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TMI Blog2022 (10) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 brown packets in the presence of panchas under panchanama dtd. 04.06.2019. The officers opened the packet and found the same contained 47 gold bars. The officers seized the said gold under Seizure memo dated 04.06.2019. Statement of Shri Jignesh Savaliya was recorded wherein he stated that the said gold bars were given to him by a person named Shri Lokesh Sharma and he was supposed to hand over the same to 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 Jitendra Rokad reveal that a Gold smuggling racket was orchestrated and operated by Shri Rutunga Trivedi, his wife Smt. Hina Rutunga Trivediand their employee and key associate Ms. Nita C Parmar. This smuggling activity was aided by Shri Jignesh Savaliya, Asst. Duty Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India. Thus it appears that Appellant was knowingly involved in smuggling of gold into India which he had reasons to believe the smuggle under Section 111 of the Customs Act, 1962. After following due process, the adjudicating authority vide impugned order dated 29-11-2021confirmed the charges and demands proposed in Show Cause Notice. He imposed the penalty of Rs. 2,28,00,000/- under Section 112(b)(i) of the Customs Act 1962 on the appellant. Being aggrieved, the appellants preferred appeal before this Tribunal. 3. Shri Hardik Modh, Learned Counsel appearing on behalf of Appellant submitsthat Learned Commissioner erred in imposing penalty on Appellant. The impugned order violates the principles of natural justice. The impugned order has solely relied upon the worksheet title "Vipul Joshi" which was found in the folder named "Rajubhai" from pen drive retrieved from the residence of Ms. Nita Parmar. Appellant vide letter dated. 12.10.2021 and 30.11.21 demanded the said worksheet and reiterated the said request at the time of personal hearing. Despite this facts, the Ld. Commissioner passed the impugned order without supply of these vital documents. Since the impugned order has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisions. * Dabesh Prasad Nanda Vs. C.C.Ex. 2016 (332) ELT 733 (T) * Asha Shivshankar Pillay Vs. C.C. 2003 (161) ELT 392 (T) * Jai Narain Verma Vs. C.C. 1995 (76) ELT 421 (T) 3.3 He also submits that impugned order heavily relies upon the emails retrieved from Pen Drive seized from residential premises of Ms. Nita Parmar. Based on these emails, it is held that the Appellant financed to Shri Rutugna Trivedi for Smuggling of gold for which profit earned out of these activities were shared between the Appellant and Shri Rutugna Trivedi. The Appellant denies that he financed to Shri Rutugna Trivedi 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. 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 following decisions. * Raipur Forging Pvt. Ltd. Vs. Commissioner of Central Excise - 2016(335) ELT 297 * Commissioner of Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant was issued summons dated 10.09.2019 and 12.09.2012 to appear before investigating authority. It is observed that the appellant had sought time and requested for another date of his appearance. However, the Adjudicating Authority held that act of none appearance of the appellant, hence mensrea on part of the appellant. We find that only because the appellanthas not appeared that to stating the reasons of his non-availability on one or other pretext. It does not mean that the appellant is involved in smuggling of goods. The Hon'ble Mumbai High Court in the case of Mokhtar Mistry Vs. Additional Collector of Customs- 1994 (71) ELT 380 (Mum.) held that merely avoiding summonsis not sufficient to conclude that a person is concerned in the smuggling of goods. The Adjudicating Authority based on the statement of Shri Milan Raythatha, partner of S.R. Tours & Travels recorded on20.06.2019 that in certain cases, the appellant made payments pertaining to air-tickets booking of Shri Rutugna Trivedi only on this basis, it is not sufficient to conclude that appellant had knowledge about the smuggling of gold. From the statement of Shri Milan Raythatha, it reveals that appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 (361) ELT 382 (Tri.-Mum.), wherein it was held as under: "3. After going through the impugned order and after appreciating the submissions made by both the sides, we note that the entire case of the Revenue is based upon the statement of co-noticee without there being any further evidence. Though a number of summons were issued to the present appellant, but his statement could not be record as the appellant did not honour the summons. Further, no efforts were made by revenue to approach the present appellant in person, so as to record his statements. As such, we note that there is no statement of appellant and the penalty stand imposed upon him only on the basis of incriminating statement of the co-noticee. It is well-settled law that such statement of the co-noticee cannot be made the sole basis for penalizing a person". 6.3 This Tribunal in the case of the Dabesh Prashad Nanda Vs. Commissioner of C.Ex.- 2016 (332) ELT 733 (Tri.Del.) set aside the penalty on the premise that statement of the appellant was not recorded, even though import took place during his tenure when he was director of the Company. 6.4 Similarly, in the following decisions, it is held that uncorroborated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 6.7 We find that statements of Ms. Nita Chunilal and others persons remain uncorroborated during the investigation. Of course, no offence should be established merely based on the statement of thirdparty and without corroborative evidence and without granting cross examination of person whose statement alone is relied upon.The evidence on record is not sufficient to hold that the appellant inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd statements of third party. Moreover we also observed that during the investigation statements of Ms. Nita Parmar, Shri Mehul Bhimani, Shri Jitendra Rokad and Shri Rutugna Trivedi were recorded whereby they did not say that the Appellant 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. 6.10 From the section 112(b) 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 of offence on 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 financed the money for smuggling of gold into India. Even if it is assumed that the appellant has arranged the finance but appellant had no knowledge and did not deal with alleged gold smuggling activity in question. Facts borne on record revealed that the appellant has maintained all along that he never had t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral 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. 6.16 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 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. 6.17 We also find that the appellant cannot come within the ambit of Section 112(b) becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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