TMI Blog2022 (3) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of Section 138C of the Customs Act. Further, the message is also vague and incomplete. Penalty u/s 112 of Customs Act - HELD THAT:- It is found that these appellants have not violated any of the provisions of the Customs Act including Section 111, and thus I hold that penalty under Section 112 of the Act is not attracted. Penalty cannot be imposed only on the basis of heresay evidence, or the incriminating statement of one of the co-accused in absence of other corroborative evidence, as has been held by Hon ble Supreme Court in the case of VINOD SOLANKI VERSUS UNION OF INDIA ANR. [ 2008 (12) TMI 31 - SUPREME COURT] - penalty imposed on all the three appellants are set aside. Admittedly it is a case of town seizure. Out of the 5 gold bars and 1 cut piece seized from Mr. Sanjay Soni, there is foreign marking rand refinery only on one gold bar. There is no such foreign marking admittedly on the other pieces recovered and seized. Thus, in absence of any evidence brought on record as to the allegation of smuggling, the provisions of Section 123 of the Act are not attracted in the case of other 4 pieces and the cut piece of the gold bar seized - Section 123 is at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d biscuits with him which are lying in his waist belt, and handbag. Mr. Soni was further asked if he was having any documents regarding the legal possession of gold to which he replied in negative. Thereafter, the officers detrained him and came with Mr. Soni to DRI office at Varanasi. In the personal search taken of Mr. Soni, the following was found: (i) his Aadhar Card-6577-1949-7383 (ii) Pan Card- BWOPS6563H (iii) Mobile Phone (LET Smart Phone-IMEI Number 862539030088425/ 862539030088433) with mobile SIM-7003805421/9007581279 (iv) a sum of ₹ 1240/- were recovered, (v) from cloth waist belt, two rectangular pieces of yellow metal were recovered which appeared to be of gold (vi) from purple colour handbag (3) yellow metal rectangular pieces plus one cut piece. Further, on being asked if he has any document as to the licit possession of the gold, Mr. Sanjay Soni stated that he is not having any document. Thereafter, the Officers called the Government approved valuer Mr. Girdhar Gopal, who submitted his report as on 11.05.2018, as follows- Sl. No. Description Weight (grams) (INR Value @ 32,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m travel expenses. He also admitted that he has carried gold in the past also at the instance of Mr. Ashok Soni and have delivered to Mr. Vishwanath Soni and Mr. Sandeep Gupta, Kanpur. He further stated that he knew that possessing and carrying gold in such manner was illegal, but he did it for money. 4. The officers of DRI on the belief and as per statement of Sanjay Soni that the gold has been smuggled to India through Bangladesh, through off routes in violation of the law, is liable for confiscation under Section 111 of the Customs Act. Thus Gold was seized under Section 110 of the Customs Act, under Panchnama and seizure memo dated 11.05.2018. 5. Mr. Sanjay Soni further stated that his main business was related to imitation jewellery but during the last three months, he has carried gold from Kolkata to Kanpur. They have also provided the Mobile Nos. of Mr. Sandeep Gupta(9935019600 8840793240 Mr. Vishwanath Soni at Kanpur (9839362909). He further stated that during the last three months Mr. Ashok Soni of Kolkata used to send gold through him for delivery at Kanpur, by giving directions on whatsapp. He has delivered gold to Kanpur 7-8 times in the past. The officers ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, the shop was found locked. Thereafter, summons were issued for appearance of Mr. Ashok Soni on 15.05.2018. In search of residence of Mr. Ashok Soni at Salkiya- Howrah on 14.05.2018 he could not be found there, neither any incriminatory document were found in this search attended by his son Mr. Yogesh Soni. Mr. Yogesh Soni in his statement inter alia stated that Sri Sanjay Soni is his maternal uncle he also knew Mr. Abhishek Soni as he is nephew of his father Mr. Ashok Soni. Both of them deal in jewellery. In response to summons, Mr. Yogesh soni replied stating that his father Ashok Soni has gone out of Kolkata and shall attend DRI office on return. 11. Further, the residence of Sanjay Soni was searched on 18.05.2018 at Sapuipara, Howrah, but nothing incriminating was recovered. Mr. Mahendra Bhama brother of Sanjay Soni who was present during search stated that he was aware regarding arrest of his brother Sanjay Soni by DRI-Varanasi. Further, Summons were issued by DRI for appearance of Mr. Ashok Soni Mr. Abhishek Soni, but the DRI received the usual reply that as they are out of Kolkata, they shall attend on their return. But both of them did not appear before the DRI. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that Mr. Abhishek Soni is his son-in-law. He is also known to Mr. Sandeep Gupta, Kanpur. He denied his involvement in the alleged gold smuggling. It appeared to Revenue that as he was in regular touch with Sanjay Soni/ Abhishek Soni and was also well known to Sandeep Gupta, on the basis of what sapp message received by Sanjay Soni from Mr. Ashok Soni, it appeared that Mr. Vishwanath Soni was involved in receiving smuggled gold. In the course of further enquiry from the telecom operator it appeared that Mr. Sanjay Soni and Mr. Sandeep Gupta were using mobile number in the name of other person. The DRI also retrieved the copy of train tickets for the past travels made by Mr. Sanjay Soni from Kolkata to Kanpur by train, from the Website IRCTC. It further appeared that Mr. Abhishek Soni Ashok Soni were the mastermind and Mr. Sandeep Gupta and Sri Vishwanath Soni also indulged themselves in the alleged smuggling/receipt of smuggled gold. Accordingly, SCN datd 5th July 2018 was issued on all the aforementioned five persons proposing confiscation of seized gold bars weighing 5194.200 gms valued at ₹ 1,66,21,440 under Section 111 (b) (d) of the Customs Act alongwith seizur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to divert the attention, and not to divulge the name of the actual recipient or owner of the gold in question. Further, the statement of Mr. Sanjay Soni is unsubstantiated, without any cogent evidence. Further, his evidence by way of statement is also not reliable, as he was not examined in the adjudication proceedings nor produced for cross-examination as required under Section 138B of the Customs Act. He further reiterated that he is not involved by any fig of imagination in the allegation of smuggling. 15.2 He further urged, It is evident from the show-cause notice that save and except the statement of Mr. Sanjay Sony, who is a co-accused, there is no other material or evidence in support of the allegations of Revenue. The statement of co-accused is not sufficient to implicate this noticee. It was also urged that the noticee is a poor artisan of old age, living in rented accommodation and having a monthly income of about 12,000 per month only. He has been a gold artisan/Goldsmith and presently due to his old age is unable to manufacture the gold ornaments himself. It was further urged that this appellant have not violated any of the provisions of Section 111 or any other pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to his salesman-Mr. Vicky Gupta. As his shop is located on the 1st floor where there is difficulty in receiving the mobile network signals save and except Jio, at times he uses phone of his employee. There is no case made out that this appellant had obtained the said mobile number in a clandestine manner. So far the message received by Mr. Sanjay Soni from Ashok Soni through WhatsApp 2 Sandeep , which have been explained by Mr. Sanjay Soni that 2kg was to be delivered to him (Mr. Sandeep Gupta of Kanpur). This noticee denied the allegation vehemently, that save except the statement of the Sanjay Soni, the same is not supported by any other cogent evidence. He further urged that Mr. Sanjay Soni has taken his name vaguely and he has got no manner of concern with the seized gold. That there is no evidence that this appellant had stuck any purchase deal for the gold with Mr. Ashok Soni or Abhishek Soni and/or have remitted purchase consideration for the same. 16.1. Under the facts and circumstances, no case of any alleged violation of any of the provisions under Section 111 or any other section of the Customs Act is made out against this noticee. Accordingly, the proposed penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onic evidence as prescribed under section 138C have not been followed. 17.1 It is an established principle of law that the statement of co-accused cannot be used against another co-accused without corroborative evidence. They denied all the allegations in the show cause notice. The whole case of Revenue is made on the basis of the statement of the co-noticee and uncorroborated evidences, which is not sufficient for the serious allegation of smuggling made against these appellants. The whole case of Revenue be made on the basis of presumption and assumption. In absence of evidence of these persons importing the gold by way of smuggling, or in any manner having handled the seized gold, no allegation is made out, nor any case of violation of the provisions of the Customs Act as alleged. There is no case of imposing penalty on these appellants, is made out. It is further urged that the show-cause notice issued by the Additional Director of DRI, is without jurisdiction, as have been held by Hon'ble Calcutta High Court in the case of Navneet Kumar vs. Union of India W.P. Nos, 3336(W) of 2018. Additional Director of Directorate of Revenue Intelligence is not entitled to invoke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants also urged that the amount of penalty imposed is also unconscionable and very high. 21. The learned Commissioner (Appeals) was pleased to observe that there is no sufficient ground for absolute confiscation of the gold. Thus, he gave option to redeem the confiscated gold, valued at rupees 1,66,21,440/- on payment of redemption fine of ₹ 35 lakhs. Further observed that the appellant shall be liable to pay the applicable duty and charges in respect of the seized goods. He, however upheld the imposition of penalty on all the noticees/appellants. 22. Being aggrieved Mr. Sandeep Gupta, Mr. Ashok Soni and Mr Abhishek Soni have filed Appeals before this Tribunal. Revenue is in Appeal against Mr. Sanjay Soni, to whom release of the seized gold have been allowed on payment of redemption fine, duty etc. 23. Mr. Debaditya Banerjee appearing for Mr. Ashok Soni and Abhishek Soni inter-alia urges that no allegation is made out against these appellants, nor substantiated by any cogent evidence. The imposition of penalty on these appellants, simply on the basis of the statement of co-accused Mr. Sanjay Soni is bad and fit to be set-aside. The WhatsApp message recovered fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another co-accused cannot be convicted or fastened with penalty etc. There has to be corroborative evidence in addition to the statement of a co-accused. 24. Accordingly he prays for allowing the appeals with consequential benefits. 25. Learned Counsel Mr. Ravindra Narayan Singh appears for Mr. Sandeep Gupta, inter-alia urges that there is no worthwhile evidence against this appellant in support of the allegations of Revenue. The penalty under Section 112 (b) have been imposed mechanically without application of mind and is fit to be set-aside. The only evidence against this appellant is the statement of co-accused Mr. Sanjay Soni, and the fax message retrieved from his phone. This appellant had appeared at the investigation stage and his statement was recorded under Section 108, wherein he had inter alia stated that he had met Mr. Ashok Soni in the marriage of the daughter of Mr. Vishwanath Soni with Mr. Abhishek Soni. Thereafter, being in the same line of trade they used to talk from time to time as regard the market position and the prevailing rates of gold. It is further urged that this appellant have not entered into any deal with the other co-accused for receiving smug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under Section 123 of the Customs Act, as to the seized gold being not of smuggled in nature. 27. He further relies on the ruling of Apex Court in the case of Om Prakash Bhatia vs. Commissioner of Customs 2003 155 DLT 423 S.C. where it has been held that if there is any prohibition on import or export of goods in respect of which the conditions, subject to which the goods are imported or exported, have to be complied with. If the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. It is further urged that the reliance placed by the learned Commissioner (Appeals) on the ruling of this Tribunal in Commissioner of Customs vs. Mazaharul Haq 2016 341 ELT 450 where it has been held, giving option to redeem the confiscated gold on payment of redemption fine and penalty. It is urged that the said ruling of this Tribunal have been accepted by the committee of Commissioners, only on monetory ground. Thus, the said ruling of this Tribunal cannot be relied upon for redemption of gold in the facts of the instant case. Accordingly, he prays for setting aside the order of the Commissioner (Appeals) on this issue and restori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay have arisen by way of smuggling into India through Bangladesh. Accordingly, modifying the order of Commissioner (Appeals), I uphold the absolute confiscation with respect to one piece of gold having the marking rand refinery weighing 998.600 gram valued at ₹ 31,95,520/-, as per the valuation report. 30. So far, the other four pieces of gold bars having no foreign marking weighing 998.700 grams (3 bars) and 1 bar weighing 998.600 grams and the cut piece weighing 200.900 gms, I hold that these are not liable to confiscation, as admittedly it is the case of town seizure. I further hold that the provisions of Section 123 of the Customs Act are not attracted. Accordingly, I set aside the order of confiscation with respect to these four gold bars and the cut piece and further order that the same is to be released to the person from whom they were recovered Mr. Sanjay Soni. The penalty imposed under Section 112(b) is reduced to ₹ 5,00,000/-(five lakhs). 31. Under the facts and circumstances, I find that Revenue has not been able to substantiate the charge of smuggling save and accept the statement under Section 108 recorded from Mr. Sanjay Soni. Such statement als ..... X X X X Extracts X X X X X X X X Extracts X X X X
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