2022 (5) TMI 1049 - AT - Customs

Levy of penalty u/s 112 of CA - Smuggling - Gold - cross-examination of witnesses - retraction of statements - HELD THAT - Admittedly the gold in question was recovered from two Philippines nationals namely S.B. Taha A.J. Macud, who in their respective statements have admitted the act of smuggling by them, as they have stated that they have brought this gold into India without declaring the same at the Customs check post when they arrived at New Delhi by air. This statement have never been retracted by the two Filipino nationals. Further, they have also not contested the show cause notice. Thus, the two Filipino national have admitted that act of smuggling for gain. So far these appellants are concerned, admittedly, none of them was found to be in possession of the seized gold nor there is any detail of any alleged conspiracy hatched between them with the Filipino nationals in the alleged smuggling. Admittedly, the appellant Mr. P.K. Arora is a dealer/trader in gold jewellery and bullion and the other two appellants were his employees at the relevant time. Admittedly, Mr. P.K. Arora was not in Delhi on 18th July 2014 and had gone to Mumbai to attend a jewellery exhibition. This fact has not been found to be untrue. The case of Revenue against these appellants have made out on the basis of their statements recorded at the time of investigation or the statement of the co-accused. All such statements were retracted soon thereafter. Further, these statements have also not stood the test of cross-examination during the adjudication proceedings - the two Filipino nationals have not taken the name of any of these appellants to the effect that the gold was to be delivered to these persons. Nor there is any exchange of telephone call by these appellants with the visiting Filipino nationals. The only corroborative evidence in the facts of the present case, is the recovery of 10 rupee note bearing serial no. 89L944808, from the appellant-Rajeev Kumar. Further, Mr. S.B. Taha, the Filipino national had also stated that he was to deliver the gold to the person who would have come to him bearing the 10 rupee note having the said serial no. Thus the allegation of abetment stands only against Mr. Rajeev Kumar. The appeal of Mr. Pawan Kumar Arora (50130) Mr. Amrit Pal (50116) and set aside the impugned order against them - So far, Mr. Rajeev Kumar is concerned, admittedly gold was not recovered from him, however there is strong evidence that he had gone on the said day to hotel Delhi Pride to receive the gold from the Filipino nationals. Accordingly, the imposing of penalty, imposed under Section 112 of the Act is upheld. However, under the facts and circumstances, it is found just and proper to reduce of quantum of penalty from Rs. 1 lakh. to Rs. 25,000/-. Appeal allowed in part.

Summary

Issues Involved:
1. Imposition of penalty under Section 112 on Mr. Pawan Kumar Arora.
2. Imposition of penalty under Section 112 on Mr. Rajeev Kumar.
3. Imposition of penalty under Section 112 on Mr. Amrit Pal.

Detailed Analysis:

1. Imposition of Penalty on Mr. Pawan Kumar Arora:
The primary issue was whether the penalty imposed on Mr. Pawan Kumar Arora under Section 112 of the Customs Act was justified. The adjudicating authority based its decision on the statements of co-accused and the alleged involvement in a conspiracy to smuggle gold. However, Mr. Pawan Kumar Arora was not present at the hotel during the seizure, and nothing incriminating was found during the search of his premises. The statements of co-accused, which were retracted, were the only evidence against him. The court noted that solely relying on retracted statements without corroborative evidence is insufficient for penal action. The court found that the Revenue failed to prove that Mr. Pawan Kumar Arora was involved in the smuggling activity. Therefore, the penalty imposed on him was set aside.

2. Imposition of Penalty on Mr. Rajeev Kumar:
Mr. Rajeev Kumar was penalized under Section 112 based on his presence at the hotel to receive the smuggled gold. He was found with a 10-rupee note, which was the identifier for receiving the gold. Despite his retraction and claim of being at the hotel for a part-time job, the court found strong evidence of his involvement in the act of abetment. However, considering the circumstances, the court reduced the penalty from Rs. 1 lakh to Rs. 25,000, acknowledging that while the gold was not recovered from him, his intent to receive it was evident.

3. Imposition of Penalty on Mr. Amrit Pal:
Mr. Amrit Pal was penalized under Section 112 for accompanying Mr. Rajeev Kumar to the hotel. He claimed to be unaware of the smuggling activity and stated that he was merely accompanying Mr. Rajeev Kumar. The court found no evidence of his direct involvement or complicity in the smuggling act. His statements, which were retracted, did not hold up under cross-examination, and there was no corroborative evidence against him. Consequently, the penalty imposed on Mr. Amrit Pal was set aside.

Conclusion:
The court allowed the appeals of Mr. Pawan Kumar Arora and Mr. Amrit Pal, setting aside the penalties imposed on them. The appeal of Mr. Rajeev Kumar was allowed in part, with the penalty being reduced to Rs. 25,000. The judgment emphasized the need for corroborative evidence and the insufficiency of retracted statements as the sole basis for penal action.