2020 (2) TMI 355 - AT - Customs

Levy of penalty u/s 112 (a) of the Customs Act, 1962 - smuggling of Gold - reliance placed on statements of co-noticees, which were later on retracted - call records also formed basis of demand - HELD THAT - In the Order-in-Original, the Adjudicating Authority has, no doubt, explained very succinctly the modus operandi of the main accused and the involvement to some extent of Mr. Francis and Mr. Karunanithi, from where the role of the appellant kicks in, and as the Adjudicating Authority has extracted, both appear to have stated that the appellant knew about the gold smuggling. Their statements assume relevance since both of them have inter alia stated that they are working in the appellant s service agency which fact has not been denied - Now, the appellant s explanation regarding the call records coupled with the extracts of statements of persons apprehended on the early hours of the eventful day lead us to understand that considering the gravity and nature of the offence/activity alleged, the explanation offered in the form of reply is not at all sufficient to conclude as to the innocence of this appellant, as pleaded. Considering the calls on record, the appellant cannot wash off his responsibility with a total denial that he did not know Mr. Khaja at all and that there was only a wrong call for about 6 seconds, etc. There has been some calls as well on 10.03.2015 between Mr. Khaja and the appellant, the appellant and Mr. Mathiarasu and again, the appellant and Mr. Khaja, which clearly leads to suspicion for which the appellant could only answer. The Revenue has made out a case by linking the chain of events, phone calls, etc., towards the scheme planned well in advance for executing anti-national activity by defrauding the Revenue, as brought on record very succinctly by the Adjudicating Authority in the form of unchallenged statements and the call records - there are no reasons to interfere with the impugned order - appeal dismissed.

Summary

Issues:
Levy of penalty under Section 112(a) of the Customs Act, 1962 based on alleged involvement in smuggling of gold bars.

Analysis:
1. The appellant contested the levy of penalty under Section 112(a) of the Customs Act, 1962, solely based on statements of co-noticees and call records. The appellant argued that other evidence like forensic analysis did not implicate him in any wrongdoing. The co-accused retracted their statements, claiming coercion, and denied the appellant's involvement. The appellant's denial of involvement and lack of incriminating evidence against him were key points in his defense.

2. The Revenue, on the other hand, supported the penalty imposition, citing call records showing communication between the appellant and individuals involved in smuggling activities. The Revenue argued that the appellant, as the head of the security agency, was aware of the illegal activities and benefited from them. The call records were crucial in establishing a link between the appellant and the main accused, indicating his active role in the conspiracy.

3. During the proceedings, the absence of statements from key individuals like Mr. Francis, Mr. Karunanithi, and Mr. Shahul Hameed, along with the lack of retracted statements on record, posed a challenge in assessing the veracity and content of the evidence. The appellant's defense emphasized his lack of knowledge about the smuggling activities and highlighted the unreliability of the call records as conclusive proof of his involvement.

4. The Adjudicating Authority detailed the modus operandi of the main accused and the involvement of the co-accused, suggesting the appellant's awareness of the smuggling operation. The Authority relied on statements indicating the appellant's knowledge of the illegal activities, considering his position as the head of the service agency where the accused were employed.

5. The Tribunal analyzed the call records and statements to determine the appellant's culpability. Despite the appellant's defense of routine communication as part of his security agency duties, the consistent communication with key individuals involved in smuggling raised suspicions. The Tribunal found the Revenue's case linking events, phone calls, and evidence of anti-national activity compelling, leading to the dismissal of the appeal.

In conclusion, the Tribunal upheld the penalty imposition based on the evidence presented, including call records and statements of co-accused, indicating the appellant's involvement in the smuggling operation. The decision highlighted the significance of establishing a chain of events and communication patterns to prove the appellant's active role in executing the illegal activity, ultimately leading to the dismissal of the appeal.