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2023 (4) TMI 833 - AT - CustomsLevy of penalty u/s 112(b)(ii) of the Customs Act, 1962 - alleged smuggling of miscellaneous contraband goods - existence of mens rea or not - reasons to believe - no follow up action was conducted nor any statement of Shri Ajay Sarawagi was recorded - No summons issued u/s 108 of the Customs Act, 1962 - non-issuance of Show Cause Notice or any personal hearing notice - principles of natural justice - HELD THAT:- The role of the Appellant in the whole episode has been derived only from the statement of Shri Amarjit Sahu and two past penalties imposed on the Appellant. Proceeding on the basis of statement of co-accused is not sufficient to hold the Appellant guilty of smuggling in absence of any search and recovery from his place. The alleged statement of the co-accused cannot be relied upon to implicate a person on charges of smuggling. Therefore, it was incumbent on the Investigating Officer, to have searched and recorded statement of the Appellant and to further prosecute him in the matter on the basis of its finding. As the department has neither shown any evidence nor explained satisfactorily as to why they have not conducted follow up action with the Appellant at the investigation stage, not even a Summon U/s 108 of the said Act was issued. Therefore, the proceedings against Shri Ajay Sarawagi on the basis of the statements of the co-accused is not sufficient to hold him guilty of smuggling, especially when no search and recovery has been done at his place. It is a settled law that no person shall be implicated in a crime merely on the basis of an allegation leveled by a co-accused, without any corroborative evidence. Section 112(b) of the Customs Act, 1962 is not applicable to the facts of the present case because records show that the Appellant had never acquired possession or in any way was connected with the activities mentioned in the Section or in any manner dealing with any goods which the Appellant knew or had reason to believe are liable to confiscation. It is now well established that mens rea is an important ingredient for imposing penalty on the persons enumerated in Section 112(b) of the Customs Act, 1962. The evidence brought out by the department nowhere suggests that the Appellant was aware that the goods in question were smuggled into the country. The penalty imposed on the Appellant, therefore, cannot be sustained. Past offence can be at best enhancer of civil and/or criminal liabilities, but no penalty can be imposed on any concurrent alleged offence. It is well settled law that no penalty under section 112(b)(ii) of the Customs Act, 1962, can be imposed without proving the nexus with the goods under seizure which are liable for confiscation. The Appellant is not liable for imposition of penalty under Section 112(b) of the Customs Act, 1962 - the penalty of Rs. 50,00,000/- imposed under Section 112(b) (ii) of the Customs Act, 1962 is set aside - appeal allowed.
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