TMI Blog2022 (8) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... uggling of gold - It is well settled law that the statements of the co-noticee cannot be adopted as a legal evidence to penalize the accused unless the same are corroborated in material particulars by independent evidence. The statement of co-accused cannot be relied upon, particularly when appellant has denied his involvement in respect of the goods in question. There is absolutely no evidence on record connecting the appellant with the commission of any offence in relation to the alleged gold smuggling activity. Merely because the Appellant is engaged in the business of Gold and Silver, that would not ipso facto make the appellant in any way privy to the commission of any offence with reference to the alleged gold smuggling activity - there is absolutely no evidence on record connecting the appellant with the commission of any offence in relation to the alleged gold smuggling activity. Merely because the Appellant is engaged in the business of Gold and Silver, that would not ipso facto make the appellant in any way privy to the commission of any offence with reference to the alleged gold smuggling activity. The appellant cannot come within the ambit of Section 112(b) becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Rutugna Trivedi outside the Airport terminal. The officers further carried out the investigation and the evidences in the form of statements of persons involved in smuggling of gold, documents recovered after searches carried out at various locations, documents recovered and retrieved from the Mobile phones of various persons involved in smuggling of gold, data storage devices recovered from the residence of Ms. Nita C Parmar and also the email recovered from account of Shri Jignesh Savaliya and Shri JitendraRokad reveal that a Gold smuggling racket was orchestrated and operated by Shri Rutunga Trivedi, his wife Smt. Hina Rutunga Trivedi and their employee and key associate Ms. Nita C Parmar. This smuggling activity was aided by Shri Jignesh Savaliya, Asst. Duty Officer of M/s Global Ground India Pvt. Ltd., ground handling agency working at Sardar Vallabhbhai Patel International Airport, Ahmedabad, in as much as he received the gold from these carriers and brought them outside the airport by exiting from the cargo gates. It further emerges from the evidences that this smuggling racket was actively financed by Shri Jitendra Rokad, Mehul Bhimani, Raju Goswami, Vipul Joshi and L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng aggrieved, the appellant preferred appeal before this Tribunal. 3. The Learned Consultant Shri Vikas Mehta appearing on behalf of Appellant submits that impugned order has travelled beyond the scope of show cause notice as there is no allegation against the appellant that he had dispatched any gold-smuggled or otherwise through any angadia firm. Hence, imposition of penalty upon Appellant on this ground alone is not tenable in the eyes of law. In the show cause notice neither name nor role related to gold smuggling activity is explained and hence it is established that appellant is nowhere connected with the offence covered by the impugned notice. 3.1 He submits that Ld. Adjudicating authority, while holding that the Appellant was used to buy gold from M/s. Akhandjyot LLP has nowhere held that such gold was unaccounted or smuggled. There is also no such allegation in the show cause notice. Hence, in the absence of any allegation that M/s Jyot Jewellers, proprietorship firm of Appellant had purchased smuggled/unaccounted gold from M/s Akhandjyot Jewels LLP, partnership firm of Shri Rutugna Trivedi, therefore the imposition of penalty on Appellant under Section 112(b)(i) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared value and the value thereof or five thousand rupees, whichever is the greater; (iv) in the case of goods falling both under clauses (i) and (iii), to a penalty not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest; (v) in the case of goods falling both under clauses (ii) and (iii), to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest. From the perusal of above provision, it will be seen that for imposition of penalty on a person under Section 112(b), the following conditions must be satisfied. (i) The person must have acquired possession of or must be in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which are liable for confiscation under Section 111 of Customs Act, 1962. (ii) The person must have knowledge or have reason to believe that the goods acquired by him or dealt with by him in the manner as mentioned above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment Shri Rutugna being the mastermind of the smuggling racket, however during the investigation Shri Rutugna has nowhere stated the name of Appellant as connected to his alleged activity of smuggling of gold. He nowhere stated that Appellant has involved in purchase and sales of smuggled gold. We have also gone through the statements of other persons who allegedly involved in smuggling gold activity. Upon perusal of these statements we nowhere found that the Appellant had knowledge about the said alleged smuggling of gold activity. The department except the statement of Ms.Divya Kishore Bhundia nowhere produce any evidences to show that Appellant was involved in smuggling gold activity. We also reproduced the relevant paras of the Appellant s statement dated 13.08.2019 as under: - On being asked I state that I know Mr.Rutugna Trivedi, since over four to five years, from the time M/s. Akhandjyot Jewels LLP was established. M/s Jyoti Jewellers used to sell Silver and gold to M/s. Akhandjyot Jewels LLP and at times used to buy gold or sliver as per market convenience. During this period I used to talk with Ms. Nita Parmar and Ms.Jagruti Patel. Ms Jagruti Patel used to guide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this, the Department has not taken any steps to confirm with Shri Rutugna whether the Appellant also involved with him. The evidence on record is not sufficient to hold that the appellant was involved in alleged activity of smuggling of gold. In the impugned matter we also find that Ld. Commissioner only on the basis of statement of Ms.Divya Kishore Bhundia who is also co-noticee in the present case concluded that Appellant has dealt with smuggled Gold. It is well settled law that the statements of the co-noticee cannot be adopted as a legal evidence to penalize the accused unless the same are corroborated in material particulars by independent evidence. The statement of co-accused cannot be relied upon, particularly when appellant has denied his involvement in respect of the goods in question. In this connection, the following judgments are relevant and they fortify the views expreseed by us : Punam Chand Bhotrav. Collector of Customs - 1993 (63) E.L.T. 237. Jai NarainVerma v. Collector of Customs, New Delhi - 1995 (76) E.L.T. 421. Jaswinder Singh v. Collector of Customs, New Delhi - 1996 (83) E.L.T. 175. Mahabir Prasad v. Commissioner of Cus. (Prev.), I.N. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant had knowledge about smuggling of gold into India. From the above-reproduced section it can be seen that penalties can be imposed only if the individuals were in knowledge of the act of smuggling. Further, for imposition of penalty under Section 112(b) of the Customs Act, 1962 the knowledge on the part of the person has to be established. In the present matter department failed to do so. During the investigation officers did not find any documents/ piece of paper or any other evidence against the Appellant to show that the Appellant had dealt with the smuggled gold. Facts borne on record reveal that the appellant has maintained all along that he never had the possession of the impugned goods nor was in any way concerned with the carrying, removing, etc., of the consignments in question and hence, it was beyond his comprehension that the goods in question were per se liable for confiscation under Section 111(d) ibid. It is nowhere on record that the appellant, in his capacity, was knowingly involved in alleged activity of smuggling gold. Section embodies the phrase ...which he knows or has reason to believe are liable to confiscation under Section 111... which is of specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26 of the Central Excise Rules, 2002 Rule 26 came to enacted which came in force with effect from 1st March, 2007. Rule 26 reads as under : Rule 26. Penalty for certain offences. - (1) Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding the duty on such goods or two thousand rupees, whichever is greater. (2) Any person, who issues - (i) an excise duty invoice without delivery of the goods specified therein or abets in making such invoice; or (ii) any other document or abets in making such document, on the basis of which the user of said invoice or document is likely to take or has taken any ineligible benefit under the Act or the rules made thereunder like claiming of Cenvat credit under the Cenvat Credit Rules, 2004 or refund, shall be liable to a penalty not exceeding the amount of such benefit or five thousand rupees, whichever is greater. The Hon ble Bombay Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neris with the preceding expression in the clause viz. carrying, removal or depositing etc. It is held that accordingly to the above doctrine, meaning of expression in any other manner of dealing with should be understood in sense similar or comparable to how preceding words viz. carrying, removing, depositing etc. are understood. In other words, in any other manner dealing with of the goods is also to some physical manner of dealing with the goods. In absence of the finding in the impugned order that the assesse has dealt with the goods physically or any allegation to this effect raised in the proceeding, penalty under Section 112(b) cannot be imposed. 5.12 We also find that the appellant cannot come within the ambit of Section 112(b) because appellants had never acquired possession or in any way concerned in any of the activities mentioned in the Section or any measure dealing with any goods which the appellants knew or had reason to believe are liable to confiscation. In the absence of the department having proved the knowledge of the appellant in the activities relating to the smuggled gold, there were no grounds for imposition of penalty on him.It is now well establishe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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