2024 (1) TMI 463 - AT - Customs

Levy of penalty u/s 112 (a) and 112(b) of the Customs Act, 1962 for involvement in the smuggling activities of gold of foreign origin - HELD THAT - The department has not brought in any evidence on record to show involvement of the appellant in the alleging smuggling. The impugned order admits that the appellant has procured the gold from Mr. Santosh Patil. Even if it is imported gold, the appellant cannot be held responsible for the offence, if any, committed by Mr.Santosh Patil. The appellant cannot be penalized just because he was in possession of the gold which is taken from Mr. Santosh Patil, as there is no evidence available on record to establish that the involvement of the appellant in the alleged smuggling of the gold. The penalty imposed on the appellant under section 112(a) and 112(b) is not sustainable - Appeal allowed.

Summary

Issues:
- Appeal against penalty imposed for alleged involvement in smuggling activities of gold of foreign origin.

Summary:
The appeal was filed against the penalty imposed on the appellant for his alleged involvement in smuggling activities of foreign origin gold. The appellant, working as a goldsmith, had taken 5 pieces of gold bars from a shop without being aware of their origin or purity. The appellant claimed innocence, stating he was only taking the gold for making ornaments and had no knowledge of any smuggling activities. The appellant argued that there was no evidence linking him to the smuggling of the gold.

The Authorized Representative (AR) contended that the appellant had purchased the gold without producing any legitimate documents for its possession, justifying the penalty imposed. After hearing both sides and examining the documents, it was found that the appellant was indeed in possession of the gold bars. However, there was no evidence to prove that the appellant had purchased the gold or was aware of its origin. The appellant had not claimed ownership of the gold, and the appeal was solely against the penalty imposed on him.

The Tribunal noted that there was no evidence presented by the department to establish the appellant's involvement in the alleged smuggling. Even if the gold was imported, the appellant could not be held responsible for any offense committed by the seller. As there was no proof of the appellant's direct involvement in smuggling, the penalty imposed under section 112(a) and 112(b) of the Customs Act, 1962 was deemed unsustainable. Consequently, the penalty imposed on the appellant was set aside, and the appeal was allowed.