TMI Blog2022 (9) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... o be established. From the above statement of Appellant it is also clear that he had not confessed in his statement that he had knowledge about use of the funds provided to Shri Rutugna for alleged smuggling of gold activity. The evidence on record is not sufficient to hold that the appellant was involved in alleged activity of smuggling 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 with material particulars by independent evidence. The statement of co-accused cannot be used against the appellant, particularly when appellant has denied his involvement in respect of the goods in question - The evidence brought out by the department nowhere suggests that the appellant was aware that the goods in question were smuggled into the India. The penalty imposed on Appellant, therefore, cannot be sustained. Appeal allowed - decided in favor of appellant. - CUSTOM Appeal No. 10075 of 2022 - FINAL ORDER NO.A/11137/2022 - Dated:- 19-9-2022 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri Hardik Modh, Advocate for the Appellant Shri. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Shri Jitendra Rokad, Mehul Bhimani, Raju Goswami, Vipul Joshi and Lalit Jain. 2.1 The smuggling of gold from Dubai to India was carried out with intent not to pay Customs Duty using the persons as carriers. Upon arrival at SVPI Airport, Ahmedabad the gold carried by the carriers sent by Shri Rutugna Trivedi was handed over to Shri Jignesh Savaliya, either in the Aerobridge or in the ramp area of the airport. Shri Jignesh Savaliya had been concealing the gold in the dress worn by him and smuggled the same into India by exiting SVPI Airport, Ahmedabad. Shri Jignesh Savaliya has handed over such smuggled gold to Shri Rutugna Trivedi or the specific person sent by Shri Rutugna Trivedi and informed to Shri Jignesh Savaliya. Adopting the above modus operandi, Shri Rutugna Trivedi and his associates smuggled into India 4886.206 Kgs. Gold during the period from 07.03.2013 to 26.05.2019. The authenticity of the details of the gold smuggled into India by various carriers sent by Shri Rutugna Trivedi has also been corroborated by the travel details provided by the travel agent through whom the tickets were purchased for the carriers on the instruction of Shri Rutugna Trivedi Ms. Nita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... di was for import by smuggling of gold. The Appellant did not have knowledge of use of this fund. 3.2 He further submits that investigating authority recovered the documents from the Pen Drive seized from residential premise of Ms. Nita Parmar on 26.06.2019. One of the documents reflected name of the Appellant for paying an amount to Shri Rutugna Trivedi, based on documents retrieved from pen- drive, it is held that the Appellant financed to Shri Rutugna Trivedi for smuggling Gold. The Appellant denied that he financed them for smuggling of gold. The Appellant is not concerned with the documents/emails retrieved from Pen Drive seized from residential premises of Ms. Nita Parmar. Even statements of Shri Rutugna Trivedi and Ms. Nita Parmar were recorded whereby they did not say that the Appellant had knowledge about smuggling of gold into India or financed them for smuggling of gold. In absence of any documentary evidence to show that the Appellant financed to Shri Rutugna Trivedi for smuggling of gold, the impugned order imposing penalty based on the documents retrieved from third party cannot be sustained as it does not implicate the Appellant. He placed reliance on the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epositing, 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, are liable for confiscation under Section 111 i.e. he has knowledge or has reason to believe that any one or more of the contraventions mentioned in Clause (a) to (p) of Section 111 have been committed in respect of the imported goods acquired or dealt with by him. For imposition of penalty under Section 112(b) of Customs Act, 1962, it is also necessary to prove that the person had knowledge or had reason to believe that the goods acquired or dealt with by him are liable for confiscation under Section 111. We find that as regard the role of Appellant Learned Commissioner in impugned order observed as under: The name of Noticee No.20 has appeared in the printouts of the sheets retrieved from the pen-drive seized from the residential premise of Ms. Nita Chunilal Parmar. Accordingly, the inquiry was extended to Noticee No. 20 and his statement w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not known now as the transactions are of 05 years back. For the security purpose he (Rutugna) had given me blank signed cheque of Rs. 50 lakhs. The copy of which is enclosed for your ready reference. Now, on being asked about one Shri Rutugna Arvindbhai Trivedi, I state that I know him personally since 2014. He came into contact with me through one of my client Shri Dimple Mistry. Thereafter Shri Rutugna Trivedi invested in my one of Scheme in the name of Sanidhya Tragad, Chandkheda, Ahmedabad in the name of his one of employee Shri Gopalbhai Panchal. On being asked I state that Shri Rutugna Trivedi also invested in my shceme of Industrial sheds in Moriya, Ahmedabad to establish his manufacturing factory. On being asked I state that the first amount of Rs. 50 Lakhs is same as discussed above in first and other amount is the amount given to him in October,2014 through cheques from different accounts of my family members. On being asked I state that I used to also lend him (Rutugna) amount through account payee cheques whenever he used to require funds for 3-6 months on interest basis. I am enclosing herewith the details of ledger accounts of accounts of my family mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und used by persons for smuggling of gold. During the investigation officers did not find any document/ piece of paper or any other evidence against the Appellant to show that the Appellant financed money for smuggling of gold into India. Clearly, the Appellant did not have knowledge of use of fund financed by him. Admittedly, the appellant has only arranged the finance in their regular course of money lending business, appellant did not deal with alleged gold smuggling activity in question. 5.3 We also find that role of the Appellant in the whole episode has been derived only from the printout sheet retrieved from the pen-drive seized from the residential premise of Ms. Nita Chunilal and statements of persons. Statements of said persons remained uncorroborated during the investigation in as much as related to the charge made against the present appellant. As per the department Shri Rutugna is 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 funded the amount for smuggling of gold. We have also gone through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the third party and statements of third party. The said printout at the most shows that Shri Rutugna Trivedi has borrowed money from the appellant, this is not under dispute. Now how that borrowed money was accounted for by borrower and use thereof is not relevant to the appellant. Moreover we also observed that during the investigation statements of Ms. Nita Parmar and Shri Rutugna Trivedi were recorded whereby they did not say that the Appellant was also involved in alleged activity of gold smuggling or Appellant had knowledge about smuggling of gold into India or financed them for smuggling of gold. 5.7 From the above-reproduced section 112(b) it can be seen that penalties can be imposed only if the individual is 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 document/ piece of paper or any other evidence against the Appellant to show that the Appellant had financed the money for smuggling of gold into India. Even if it is assumed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111 shall be liable Rule 209A of the Central Excise Rules, 1944: Rule 209A. Penalty for certain offences. Any person who acquires possession of, or is 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 three times the value of such goods or five thousand rupees, whichever is greater. Rule 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that for imposition of penalty under Rule 209A of the Central Excise Rules, 1944, the person must have dealt with excisable goods with knowledge that they are liable for confiscation. 5.11 Similarly, in the case of R.C. Jain Vs. Commissioner of Central Excise and Service Tax 2016 (334) ELT 115, the Hon ble Tribunal held that penalty under Section 112(b) of the Customs Act cannot be imposed if the assesse has not dealt with or transported goods physically in any manner. 5.12 The Tribunal in the case of D. Ankneedu Chowdhry Vs.Commissioner of Customs 2004 (178) ELT 578 held that in any other manner dealing with used in Section 112(b) of the Customs Act has to be read ejusdem generis 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 ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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