TMI Blog2021 (12) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn 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. - Customs Appeal No. 70261 of 2020 and Customs Appeal No. 70272 of 2020 - FINAL ORDER No. 70263-70264 / 2021 - Dated:- 3-12-2021 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) Ms. Pragya Pandey and Sh. Anurag Mishra, Advocates for the appellant Sh. Girish Agarwal and Ms. Somya Chaturvedi for Sh. Mahendra Kumar Bajpai. Shri B. K. Jain, Authorised Representative for the respondent ORDER The appellants herein are in appeal against order-in-appeal passed by the Commissioner (Appeals), by which the absolute confiscation of seized 13 pieces of gold bars weighing 12,993.30 gms. valued at ₹ 3,98,89,431/- have been confirmed, and further penalty imposed ₹ 25,00,000/- under Section 112(b) of the Act on Shri Mahendra Kumar Bajpai and penalty of ₹ 12,00,000/- under Section 112(b) of the Act on Shri Girish Agrawal have been confirmed. 2. The brief facts of the case are that the appellant Shri Mahendra Kumar Bajpai was travelling from Kolkata to Kanpur by train. He was intercepted by the officers of Government Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son of late Harishankar Agrawal, resident of 24/7 Birhana Road, Kanpur Nagar, who is the Proprietor of Kala Jagat Jewellers, Naughada, Naya Ganj, Kanpur. Further, he stated that he was working for Shri Girish Agrawal. He also stated that in the past also he has carried gold from Kolkata to Kanpur for Shri Girish Agrawal. On each journey, he had carried ₹ 10 lakh, as given by Shri Girish Agrawal, which was delivered to the person at Kolkata and received the delivery of gold. 4. He further stated that his earlier journey to Kolkata was in 3rd week of December, 2017 alongwith Shri Girish Agrawal. Shri Girish Agrawal received six pieces of gold bars of foreign origin and delivered ₹ 10 lakhs to the person who delivered, and they carried the gold bag to Kanpur. 5. On earlier occasion he gone to Kolkata in the first week of January, 2018 alone, and reached at the designated place near Jagannath ji Temple situated at Sonapatti, he contacted Shri Agrawal. 6. After waiting for some time a person met him who had also met him earlier and delivered him 8 pcs. gold bars of foreign origin and he gave ₹ 10 lakhs, as given by Sh. Agawal to the person who had given him t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the alleged seller, Shri Bajpai stated that he was not aware how the remaining amount was delivered to the person at Kolkata. Shri Bajpai also failed to give the name and address etc. of the person who delivered gold bars at Kolkata. He also stated that he has not been provided any bill/challan for the gold. It appeared to Revenue that by carrying the foreign origin smuggled gold bars in such a huge quantity of about 13 kg. by Shri Bajpai committed offence punishable under Section 135 of the Customs Act and accordingly he was arrested on 31.01.2018 with prior permission of the Competent Authority and thereafter produced before the Special CJM (Economic Offences) Varanasi, who remanded him to judicial custody. 11. By way of follow up investigation, the Customs Officers conducted search at the residential premises of Shri Girish Agrawal on 31.01.2018 at 24/7, Birhana Road, Kanpur. However, nothing incriminating was found during the search. Smt. Mohini Agrawal w/o Shri Girish Agrawal who was present at the time of search stated that Shri Agrawal was on tour to Jhansi for some work. Further stated that he was in the business of stock broking and also having shop in the name of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antity. It further appeared that he is required under Section 123 of the Customs Act wherein the case of seizure of gold on the reasonable belief that these are smuggled goods, the burden of proving that these are not smuggled goods, is on the person from whose possession the goods were seized; and if any person, other than the person from whose possession the goods were seized, claims to be owner thereof, also on such other person. It further appeared that both Shri Bajpai and Shri Agrawal have failed in discharging their onus to satisfy the licit possession of gold. Accordingly, show cause notice dated 16.07.2018 was issued jointly on Shri Girish Agrawal and Shri Mahendra Kumar Bajpai, proposing to confiscate seize foreign origin 13 pcs. of gold bars weighing 12993.30 grms. Valued at ₹ 3,98,89,431/- under Section 111(b) and (d) of the Customs Act. Further, proposing seizure of the two bags used for carrying under Section 119 of the Act. Further, penalty was proposed on Shri Girish Agrawal and Shri Mahendra Kumar Bajpai under Section 112(b) of the Act. 16. In response to show cause notice, Shri Girish Agrawal filed his reply inter-alia stating that it is a case of town se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of foreign origir brand gold with the help to Shri Mahendra Kumar Bajapi. It is also wrongly alleged that Shri Mahendra Kumar Bajapai is an employee of my firm. My firm M/s Kala Jagat Jewelers is a limited liability firm we are strictly following the provisions of companies Act as well as other laws. As a matter of fact Shri Mahendra Kumar Bajpai is an acquaintance to me but he has nothing to do with my business activity at all. According to the statement of Shri Mahendra Kumar Bajpai dated 30.01.2018 it was me who has booked his ticket in AC-II Tier 1 Kalka Mail from Kanpur to Calcutta whereas there is no evidence brought on the record establishing the fact that tickets were booked by me or Shri Mahendra Kumar Bajpai has travelled in Kalka Mail in AC-II Tier, similarly no evidence has been brought on the record that it was me who has booked seat No. A 1-43 for Shri Mahendra kumar Bajpai in Howrah Jodhpur Train. The department has not brought any evidence on record to prove that Shri Mahendra Kumar Bajpai has travelled on the same train as he has stated in his statement dated 30.01.2018. 2. In the statement it is stated by Shri Manendra Kumar Bajpai that earlier on 3 occasio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd therefore mere having the foreign mark on some of the gold bar does not establish that the said gold bars were smuggled into India. Further reliance is placed on the following case laws:- 2000 (126) E.L.T. 180 (Bom) State of Maharashtra Vs. Prithviraj Pokhraj Jain Smuggling- Evidence-Foreign markings- Mere markings cannot be taken as evidence. as proof of fact of foreign origin of goods as such markings and labels only hearsay evidence . 6. Shri Mahendra Kumar Bajpai in his statement has admitted that he is one of my employees, whereas there is no evidence to establish this statement as well. My residential premises as well as my business premises - M/s Kala Jagat Jewellers were visited by the officers of Customs Authority and no evidence what so ever have been found to establish the Shri Mahendra Kumar Bajpai was working as one of my employee. The entire proposition that he is working as my employee is far from truth and appears to be an incorrect statement. 7. As per Fard when Shri Mahendra Kumar Bajpai was caught by the GRP officers apart from the recovered Gold bars, the officers also recovered one Mobile Hand set of OPPO company in working condition. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Khemani Purshottam Mohandas Vs. CC, CSI Airport, Mumbai Penalty-Smuggling-Abetement-Evidence-Frequent mobile calls Between appellants and accused passenger, illegally carrying gold bars. Department not able to produce conversation Details- In absence of corroborative evidence, charge of Abetement/conspiracy to smuggle gold cannot be sustained on basis of suspicion, however, grave and plausible in Manner- Penalty not imposable-Section 112 of customs Act, 1962. 11. The entire case of the department against me is based on the statement of Shri Mahendra Kumar Bajpai who is also a co-accused. It is well settled principle of law that the statement of co-accused cannot be relied upon especially in a case where charges of smuggling of goods are made. The penalty under Section 112 of the Custom Act, 1962 has been proposed against me that I, did not appear before the Custom Authorities even after the Summons under Section 108 of the Customs Act, 1962. Non appearance or right of silence does not establish that appellant indulged in smuggling or somehow connected with co-accused. Even otherwise it is only the presumption of the department that I have avoided the summons due to my in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the appellants and the explanation of Shri Agrawal was not rejected and accordingly seized gold was absolutely confiscated under Section 111(b) and (d) of the Act, alongwith confiscation of the two bags. Further, penalty was imposed under Section 112(b) of ₹ 25 lakh on Shri Mahendra Kumar Bajpai and ₹ 12 lakhs on Shri Girish Agrawal. 18. Being aggrieved, both the appellants had filed appeals before the Commissioner (Appeals) who vide the impugned order-in appeal, observed that none of the appellant have claimed the ownership of the gold, which was recovered from Shri Bajpai. Further, relying on the findings in the order-in-original, the appeals were dismissed. Being aggrieved, the appellants are in appeal before this Tribunal. Both the Counsels for the appellants and ld. Authorised Representative for Revenue have been heard. Ld. Counsel for Shri Girish Agrawal urges as follows:- 18.1 The Adjudicating Authority as well as Commissioner (Appeals) has wrongly concluded that Shri Mahendra Kumar Bajpai is a close associate of this appellant and helped the appellant in smuggling of gold on past 3 occasions also. The Adjudicating Authority as well as Commissioner (Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Mahendra Kumar Bajpai as stated by him in his own statement are different than the phone numbers CDRs of which have been relied and annexed by the Department. 18.5 Shri Mahendra Kumar Bajpai in his statement has stated that he is one of my employees, whereas there is no evidence to establish this fact as well. My residential premises as well as my business premises - M/s. Kala Jagat Jewelers were visited by the Custom officers and no evidence whatsoever was resumed to establish either the fact that Shri Mahendra Kumar Bajpai was working as one of my employee, or is Appellant was involved in any kind of smuggling. The entire proposition is that he is working as an employee is far from truth and appears to be a false statement. The learned Commissioner (Appeals) has erred in relying upon the said statement and imposed a heavy penalty against the appellant, only on the basis of the said statement. 18.6 As per Fard when Shri Mahendra Kumar Bajpai was caught by the GRP officers apart from the recovery of Gold Bars, the officers also recovered one mobile Hand set of OPPO company in working condition. According to the Supurdanama also only one OPPO set was handed over by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.9 The entire case of the department is based on the fact that the aforesaid Gold Bars were being brought by Shri Mahendra Kumar Bajpai, by way of smuggling from Calcutta. Shri Mahendra Kumar Bajpai in his statement categorically stated that someone in Calcutta has handed over the Gold Bars to him. Whereas, the department has failed to investigate as to who has handed over the Gold Bars to Shri Mahendra Kumar Bajpai in Calcutta. As a matter of fact no investigation has been made by the department regarding the purchase of said Gold Bars from Calcutta. The present case is based on un-reliable and inadmissible evidence, and therefore, on the basis of the said in complete enquiry charges of smuggling of Gold is not proved and hence penalty under Section 112(b) of the Customs Act cannot be imposed against the appellant. Mere foreign marking on the goods, which are freely tradable in India, cannot become a ground for allegation ofsmuggling as held by the Hon ble HC of Bombay, in case of State of Maharastra Vs. Pritviraj Pokhraj Jain reported at 2000 (126) E.L.T 180 (Bom.). 18.10 The appellant is not at all involved in the smuggling in gold, and therefore, penalty against the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 108 of the Act, as the said statement is not voluntary and rather under coercion and duress while the appellant was detained and arrested by the Customs Department. Further, there is no enquiry made as to the source of the gold though it was statement of Shri Bajpai - he was carrying the gold from Kolkata to Kanpur. It is further urged that no penalty is attracted under Section 112(b) of the Act. Further, reliance is placed on the following ruling:- Khemani Purshottam Mohandas vs. CC, CSI Airport-Mumbai 2017 (354) ELT 275 (Mum.) Ram Prasad vs. Commissioner of Customs, Amritsar 2003 (159) ELT 594 (Tri. Del.) It is further urged that the sale and purchase of gold is permitted within the territory of India. It is further stated that the Department has wrongly alleged that the gold is of foreign origin. It is further urged that inspite of inspection and recovery of gold by GRP at Mughalsarai Railway Station, there is no independent witness brought on record by the GRP as to the fact of seizure from the appellant. Further, as per the recovery note (Fard) prepared by GRP, they found gold as per the seizure list of the Customs, with one mobile phone of Oppo ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 22. Accordingly, I hold as follows: (i) The absolute confiscation of 11 gold bars (excluding the two with MMTC markings), is upheld under Section 111(b) of the Act. (ii) Penalty under Section 112(b) on Mr. Girish Agarwal (Appellant in (Appeal No. 70272 of 2020) is set aside, with consequential benefits. (iii) The penalty under Section 112(b) on Mr. M.K. Bajpai is reduced to ₹ 2,50,000/- (Rupees two lakhs fifty thousand), as he is only a carrier, and a person of small means. (iv) The 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 dispose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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