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2022 (4) TMI 85 - AT - CustomsLevy of penalty u/s 112(a)/112(b)/114A/114AA of Customs Act - Smuggling - Gold Bars - Baggage Rules - failure to satisfy the requirement of six months stay abroad stipulated for the import of gold as part of passenger baggage provided under Rule 3(1)(h) of the Foreign Trade (Exemption from Application of Rules in certain Cases) Order, 1993 - reliability of statements recorded - existence of cogent and corroborative evidence or not - HELD THAT:- In the impugned order, the Commissioner has summarised the penalties on various notices; insofar as Shri Ashruf Kullangal [appellant No.(iv)] and Shri T.K. Faiz [appellant No. (vi)], penalty has been imposed under Section 112(a) & (b). Section 112 can be invoked for imposing penalty on any person for violation specified under (a) ‘or’ (b) and it can never be for (a) ‘&’ (b) because, there is a clear and disjunctive ‘or’ between the two limbs (a) & (b), which gives no room to read the same as ‘and’ since the breach defined in (a) is distinct and that in (b) is distinct. Therefore, the penalty imposed under Section 112(a) ‘&’ (b) for alleged improper importation of goods etc. is unsustainable. For this reason alone, we are prima facie satisfied that the penalty levied at least on two of the appellants i.e., Shri Ashruf Kullangal and Shri T.K. Faiz cannot be sustained and accordingly, the same is set aside. Admittedly, the ladies, i.e., the alleged gold carriers had gone out of the airport and it is also mentioned in the Order-in-Original that they were waiting for their fellow passenger outside the airport. Secondly, there was a search on Mr. Haris, the male passenger accompanying the alleged gold carriers, which had resulted in the seizure of a letter by M/s. AU Jewellery, Dubai. These two vital facts are not only ignored before levying the penalty, but has never been discussed in the OIO - hence, there has been some confusion on the part of the Revenue and it appears that there is something which is not properly explained and brought out either in show-cause notice or Order-in-Original. Also, it is found that those statements are also inconsistent and hence reduced to be unreliable, and therefore, their evidentiary value would have to be very carefully examined before counting on them. Admittedly there are no independent eye witnesses who have been examined, nor any documentary evidence placed on record to corroborate statements recorded under Section 108 ibid - un-corroborated statement of one cannot become a conclusive proof to crucify another, without following the process of law. This becomes rather a necessity when only statements, that too which are inconsistent, are relied upon, like in the case on hand. Such statements therefore, could at best be a lead, requiring further investigation, by the concerned authorities. But to our dismay, apparently, there is no such move as could be seen from the OIO or the documents placed before us. Hence it is our responsibility to critically analyse, before applying such statements here. 36 Kgs of gold allegedly smuggled on the earlier occasions - HELD THAT:- Admittedly, there is no direct evidence for this. The same is based on the statements of so-called carriers. No one has seen them loading/unloading the gold, other than the entries in the respective passports. It is a pure ‘golden’ castle in the air built on statements again. Though the narration of the whole story is attractively designed, but the law requires that the preponderance of probabilities be in favour of this version, and of course seizure of the whole or any part of the same, to declare a person guilty. So far as the gold alleged to have been smuggled on the earlier occasions of 36 kgs, the Revenue has simply relied on the statements of alleged careers and nothing else. Other than this there is not even a single piece of evidence to corroborate that 36 kgs gold bars were smuggled on earlier occasions. It is a different matter if at least the alleged gold bars were available or at least its destination was known - when the so-called carriers are said to have smuggled the gold, including the person to whom the same was delivered upon their arrival in India, no effort has ever been made to track that recipient, nor is there any follow-up action to ascertain its veracity. Hence, we totally disbelieve this part of the story and do not endorse levy of penalty insofar as it relates to 36 Kgs, against the appellants. Reliability of statements recorded - HELD THAT:- A statement, if found vitiated by any means is clearly unreliable, in the absence any other corroborative piece of evidence, so also the magnanimous confession of a co-appellant inculpating other/s while gracefully exculpating himself, cannot have any evidentiary value, and hence, the benefit of doubt cannot be denied to the appellants. Quality of statements recorded by the revenue on which sole reliance is placed by the revenue - HELD THAT:- Though only a part of the alleged gold was confiscated, but nevertheless none of the appellants did claim ownership of any of the gold bars and in any case the same was not seized/confiscated from them. Hence, the requirement of Section 112 insofar as it relates to confiscation from the passengers alone is satisfied, but not any of the limbs (a) or (b) of the said section. The links in the chain that resulted in confiscation of goods are not at all there which has thus left the chain incomplete in all respects. Here in the case on hand, some of the officials are not even put on SCN, a few of the persons and some officials who were put on notice have been exonerated, crucial witnesses were not examined/questioned, nothing is forthcoming as to the fate of letter found and seized from Mr. Haris and hence, there are too many loose ends perhaps due to lack of proper investigation - there are no other sustainable evidence against any of the appellants and hence, the revenue has not made out any case against them. Consequently, penalty levied against them cannot be sustained. Appeal allowed - decided in favor of appellant.
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