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Issues Involved:
Appeal against the order imposing penalty under Section 112 of the Customs Act and confiscation of Indian currency under Section 121 of the Act. Analysis: 1. The case involved the confiscation of 14 gold biscuits from Nepali nationals believed to be smuggled into India, with subsequent recovery of Indian currency from another individual. Show cause notices were issued, leading to the original authority imposing penalties and confiscating the goods and currency. 2. The appeal raised concerns regarding the confiscation of currency without involving a claimant of ownership at the investigative stage. The Counsel argued that the confiscation behind the claimant's back violated Section 124 of the Customs Act, which mandates issuing a show cause notice to the owner before confiscation. 3. The appellant contended that he was not involved in the confiscated gold biscuits and thus should not be penalized. The Counsel highlighted the lack of evidence supporting the claim that the currency was proceeds from the sale of contraband gold, as required for imposing a penalty under Section 112. 4. The Department defended the original authority's findings, citing circumstances justifying the currency being proceeds from the sale of gold biscuits. However, the contradictory statements made by the appellant regarding the purpose of the currency raised doubts about its origin and intended use. 5. The Tribunal analyzed the legal requirements for imposing penalties under Section 112, emphasizing the need to establish specific elements such as knowledge of goods' origin, seller-purchaser details, and the nature of the sale. The lack of evidence linking the confiscated currency to the seized gold biscuits led to the penalty on the appellant being vacated. 6. Regarding the ownership claim over the currency, the Tribunal noted the violation of Section 124 by not involving the claimant in the confiscation proceedings. The absence of a show cause notice to the claimant before confiscation rendered the confiscation unlawful, necessitating the setting aside of the impugned order. In conclusion, the Tribunal set aside the penalty imposed on one appellant due to insufficient evidence linking the currency to the confiscated gold biscuits and invalidated the confiscation of currency due to procedural violations, ultimately allowing the appeals.
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