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2021 (12) TMI 291 - AT - CustomsLevy of penalty u/s 112(b) of the Customs Act - Smuggling - Gold Bars - foreign origin goods or not - un-reliable and inadmissible evidence or not - case of town seizure - absolute confiscation - HELD THAT:- The appellant is not at all involved in the smuggling in gold, and therefore, penalty against the appellant under Section 112(b) of the Customs Act, 1962 has been wrongly imposed by the learned Commissioner (Appeals) Customs, Lucknow. The learned Commissioner (Appeals) Customs, GST & Central Excise, Lucknow, has also failed to appreciate that there is not a single piece of evidence to establish that the Gold was smuggled on the behest of the appellant, and the appellant is actively involved in the smuggling of aforesaid Gold bars. The order of the Adjudicating Authority as well as Commissioner (Appeals), is totally based on assumptions and presumptions and hence liable to be set aside. It is well settled principle of law that only on the basis of the statement of co-accused penal provision of under Section 112(b) of the Customs Act cannot be held sustainable in eyes of law. No evidence whatsoever has been brought on the record to prove that the appellant is somehow concerned with the said smuggled gold, in keeping, transporting or having possession of said smuggled gold. The Learned Commissioner (Appeals) Customs, Lucknow without considering the said facts imposed a heavy penalty against the appellant under Section 112(b) of the Customs Act, 1962. Penalty cannot be imposed against the appellant without any concrete evidence to prove indulgence of the appellant in smuggling of the gold - the provisions of Section 112(b) of the Customs Act are not applicable on the appellant, since the gold was neither found in the possession of the appellant nor was the appellant found to have been carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing of the alleged smuggled gold. It is an admitted fact that nothing incriminating was recovered from the appellant or from his business and residential premises. Following facts have been established in the case: (i) Admittedly, it is a case of town seizure; (ii) In view of foreign markings on 11 out of 13 gold bars seized, the appellant – M.K. Bajpai failed to discharge the onus under Section 123. (iii) The allegation of smuggling through Bangaladesh border is only presumption by Revenue, not established. (iv) Mr. Bajpai admittedly received delivery at Kolkata, which is not disputed. (v) Appellant Mr. Bajpai remained in jail for about 18 months (From 1 February 2018 to July 2019). The order in original was passed on 29.3.2019, thus Mr. Bajpai did not have proper opportunity to defend himself. (vi) Two of the gold bars (as per seizure list, and show cause notice paras 2 and 4) are of Indian Brand MMTC, total weight 1999.100 gms, valued at ₹ 61,37,237/-. (vii) Mr. Bajpai is a person of small means, and was only a carrier. (viii) The reliability of statement of Mr. Bajpai recorded during investigation is doubtful, as he has alleged coercion and duress. (ix) The complicity of Mr. G. Agarwal is not established. Only evidence brought on record is the evidence of frequent calls (as per CDR) between the appellants, and the statement of co-accused, which cannot form the sole basis of imposing penalty. (x) Mr. G. Agarwal has disowned the seized goods at the first instance, and also denied any connection of employer-employee or Principal – Agent with Mr. M.K. Bajpai. (xi) Nothing incriminating was found from Mr. G. Agarwal in the follow up search at his residence and business premises. (xii) only “Oppo” Mobile phone was recovered by GRP at Mughalsarai Jn., Panchnama of Customs, showing recovery of two mobile phones (Oppo & Samsung), raises doubt as to the genuineness of Samsung mobile phone. (xii) Although the CDR raises a strong suspicion, but in absence of details of conversation, no allegation is established against Mr. G. Agarwal. (xiv) No case of penalty under Section 112(b) is made out against Mr. G. Agarwal. (xv) Section 111(d) is not attracted on the facts herein. The absolute confiscation of 11 gold bars (excluding the two with MMTC markings), is upheld under Section 111(b) of the Act - Penalty under Section 112(b) on Mr. Girish Agarwal is set aside - penalty under Section 112(b) on Mr. M.K. Bajpai is reduced to ₹ 2,50,000/-, as he is only a carrier, and a person of small means - confiscation of two gold bars-MMTC marking/brand, weighing 1999.100 gms, valued at ₹ 61,37,237/- is set aside. Revenue is directed to return these two gold bars or the sale value (if disposed of) to Mr. M.K. Bajpai (from whose possession these were seized). Appeal allowed in part.
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