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2022 (4) TMI 269 - AT - CustomsTime Limitation - Smuggling - Gold - retraction of statements - confiscation - penalty - whether SCN is issued beyond the permissible period or not - applicability of Section 123 of the Customs Act - Reasons to believe - penalties - Whether the seizure of 3 kgs gold from Shri Jitendra Kumar Mishra is legal in and proper? - HELD THAT - It is found that the Appellants Shri Jitendra Kumar Mishra changed his version in his two statements. Initially he stated that the gold was handed over to him at Calcutta by two persons namely Baikunth Nath and Balram working for Jalan at Calcutta and in his later statement he submits that the gold was purchased from Jaipur on 14.02.2015 in the account of Shri Sonu Verma. Though the Department has come to the conclusion that the changed version of Shri Jitendra Kumar Mishra cannot be agreed as his movements, as per call records of Shri Jitendra Kumar Mishra or Sonu Verma do not indicate their movement from Allahabad to Jaipur or their persons in Jaipur during the material time and that during the material time they were around Calcutta only. To this extent, the submission by Shri Jitendra Kumar Mishra could he held to be inconsistent if not totally wrong as held by the Department. The Department could have made enquiries with the said Indian Art Gallery regarding the licit purchase of the impugned gold, if any. Not having done so, the Department has lost an opportunity tofalsify the claim of Shri Jitendra Kumar Mishra, in a comprehensive manner. However, for that reason it cannot be said that the burden of proof has been discharged entirely by either side. However, smuggling of the gold being very sensitive issue, in the absence of definitive discharge of the burden of proof by the claimant along with documentary evidence, the benefit of doubt should go to the Revenue, therefore, not withstanding the claims of the Appellants, we find that the impugned gold has been rendered liable for confiscation on the merits of the case. Whether the penalties imposed on different persons are justified in the facts and circumstances of the case? - HELD THAT - The retracted statement, that too the only evidence, cannot be a basis for imposing penalty on various persons, as above. Inclusion of various names in the investigation and seeking imposition of penalty, without adducing sufficient evidence, would not help the cause of the case and in fact would go to dilute the case. The roles of different persons, other than Shri Jitendra Kumar Mishra, have not brought out clearly by the investigation so as to render them liable for penalty under Section 112(a) of the Customs Act, 1962. It is found that Shri Jitendra Kumar Sharma has rendered himself liable for penalty as he has rendered the seized Gold Liable for confiscation. Whether the proceedings should stand scrutiny of law in view of the direction given by Hon ble High Court of Calcutta in THE UNION OF INDIA, THROUGH COMMISSIONER OF CUSTOMS, (PREVENTIVE) VERSUS JITENDRA KUMAR MISHRA 2018 (1) TMI 1679 - CALCUTTA HIGH COURT in the impugned matter? - Appellants submits that Commissioner has flouted judicial discipline and the adjudication order is not maintainable due to the facts that no show cause notice was issued on the last date of limitation under Section 110 of Customs Act, 1962 - HELD THAT - Hon ble High Court at Calcutta have not accepted the stand of the Department that under the statute, there was no necessity of giving opportunity of hearing on further matter notice to the person from whom goods have been seized for extension of time for issue of show cause notice. Notice was given in this case. The same was a superfluous exercise and not a legal necessity accepting the reliance placed by the Counsel for Shri Jitendra Kumar Mishra. The show cause notice issued by the Department to extend the time period under Section 110 ibid has been set aside by the Hon ble High Court at Calcutta. Under the circumstances, it is found that the show cause notice issued to extend the time period under Section 110 of the Customs Act, 1962 is nonest. Therefore, the show cause notice dated 11.02.2016 proposing confiscation of gold and imposition of penalties is to be held to have been issued beyond the limitation in terms of Section 112 the Customs Act, 1962 and, therefore, is liable to be set aside. There were reasons to believe and a reasonable belief that the impugned gold is liable for confiscation. However, following the order of Hon ble High Court, Calcutta that the show cause notice is time barred in terms of Section 110 of the Customs Act, 1962. There are no evidence is put forth to show any appeal has been filed against the order of the Hon ble High Court and if so, whether any stay is granted. Under the circumstances, following the principles of Judicial Discipline, we hold that the goods are required to be returned in terms of Section 110 of the Customs Act, 1962. Levy of penalty on Shri Jitendra Kumar Mishra u/s 112(a) of the Customs Act, 1962 - HELD THAT - The imposition of penalty can be sustained despite the seizure being vacated. As Shri Jitendra Kumar Mishra, having rendered impugned goods liable for confiscation under Section 111 of the Customs Act, 1962, has rendered himself liable for penalty under Section 112 ibid - it is found that under the facts and circumstances of the case, penalty can be reduced as it is found that the penalty should be commensurate with the role played by the individual and the pecuniary gain if any that would of have accrued to the individual as a result of such acts of omission and commission in rendering the goods liable to confiscation - Penalty imposed on Shri Jitendra Kumar Sharma is reduced to 2,00,000/-. Appeal allowed in part.
Issues Involved:
1. Legality of the seizure of 3 kgs gold from Shri Jitendra Kumar Mishra. 2. Justification of penalties imposed on various individuals. 3. Validity of the proceedings in light of the Calcutta High Court's directions. Issue-Wise Detailed Analysis: 1. Legality of the Seizure of 3 kgs Gold: The seizure of 3 kgs of gold from Shri Jitendra Kumar Mishra was based on his initial statement that the gold was handed over to him by two individuals in Kolkata. However, he later claimed the gold was purchased from Indian Art Gallery, Jaipur. The Department's investigation found inconsistencies in his statements and failed to confirm the licit purchase from Jaipur. The gold bars were marked with "Valcambi Suisse, 1 Kg. Gold, 995.0 CHI ESSA YEUP FOUNDEUR," and the purity was certified as 995.0 by the Chemical examiner. Despite the inconsistencies, the burden of proof was not definitively discharged by either side. Given the sensitivity of smuggling issues, the benefit of doubt was given to the Revenue, rendering the gold liable for confiscation. 2. Justification of Penalties Imposed: The Commissioner imposed penalties on several individuals, but the investigation did not clearly establish the roles of all parties involved. Key individuals like Shri Ram Chander Verma and his sons were not examined, and their involvement was based solely on the initial statement of Shri Jitendra Kumar Mishra, which was later retracted. The principle of natural justice was violated as the accused were not allowed to cross-examine witnesses or receive copies of their statements. Consequently, penalties on individuals other than Shri Jitendra Kumar Mishra were found to be unjustified. However, Shri Jitendra Kumar Mishra was held liable for a reduced penalty of ?2,00,000. 3. Validity of Proceedings in Light of Calcutta High Court's Directions: The Calcutta High Court set aside the order extending the time for issuing the Show Cause Notice (SCN) and directed the Department to issue a fresh SCN. The Department's appeal was dismissed, and there was no evidence of further appeal or stay by the Apex Court. Therefore, the SCN dated 11.02.2016 was deemed time-barred. The principle of judicial discipline required adherence to the High Court's order, leading to the setting aside of the confiscation of gold and the return of the goods under Section 110 of the Customs Act, 1962. Order: 1. Confiscation of the impugned gold is set aside. 2. Penalty on Shri Jitendra Kumar Mishra is reduced to ?2,00,000. 3. All other appeals are allowed. (Order pronounced in the open court on 28 March 2022.)
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