TMI Blog2022 (4) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it was alleged that ten gold bars were recovered from each of the ladies, which the gold assayer certified to be of 1 kg each of 24 carat purity and the assessable value was arrived at INR 5,78,45,400/-, the market value of which was INR 6,38,03,476/-. 2. On reasonable belief, it was alleged that the said gold recovered was liable for confiscation under Section 111 of the Customs Act, 1962 and the same was seized under Section 110 ibid vide Mahazar drawn on 19.09.2013, along with the black coloured belt and the materials that were used for concealing/packing the above gold. The TV was also seized since the same was not declared, apart from other travel related documents. 3. Thereafter, the Revenue has recorded statements of various persons including the above three passengers who were apprehended on the eventful day of 19.09.2013. They include Mr. C.X. Francis, a havaldar attached to Customs House, Cochin, Mr. Sanjay Kumar Soni, Preventive Officer, Customs House Cochin, Mr. Joseph Jason, Mr. P.P. Sunil Kumar, Preventive Officer, Customs House, Cochin, Mr. T.Y. Alias, owner of Hotel Excellency. The statement of Mr. Umesh Raju, Operations Manager of Flora Airport Hotel wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 20 kgs of gold into India; that the above three passengers had failed 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. By this, the confiscated gold bars having the assessable value of ₹ 5,78,45,400/- appeared to be liable for confiscation under Section 111(d) ibid, read with paragraph 2.20 of the Foreign Trade Policy 2009-14 and Sections 3(2), 3(3) and 11(1) of the Foreign Trade (Development and Regulation) Act, 1992. 7. It is further stated that the 42 LG brand television, which was brought by Mr. Haris from Dubai, was also seized on the reasonable belief that the same appeared to be liable for confiscation under Sections 111(j) and (l) ibid. Apart from the above, the three passengers were alleged to be liable for penalty under Sections 112(a) and (b) ibid; and Section 114AA ibid. 8. There is also an allegation that the two lady passengers had earlier smuggled into India 36 gold bars weighing 1 kg each which was by way of concealment and non-declaration on different earlier dates nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bearing registration number KL 58B 5 should not be confiscated under Section 115(2) ibid. and penalty under Sections 112(a) and 112(b) ibid. should not be imposed. 15.1. Mr. T.K. Faiz, Mr. Ashraf K., Mr. Subair K., Mr. Abdulla K.K., Mr. Ahmed Suhail, Mr. T.K. Faizal, Mr. P.P. Sunil Kumar, Preventive Officer, Mr. C. Madhavan, Deputy Commissioner (Retd.) and Mr. Anil Kumar, Assistant Commissioner were also called upon to show cause as to why penalty under Sections 112(a) and (b) ibid. should not be imposed on them. 15.2. Mr. Sanjay Kumar Soni is the undisputed beneficiary of the Television set and one other officer namely, Dr. John Joseph, ADG, DRI is also named as the person who was known to Mr. T.K. Faiz, but however, they have not been put on any notice. 16. All the noticees have filed their written-replies seriously contesting the charge of smuggling of gold into India. They have also relied on the decisions of various judicial fora and also participated in the personal hearings offered to them on various dates. 17. The Adjudicating Authority namely, the Commissioner of Customs has, after considering objections and counters to the Show Cause Notice, held in the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king in the Cochin International Airport. Allegation against him is that he had made arrangements for unhindered exit of passengers carrying the smuggled gold on three occasions. But however, this appellant had rebutted on the ground that he was working as SDO in the airport and his job involved Public Relations work as well; that Mr. Faiz was introduced by Mr. C. Madhavan, Deputy Commissioner. Further, he had only helped in speedy immigration/Customs clearance and that he did not have powers to bypass the metal detector frame, hand X-Ray, profiling, exit X-Ray and other procedures in place. The Commissioner, however, has brushed aside the counter filed by Mr. Sunil Kumar to hold that he did not demonstrate the amount of diligence required from him by acceding to requests repeatedly and going to the extent of requesting Mr. Faiz to send a TV set for a colleague, which act of omission amounted to abetting smuggling of gold bars which were liable for confiscation and hence, he had rendered himself liable for penalty under Section 112(a) ibid. 20. Mr. M. Shanavas Appeal No. C/21610/2015 20.1. Allegations against him were that he had acquired possession of and sold the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them for a profit. This activity was held to amount to smuggling of gold which was liable for confiscation under Section 111 ibid. Therefore, this appellant was also held liable for penalty under Sections 112(a) and 112(b) ibid. 23. Mr. T.K. Faizal Appeal No. C/21661/2015 23.1 The case against him was that he had collected the gold that was smuggled by Mrs. Arifa and Mrs. Asifa on the earlier occasions, i.e., on 27.08.2013 and 12.09.2013. But it is a matter of record that no such gold is found or seized. The further allegation is that he had transported the above ladies to Hotel Excellency. Reliance was placed on the CD containing the CCTV footage which was submitted by the owner of the hotel namely Shri T.Y. Alias; his photograph was also identified by the hotel staff; but however, he didn t appear in response to summons, rather filed his counter to the Show Cause Notice inter alia urging that he is having his own business set-up in Chennai; that he was never there in Cochin on the eventful day, nor did he go to the airport on any date; that statements of alleged gold carriers contained inconsistencies and were vague; that there was no corroborating evidence, and that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable for penalty under Section 114AA ibid. 26.4 Hence, based on above it was concluded that Mrs. Arifa Haris was liable for penalty under Sections 112(a), 114A and 114AA ibid. 27. Mrs. Asifa Veeraoppoyil 27.1 Customs duty was not paid by her on the previous occasions (based only on her visits as per visa entry in her passport) on account of deliberate mis-declaration of contents of a baggage by this lady and hence, she is liable for penalty under Section 114A ibid. 27.2 Her action in attempting smuggling of gold renders her liable for penalty under Section 112(a) ibid. 27.3 Her action in deliberately mis-declaring the contents of a baggage on 27.08.2013, 12.09.2013 and 19.09.2013 renders her liable for penalty under section 114AA ibid. 27.4 Based on the above it was concluded that Mrs. Asifa Veeraoppoyil was liable for penalty under Sections 112(a), 114A and 114AA ibid. 28. Mr. Haris Abdul Rahman 28.1 He was involved as an accomplice in smuggling of gold bars on 27.08.2013, 12.09.2013 and 19.09.2013(based only on her visits as per visa entry in her passport); had also vide his action rendered the 42 LG television set, which was seized on 19.09.2013, l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the direct involvement of this noticee in the unhindered clearance of the passengers, except one statement of Mr. Faiz dated 22.09.2013 wherein Mr. Faiz was said to have been introduced by this noticee to Mr. Sunil Kumar. In the same breath, the Commissioner has observed that neither this person nor Mr. Sunil Kumar had the knowledge about the gold being smuggled. Interestingly, there is also a reference to the report sent by CBI about gifting a 42 LG television to this person and a cash of ₹ 4 Lakhs, which has been held to attract action under the provisions of Civil Service Conduct Rules and Prevention of Corruption Act, for which separate proceedings were already commenced by the CBI. On this excuse, the Commissioner has held that there was no evidence that was gathered during investigation against him and his involvement; that he was also held to be not the officer in charge when the alleged smuggling took place and that the act of introducing Mr. Faiz to Mr. Sunil Kumar could not be considered to be an act of omission or commission aimed at facilitating smuggling. Also, the investigation did not bring any evidence to this effect that the facilitation was done with the kn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lone they are unreliable being uncorroborated; that the copy of the photographs shown to some of the persons are so smudged and beyond recognition that the identity based on such photographs was impossible; that what was expected under law was an identification parade or at least they should have showed many photographs and asked the persons to identify, but they were shown just one photocopy of photographs, that too which were so unclear, which is not a sufficient piece of evidence. 35.2. They would also contend inter alia that the Adjudicating Authority has chosen a part of the statements recorded under Section 108 ibid. to justify the penalty, when the other part carried serious allegations against some of the persons including the officers of the Department, who were exonerated; and hence, the impugned order is susceptible to serious suspicion, the same suffers from being biased and that the Adjudicating Authority has adopted double standards in weighing a single piece of evidence to suit his convenience. They would also urge that Thangal Rahim, who himself admitted to be a hawala operator has also been let of even though he and his role was identified by two persons, while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been examined by the revenue. 36. Per contra, Mr. P. Gopa Kumar, Learned Additional Commissioner(AR) and Mr. P.R. Holla, Learned Superintendent(AR), argued for the Revenue. 37. Revenue s arguments: (i) Mr. Umesh Raju, Operations Manager vide his statement has identified that Mr. Suhail had stayed in his hotel on 20.08.2013; another person who was in the car tried to enter the room, to which he objected and that the visitor was identified after looking into the printout of the photograph shown by Revenue. (ii) Mrs. Asifa, one of the alleged carriers of gold, also identified the other person who was in the car with Mr. Suhail as Mr. Ashraf. She was taken to Hotel Flora; that room rent was given by Mr. Ashraf; that it was Mr. Ashraf who quarrelled with Mr. Umesh Raju on being objected to; that this lady was also shown the printout of photograh which identified as Mr. Ashraf. (iii) It is recorded from her that Mr. Ashraf indicated that he would go to her room to collect the gold, but since there was a quarrel, she handed over gold to Mr. Suhail who delivered the same to Mr. Ashraf. (iv) Mr. Faiz is said to have stated that smuggled gold was collected by his bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore us therefore, is the challenge to levy of above penalties. In the impugned order, at page No.149, 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. 39. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusive 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. 41.1 Regarding 36 Kgs of gold allegedly smuggled on the earlier occasions: 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. 41.2. So far as the gold alleged to have been smuggled on the earli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Mr. Rahim and his brother Mr. Nushad were recorded, as contended by the learned Counsel, but they were not put to notice, for reasons best known to department. 42.2. Mrs. Asifa : It is recorded in her first statement dated 19.09.2013 that her husband Mr. Abdulla was also engaged as a tour guide in a desert safari at Dubai; that during personal search upon arrival at Cochin International airport on 19.09.2013, 10 gold bars of one kg each were recovered; that those gold bars were placed in her and Mrs. Arifa s bag at Dubai airport by a person known to Mr. Abdulla; that her husband who was addressing that person as Ikka , whose name and other details were not known to her; that she had smuggled gold bars of 4 kgs, 8 kgs and 8 kgs each on earlier 3 occasions. On 20.08.2013, she is said to have stated that at that time she came with one Mr. Suhail whom she didn t know; both of them checked-in to a room in Hotel Flora and that she returned to Dubai the same day. It is further recorded that on 27.08.2013 and 12.09.2013, Haris and family came with her; that on both these dates, she carried 8 kgs. of gold bars and on both these occasions she stayed with the same family in a hotel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him whom Mrs. Asifa referred as her cousin s friend who had come to pick her up from airport and from hotel also, as per Suhail. 42.4. The stark contrast between statements of Mrs. Asifa and Mr. Suhail do not require a lens-eye: first of all, Mr. Suhail doesn t even know what Mrs. Asifa was up to, he does not even identify Mr. Ashraf, never says that they were picked up from airport by Mr. Asharf in a black car; that Mr. Ashraf paid for their room, etc. He has nowhere identified or even named Mr. Ashraf. Hence, whatever Asifa is said to have stated doesn t match with the say of Suhail despite the fact that both travel together and stayed together. Mr. Suhail has stated that the security of the hotel obstructed when the other person tried to enter their room, while Mrs. Asifa has stated that it was a staff who took objection and with whom Ashraf had arguments. Also, Mrs. Asifa has nowhere mentioned about her cousin coming to pick her up from the airport but his friend came instead. Further, Mr. Umesh Raju s revelations, as extracted at paragraph 22, page 11 of the impugned order refers to in and out columns of the register, which were alleged to be wrongly written by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2013, when the gold bars were seized. It is recorded that his further statement dated 30.09.2013 didn t yield anything to the Revenue. 43.2. This so-called carrier also didn t reveal anything about the involvement of any other person/s but specifically implicates Mr. Faiz as the person who had handed over the gold bars to be smuggled into India. Further, there is a mahazar drawn after search on him which exposed the letter of A.U. Jewellery, it was for the revenue to undertake further probe, to get into the bottom of the issue, to at least see if the purchaser was Haris or anyone else. The contrast is, Haris says Mr. Faiz handed over gold, but there is also a letter seized indicating that they purchased but nothing is brought on record as to what the truth is. 44.1. Mr. Faiz: Mr. Faiz has given 3 statements, all under Section 108 ibid. In his earlier two statements, Mr. Faiz has explained the modus operandi involving Mr. Abdulla and Mr. Thangal Raheem. He has also indicated his close association with all the officers involved. Revenue has not explained why Thangal Rahim a hawala operator, was let off the hook without even Show Cause Notice but Mr. Abdulla is implicated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that he had done the facilitation only for friendship and not for any consideration. 45.2. In the impugned order Commissioner has extracted Mr. Sunil Kumar s reply to the Show Cause Notice wherein said Sunil Kumar has categorically denied the allegations made against him. It is mentioned that he was posted as Air Customs officer at the Cochin Airport; that he was assigned with the duty of station duty officer; that he used to regularly receive request orders/instructions from superiors; that while he was posted in the airport, Mr. Madhavan, Deputy Commissioner, was in charge of the Customs formation at the Cochin International Airport; that the Deputy Commissioner had introduced him to Mr. Faiz as the one who would be travelling frequently to India for providing medical attention to his son; that he was instructed to extend facilities to him as and when he arrived in India; that later Mr. Anil Kumar, Assistant Commissioner also instructed him to introduce Mr. Faiz as Mr. Faiz was referred to Mr. Anil Kumar by Dr. John Joseph, ADG, DRI; that under a bona fide belief that his superior officers in rank would not mis-guide him and hence obeyed their instructions; that on the eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set walks free and there is no Show Cause Notice issued to him seeking his explanation; the person against whom CBI has filed a report for accepting cash is absolved for want of evidence and the person who accepts a costly gift of cash termed as loan from an alleged master mind is also freed. But the person who is said to have requested for a TV for someone and against whom there is not even an iota of evidence as having accepted either cash or anything in kind, is held liable. He is also condemned as having not exercised diligence while requesting for TV, etc. 45.4. Interestingly, in respect of the defense of Mr. Sunil Kumar namely that he was not the officer who was doing passenger profiling for which he was not authorised; that as far as the duties of the appellant who was working as PR, he had no instruction to do passenger profiling since there were ample officers posted in the airport and that there was no allegation that he even helped in bypassing X-ray screening, scanning or other verifications, we do not find any attempts being made to answer or even rebut, in the Order-in-Original. Moreover, Mr. Sanjay Kumar Soni was on duty on that day, who wanted the televisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he name of Smt. Shabna T.M by Suman s Bombay Jewellers (Kerala) were found and seized from his shop. With this background, he was suddenly asked about seizure of 20 kg gold on 19.09.2013, to which it is recorded that he had made several dealings in 1 kg gold bars with Mr. Ashraf and that he didn t have any documents or accounts in respect of the 1402.200 grams seized. This prompted the Revenue to reasonably believe that they were smuggled gold and the sale proceeds of smuggled gold and hence liable for confiscation. It is recorded in his statement that the above gold was sent to him by his regular supplier Mahindra @ Mama, a wholesale dealer; that he knew Mr. Ashraf of Thalasserry who was introduced by his relative Mr. P.C. Majeed of Koduvally; that Mr. Ashraf enquired with him if he could sell imported gold bars and hand over amount so collected to his brother Mr. Subair; that he identified the photograph of Mr. Ashraf which was shown to him; that during August September, Mr. Ashraf had entrusted him with 3 gold bars each, on three or four occasions gold bars cut by Mr. Ashraf were given to him by Mr. Subair, the sale proceeds of which were handed over to Mr. Subair; that ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... become week, but also weekend the revenue s case against some of the other appellant, like Ashraff and Subair, since revenue had alleged that the gold bars smuggled on the earlier dates were sold to Mr. Shanavas. By this it is clear to us that Mr. Shanavas did not acquire or deal with in manner, for disposal, etc. of any goods that was liable for confiscation. Hence, it is held that the penalty imposed on this appellant is without any basis and the same cannot sustain. The impugned order to this extent, therefore, is set aside and the appeal is allowed. 46.4. Mr. Ashraf and Mr. Subair stand on the other side of the same coin, since the allegation against Mr. Shanavas was that these two appellants were supplying the smuggled gold to Mr. Shanavas. But when the alleged recipient is held nothing to do with the alleged smuggling activity, then the revenue s case insofar as the alleged supplier/s cannot also stand since the same logic holds good. 47.1. Mr. Subair Kallungal: This appellant is visited with penalty for his alleged involvement on the earlier occasions of 36 KGs of gold bars. Only one person namely Mr. Shanavas has named this person but without attributing any spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vying penalty on Mr. Subair Kallungal cannot sustain since the same is without any basis, The penalty and the impugned order are therefore set aside. The appeal to this extent is allowed. 47.3. Mere statement against this appellant, alleged to be that of Mr. M. Shanavas is not sufficient to sustain for penalty on this appellant. 48.1 . Mr. Ashraf Kallungal: The role of this appellant has come only in the third statement of Mr. Faiz and that of the Hawala Operator namely Mr. Thangal Rahim. At page 102 of the impugned order, the Adjudicating Authority has gone on to verify the objections of Mr. Faiz with that of the allegations levelled against him in the Show Cause Notice. The Commissioner has placed reliance on the third statement of Mr. Faiz recorded on 11.10.2013 alone, to confirm the involvement of Mr. Ashraf for which there is no reason given and no other supporting evidence whatsoever is placed on record. While concluding, the Commissioner observes that Mr. Faiz had maintained a close acquaintance with Customs officers working in the airport; that in his statement dated 11.10.2013, he had admitted the role of Mr. Ashraf as the person who gave him the gold to be sent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raf and exonerating Rahim and this has been believed as gospel truth by the Revenue, the reasons for which are not spelt out for convenience, nor do we see any corroborative evidence as well, like the passport/visa stamping, call records, etc. and nor does the story of exculpating Rahim appears voluntary or justifiable since other than exculpating Mr. Rahim, no other fact or statement seems to be retracted by him on 11.10.2013. 48.5. Let us examine from another angle now. In his reply dated 18.03.2014 to the SCN dated 13.03.2014, he has inter alia contended that none of his statements was voluntary; that he had not given any gifts to any of the officers involved; that he had denied his role in the alleged smuggling activity; that Latheef s driver Rafeeq was never questioned by the revenue; that his call to Latheef on 23.9.2013 was never made since he was detained on 22.9.2013 itself; that he had no business relation with Ashraf; that he never aided, abetted, or colluded with him in the alleged smuggling activity; that Raheem was wrong in saying that the gold belonged to him and Ashraf; that story of Asifa as having been taken in a black car to hotel Flora driven by Ashraf wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a introduced this person to him may not be correct because, Mr. Rahim has pleaded that he didn t even know Mr. Abdulla. 48.8. In his second statement recorded on 23.10.2013, (Thangal Rahim is said to have met this appellant at Hotel Citadel) he is said to have deposed that it was Mr. Ashraf and Mr. Faiz who had planned, funded and operated the smuggling of gold through Nedumbassery airport on 19.09.2013 and on previous occasions also, which he understood when he met Mr. Ashraf in Bangalore on 20.09.2013; that Mr. Ashraf proceeded to Hotel Taj Gateway to meet Mr. Faiz to discuss about seizure of 20 kg gold and that he had met Mr. Faiz at Taj hotel on 21.09.2013 evening. It is surprising that Rahim had to wait till 21.10.2013, to voluntarily appear, to give his statement. Moreover, revenue has not brought any credit-worthiness of this person on record, to just to believe in whatever he says. Is he an eye-witness, is he an expert in any field, to take his say as gospel truth? The appellants certainly deserved a chance to cross-examine at least this person, to bring the truth on record, which has been denied by the authorities which surprises us. 48.9. Mr. Faiz in his statements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T.K. Faizal: From the allegations levelled against this person in the Show Cause Notice, we find that he is alleged to have transported the alleged gold carriers to the Hotel on 27.08.2013 and 12.09.2013, but the alleged gold smuggled on those dates was never found, to be confiscated under Section 111 ibid. Nobody has witnessed the loading or unloading of gold in the remotest form into the car used for transporting the alleged gold carriers by this person. The preponderance of probability is heavily against the Revenue insofar as the allegation of smuggling activity on the earlier occasions is concerned since it is also not placed on record if this appellant transported the alleged gold carriers in a taxi as a driver or used a personal car. The only statement against this appellant is again that of Mr. Faiz, who has admittedly retracted his own statements, which drives us to ponder as to which of his statements is to be believed. This appellant, therefore, cannot be penalized when his role is not clearly established by the Revenue as the benefit of doubt should go in his favour with regard to the reliance placed on the statement/s. 49.2. We have the guidance of a recent ruling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same relates to these appellants, and consequently, the respective appeals allowed. 50.1. Mr. T.K. Faiz: In the impugned order, it is averred that this person played a major role in the smuggling of gold bars and hence, an alert was issued to the immigration authorities; that he was intercepted at Indira Gandhi International airport on 22.09.2013 while he was about to deport to Dubai by Emirates flight. His first statement as per paragraph 24 pages 12-13, was recorded on the same date wherein he has given his brief activities, background, etc., and the important excerpts as recorded there are that he was using the black BMW car (Registration No. KL-58-B-5) (should have been ignored as the revenue has held that this statement is retracted) which belonged to his employer at Dubai (Mr. Abdul Latheef); that he used to visit Kerala frequently as caretaker of the property of his boss (Mr. Abdul Latheef) (which was denied by Mr. Latheef); that on 20th September he came to Calicut and then went to his house at Palloor, from where he went to Bangalore and from there to Delhi, from where he was apprehended. When he was asked about three passengers caught smuggling gold at Cochin airpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this person as the one who handed over the gold bars to be smuggled into India, some of which (20 kgs) were ultimately confiscated. The only other corroboration available on record are the statements of the very officers of Customs who have allegedly accepted cash or kind offered by this appellant for facilitating smooth Customs clearance at the Cochin Airport. The fact that he handed over the gold bars at the Dubai Airport stands uncorroborated by two of the 3 passengers, with one of them even refusing to support the revenue. But he is neither treated as an importer nor as a purchaser. Moreover, his request for cross examination of the persons deposing against him has also been denied by the revenue, and hence we are of the opinion that the penalty though appears justified, but since we have already held at para 38 above that penalty both under Sections 112(a) and (b) cannot be sustained, we order the same to be set aside. Apex court further concluded, inter alia, that there were a large number of discrepancies in the treatment and disposal of physical evidence; that there were contradictions in the statements of official witnesses; that although if individually examined, may n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Navjot Sandhu Alias Afsan Guru [(2005) 11 SCC 600], this Court has laid down the law in the following terms: .. 39. The crucial expression used in Section 30 is the Court may take into consideration such confession (emphasis supplied). These words imply that the confession of a co-accused cannot be elevated to the status of substantive evidence which can form the basis of conviction of the co- accused. The import of this expression was succinctly explained by the Privy Council in Bhuboni Sahu v. R in the following words: (AIR p. 260) [T]he court may take the confession into consideration and thereby, no doubt, makes its evidence on which the court may act; but the section does not say that the confession is to amount to proof. Clearly there must be other evidence. The confession is only one element in the consideration of all the facts proved in the case; it can be put into the scale and weighed with the other evidence ... 35. In Mohtesham Mohd. Ismail v. Spl. Director, Enforcement Directorate and Another [(2007) 8 SCC 254], in a case involving the Foreign Exchange Regulation Act, this Court held: 19. Apart therefrom the High Court was bound to take i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCC 484 PART I), (3). M. Siddiq v. Suresh Das ((2020) 1 SCC 1 PART I. DECIDED ON 09.11.2019), a Constitution Bench of this Court has described thestandard of preponderance of probabilities in the following terms: 720. The court in a civil trial applies a standard of proof governed by a preponderance of probabilities. This standard is also described sometimes as a balance of probability or the preponderance of the evidence. Phipson on Evidence formulates the standard succinctly: If therefore, the evidence is such that the court can say we think it more probable than not , the burden is discharged, but if the probabilities are equal, it is not. [Phipson on Evidence.] In Miller v. Ministerof Pensions [Miller v. Minister of Pensions, (1947) 2 All ER 372], Lord Denning, J. (as the Master of Rolls then was) defined the doctrine of the balance or preponderance of probabilities in the following terms: (All ER p. 373 H) (1) It need not reach certainty, but it must carry a high degree of probability. Proof beyond reasonable doubt does not mean proof beyond the shadow of doubt. The law would fail to protect the community if it admitted fanciful possibilities to deflect the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 is also no cogent and corroborative evidence insofar as Rahim s statements are concerned since he has only inculpated others while clearly exculpated himself, which has thus clearly failed the test laid down by the Apex court supra and hence, his statement is to be ignored altogether for lack of credibility. Other than this, we do not see any other sustainable evidence against any of the appellants and hence, we have to hold that the revenue has not made out any case against them. Consequently, penalty levied against them cannot be sustained. 58. In the result, i. Appeal No.C/21533/2015 filed by Shri P.P. Sunilkumar is allowed. ii. Appeal No.C/21610/2015 filed by Shri Shanavas M. is allowed. iii. Appeal No.C/21635/2015 filed by Shri Subair Kallungal is allowed. iv. Appeal No.C/21636/2015 filed by Shri Ashruf Kallungal is allowed. v. Appeal No.C/21661/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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