2020 (1) TMI 71 - AT - Customs

Imposition of penalty u/s 112 of CA - Smuggling - Gold bars - seizure was made by Police and subsequently handed over to Customs - allegation based on statements of the persons carrying gold were recorded by Customs in Custody - corroborative evidences found or not - HELD THAT - It is undisputed fact that the gold bars under seizure are smuggled into India. None has claimed ownership of the gold. The persons from whom those were recovered are not in appeal even. Though initial seizure was made by Government Railway Police, and was handed over to Customs and Customs initiated the proceedings under the provisions of Customs Act, 1962. On the basis of statements recorded from the two persons from whom the foreign gold was recovered, the Department conducted search of different persons, examined them and recorded their statements. On inquiry from mobile service provider, it was found that there were conversation taking place between members of Jain family and the said carriers at the probable time of handing over the gold at the residence of Kamal Kumar Jain, though Conversation details is not available. Santosh Kumar Jain having his business in Birgunj, Nepal is also found to be using the address of Shri Santosh Kumar Jain in India. Ankur Kumar Jain and Saurav Kumar Jain are sons of Shri Santosh Kumar Jain - the premise of Shri Krishna Kumar Jain at Raxaul was searched and they were examined only after intervention of Hon ble High Court at Patna. In consideration of the circumstances, there is no doubt that they are involved in the present deal of smuggling. However, the Department has not been able to establish/distinguish the specific role played by the family members namely Ankur Kumar Jain and Saurav Kumar Jain. Also, the Department has not been able to establish the involvement of Shri Arjun Sah in the case and the penalty imposed upon them i.e. Shri Saurav Kumar Jain alias Raja, Shri Ankur Kumar Jain alias Vicky Jain and Shri Arjun Sah is not sustainable and accordingly ordered to be set aside with consequential relief, if any. A penalty of ₹ 5,00,000/- only on Shri Krishna Kumar Jain and Shri Santosh Kumar Jain would serve the ends of justice. Appeal allowed in part.

Summary

Issues: Smuggling of gold bars, confiscation under Customs Act, imposition of penalties, involvement of various individuals, appeal against Order-in-Original.

Smuggling of Gold Bars:
The case involved the recovery of four gold bars of foreign origin, each weighing one kg, from two individuals at a railway station. The gold bars were concealed in their shoes and handed over to Customs Officers for further proceedings under the Customs Act, 1962. The individuals admitted to being involved in smuggling foreign gold bars and revealed details of their illegal activities in the past.

Confiscation and Penalties:
Following investigations and statements recorded under the Customs Act, the Adjudicating Authority confiscated the seized gold bars and imposed penalties on multiple individuals involved in the smuggling operation. The penalties ranged from two lakhs to ten lakhs, based on the roles and connections of each person with the seized gold.

Involvement of Various Individuals:
Several individuals, including carriers, suppliers, and hawala operators, were implicated in the smuggling case. Statements and investigations revealed connections between the carriers and suppliers, as well as financial transactions facilitated by hawala operators. Different penalties were imposed based on the level of involvement and evidence against each individual.

Appeal Against Order-in-Original:
Upon appeal, the Order-in-Original was upheld for some individuals by the Commissioner (Appeals), while others appealed to the Tribunal. The appellants challenged the penalties imposed, arguing against the reliance on recorded statements and lack of incriminating evidence. Legal precedents were cited to support their submissions.

Tribunal's Decision:
After considering the arguments and evidence presented, the Tribunal found that while there was sufficient evidence to establish the involvement of certain individuals, the specific roles of some family members and an operator were not adequately distinguished. As a result, the penalties imposed on these individuals were set aside. However, penalties of five lakhs each were upheld for two main individuals involved in the smuggling operation.

Conclusion:
The appeals filed by the appellants were allowed with modifications to the penalties imposed, emphasizing the need for a clear establishment of individual roles and involvement in smuggling activities. The Tribunal's decision aimed to ensure justice while considering the evidence and legal principles applicable to the case.