to discharge their obligation to prove that the impugned goods are of smuggled in nature with any cogent evidence. 11. In that circumstances, we do not find any infirmity in the impugned order and the same is upheld and the appeals filed by the Revenue are dismissed. (Operative part of the order was pronounced in the open court 2022 (382) E.L.T. 716 (Tri. - Kolkata) LALTANPUII Versus COMMISSIONER OF CUS. (PREVENTIVE), NER, SHILLONG 12. In view of the above, we find the betel nut being non notified goods; burden to prove the fact of smuggling lies on the department and the same has not been discharged; the report of ADRF, Mangalore cannot be relied upon. On the issue of goods being held to be unfit for human consumption, we hold that as the go....
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....ecord to establish the foreign origin of these goods, or of illegal importation of the same. These goods were seized when they were being transported within the country via SLR No. 05853 of Train No. 15909 (Awadh Assam Express) which do not cross any international border from the place of origin to destination. 4.11 I do not find any merits in the impugned order of Commissioner (Appeals). 13. In the present case, the goods are not notified in terms of Section 123. The Revenue has not brought in any cogent evidence towards the foreign origin of the goods. No documentary evidence with the photographs of the seized goods have been brought in to show that the goods are of Chinese origin. The goods have been seized within the territory of India in Dankuni and is not a seizure in the border. No follow-up investigation has been conducted as to how the restricted items by DGFT under the Foreign Trade Policy could have crossed the Customs barrier in the sea / land so as to land at the godown wherein the goods have been seized. All these factual details would lead to conclusion that the ratio of the case laws cited above would be squarely applicable to the present case also where....
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....equence would be that, in the absence of the circumstances specified in Section 9D(1), if the adjudicating authority relies on the statement, recorded during investigation in Central Excise, as evidence of the truth of the facts contained in the said statement, it has to be held that the adjudicating authority has relied on irrelevant material. Such reliance would, therefore, be vitiated in law and on facts. 18. Therefore, apart from not fulfilling the onus of proving the foreign origin of the goods, it is seen that the investigation and proceedings have been conducted in a casual manner, giving a go by to the principles of natural justice. It is an admitted fact that the restricted goods, i.e. fire-crackers have been found in the godown. The storage of these goods not only violates the Customs Act provisions if smuggled, but also violates several other laws of the country. Therefore, no doubt, the goods in question could not have been legally stored without fulfilling several other statutory provisions under different laws. The appellants herein may have violated the provisions of other statutes, but we are not concerned about the same in the present proceedings, which is only ....
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....ned persons agreed to their proposal. Accordingly the they, the DRI officers disclosed that the Said goods are stored in Godou NO. 0 1D, Vidya Complex 1, Ground Floor, Khaid, Dankei Pin 712310 and they also showed us a Search Authorisation issued by the competent Authority of DRI Kallata. Then we , the above mentioned Pranchas along with the team of DRI officers entered in the vidy a Complex 1 at about 19:00 hrs on 07.08.2021. On entering the said premises one person come forward and and asked about ams identities. Then DRI officers showed their official identity cards & search authorist. and also explain their Pu ~ blain their purpose of visit gg PS maity Burun Maite 07.08.21 Shri Bulli Mai JEG Č4/RAHUL 7. 3.21 (5) introduced us as independent witnesses for the Said purpose of visit of DRI officers. Then the said person disclosed his identy as the caretaker of vidya Complex 1, Shri Bulle Mariti and he haunaund the search Authorisation, isused by the competent Authority of DRI, Kalket by putting his dated signature. On questioning he showed the Godown NO. ID and informed us that hast night same vehicles arrived with cartons & loaded/ stored the goods in t....
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....O - Sk Munna, Address - Dankun Kharial, Muslim Para, Dankuni, Pin- 712310 |Munnarpur Mallick Para, Pin-712314 We, the above named Panchas, on being called upon by the officers of Directorate o Revenue Intelligence (henceforth referred as DRI officer), Kolkata Zonal Unit presented i.e. on 08-08-2021 in front of Vidya Complex 1, Opposite Coal Indi Township, Kharial, Dankuni, Pin - 712310 at about 11:30 Hrs. The DRI officers explained to us that huge quantity of smuggled firecrackers of Chinese origin is stored inside Godown explained to us that yesterday, i.e. on 07-08-2021, a TRI Officers searched the Godown based on specific intelligence and found the Chinese origin smuggled firecrackers. wever, due to late hours and unavailability of labours and other logistic support Teratred examination of the goods could not be doffe. Then on that day.i.c. 07.08.2021. the promesses The fact of search and sealing of the godown was intimated to the idegenetic The DRI officers further informed us that their purpose of visit today Is that their purpose of examination proceeding the gooceedings. Realizing the gravity of the situation, we agreed to their proposal. They further informed....
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.... sealed uv samples were drawn from similar types of en e drawn from similar types of sacks and kept in two PVC bags and Shri Amal Maiti alias Bullu, Representative of Vidya Godown Complex. the labourers were instructed to put adh every completion of examination, the labourers were instructed Complex goods under Section 110(1) of the Customs Act, 1962 on reasons to believe that those goods goods under Section Tosacos to minimize the wastage. Then the officer of DRI seized the are liable to confiscation under the Customs Act, 1962 and a Supradnama was issued tu Shri Ritesh Gupta, the owner of the godown for safe custody of goods seized The csu to Shri ods seized. The Godown No Shri Ritesh Gupta, Owner of the Pancha-1 Routan Das DRI 0 08 08.2021 Uht Officer 0/8/202 MRIDUL GHOSH I AM Pancha-2 Dilshod AM Shri Amal Maiti alias Bullu 8/8/21 Busen Maill 8/8/2021 (12) 1 of Vidya Complex was then again sealed Complexa Complex 1 and Shri Amal Maiti alias Bullu, Representative of Vidya Godown Complex. The entire proceedings was completed pe Gupta and Shri Amal Mai l , peacefully in presence of us and said Shri Rites any property of the sa godo....