2023 (7) TMI 318 - AT - Customs

Levy of penalty - confiscation of Gold along with option of redemption fine - gold seized were of foreign origin, cannot be established by Department - HELD THAT - On going through the recorded statements, it is seen that both Shri Debabrata Saha and Sanjay Ray have clearly admitted in their Recorded Statements that they were given these gold biscuits by Bangladeshi National for handing over the same to an Indian person. For this task, these two Appellants have been given Rs. 3,000/-. They have stated that Shri Mithun Ghosh, is one of their friends and they had approached him to lend the car for their personal use. Both of them have stated that Shri Mithun Ghosh is not involved in this activity in any way. From the Order-in-Original, it is seen that all these Recorded Statements have been relied upon by the Department. The Adjudicating Authority has not given any finding as to why all three statements stating that Shri Mithun Ghosh was not involved in the smuggling activity and his car was used without his knowledge for this purpose. Without giving any finding as to why the Recorded statements are not applicable, the Adjudicating Authority has confiscated the vehicle and imposed redemption fine. This Bench concludes that no case has been made out against Shri Mithun Ghosh. Accordingly, confiscation of this vehicle with an option to redeem the same in respect of Shri Mithun Ghosh along with penalty imposed on him stands set aside - In respect of the other two Appellants, it is clear that they have indulged in the smuggling activity and they have given their statements in terms of Section 108 which has not been retracted at any time before Adjudicating Authority/Appellate authorities. However, considering the fact that they are only the carriers of the gold and gold valued at more than Rs. 39 Lacs has already been absolutely confiscated, the penalties of Rs. 4,00,000/- imposed on them is reduced to penalty of Rs. 1,00,000/- each. Appeal disposed off.

Summary

Issues involved: Penalties imposed against individuals for smuggling gold of foreign origin and confiscation of a vehicle used in the smuggling activity.

Summary:

Issue 1: Penalties imposed for smuggling gold of foreign origin
The Appellant argued that the Department lacked concrete evidence to prove the seized gold was of foreign origin and that proper proceedings were not conducted before concluding the gold was being smuggled. The Advocate prayed for setting aside the penalties and confiscation of the vehicle. On the other hand, the Learned AR contended that the gold was smuggled, supported by statements recorded under Section 108 of the Customs Act, where the Appellants admitted to transporting foreign origin gold. The lower Authorities were deemed correct in confiscating the gold and imposing penalties. The Bench reduced the penalties from Rs. 4,00,000/- to Rs. 1,00,000/- each considering the Appellants were carriers and a substantial amount of gold had already been confiscated.

Issue 2: Confiscation of vehicle used in smuggling activity
The recorded statements indicated that the third Appellant, Shri Mithun Ghosh, was not involved in the smuggling activity and had lent his vehicle to the other two Appellants unknowingly. However, the Adjudicating Authority did not provide reasons for confiscating the vehicle and imposing a redemption fine. The Commissioner (Appeals) mechanically confirmed the order without addressing the issue of Shri Mithun Ghosh. The Bench concluded that no case was made out against Shri Mithun Ghosh and set aside the confiscation of his vehicle and the penalty imposed on him.

In conclusion, the Appeals were disposed of with the penalties reduced for the first two Appellants and the confiscation of the vehicle with an option to redeem set aside for Shri Mithun Ghosh.