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2023 (8) TMI 359 - AT - CustomsLevy of penalty u/s 112 (b) of the Customs Act, 1962 - Smuggling - gold biscuits of foreign origin - demand merely on the basis of the statements of the employees of the appellant - existence of corroborative evidences or not - HELD THAT - The similar issue has been examined by the judicial pronouncement in RAMCHANDRA VERSUS COLLECTOR OF CUSTOMS 1991 (9) TMI 206 - CEGAT, NEW DELHI , wherein this Tribunal has observed no sale has been established, identity of the buyer and seller has not been established. As a consequence, the currency cannot be considered to represent the sale proceeds of the contraband goods and, therefore, no violation of Section 121 has been made out. Since the charge under Section 121 of the Customs Act has not been proved against the appellant the currency notes cannot be retained by the Department and have to be returned to the appellant. Imposition of penalty is also not legal and proper in the absence of proof of violation of any provisions of the Customs Act. Further, in the case of SHRI HEM RAJ SONI, S/O SHRI HEERA LAL AND SHRI DWARKA DASS, S/O SHRI POKAR DASS VERSUS CCE, JAIPUR 2014 (5) TMI 88 - CESTAT NEW DELHI , this Tribunal has observed The contention of the Revenue that they are competent to confiscate the sale proceeds of the smuggled goods under Section 121 of the Customs Act is wholly fallacious. Thus, no evidence has been adduced against the appellant for involvement in the activity of smuggled gold and no cogent evidence has been produced apart from the statements recorded during the course of investigation that the appellant was involved in the activity of smuggled gold and cash recovered during search was the sale proceeds of smuggled gold. Therefore, the penalty on the appellant is not imposable. In the light of the above observations by the Hon ble High Court of Punjab Haryana in M/S G-TECH INDUSTRIES VERSUS UNION OF INDIA AND ANOTHER 2016 (6) TMI 957 - PUNJAB HARYANA HIGH COURT , it is held that as the statements which have been relied upon the adjudicating authority have not been examined in terms of Section 138 (B) of the Customs Act, 1962, therefore, the said statement cannot be relied upon to impose penalty on the appellant. Thus, in the facts and circumstances of the case, there is no evidence available against the appellant to impose penalty under Section 112(b) of the Customs Act, 1962 on the appellant. Therefore, the penalty imposed on the appellant is set aside - appeal allowed.
Issues Involved:
1. Imposition of penalty under Section 112(b) of the Customs Act, 1962. 2. Confiscation of gold and Indian currency. 3. Validity and reliability of statements and evidence. Summary: 1. Imposition of Penalty under Section 112(b) of the Customs Act, 1962: The appellant challenged the imposition of a penalty of Rs.4,88,18,000/- under Section 112(b) of the Customs Act, 1962. The Tribunal examined whether the penalty could be imposed based on the available evidence. It was found that during the investigation, the statements of Shri Shyam Sarkar and Shri Asit Roy did not mention any involvement of the appellant in smuggling activities. The recovered Indian currency was not conclusively proven to be the sale proceeds of smuggled gold. The Tribunal noted that the essential requirements for holding the currency as sale proceeds of smuggled gold were not satisfied, and the statements of the employees were not corroborated by any other evidence. Therefore, the penalty on the appellant was not justified. 2. Confiscation of Gold and Indian Currency: The gold biscuits and Indian currency recovered during the investigation were absolutely confiscated. However, the Tribunal observed that no other co-noticee had challenged the confiscation order. The Tribunal referred to several judicial pronouncements, emphasizing that for confiscation under Section 121 of the Customs Act, the sale of smuggled goods and the knowledge of the goods being smuggled must be established. In this case, none of these requisites were fulfilled, and the confiscation of the currency was not justified. 3. Validity and Reliability of Statements and Evidence: The Tribunal highlighted that the statements of the employees alone were insufficient to conclude that the recovered currency was the sale proceeds of smuggled gold. The statements were not corroborated by any other evidence, and the buyers of the alleged smuggled gold were not interrogated. The Tribunal also noted that the appellant's statement was never recorded during the investigation. The Tribunal referred to the judicial pronouncement in G-Tech Industries Vs. Union of India, emphasizing the importance of examining the statements in terms of Section 138B of the Customs Act, 1962. The Tribunal concluded that the statements relied upon by the adjudicating authority were not sufficient to impose a penalty on the appellant. Conclusion: The Tribunal set aside the penalty imposed on the appellant under Section 112(b) of the Customs Act, 1962, due to the lack of conclusive evidence and corroboration. The appeal filed by the appellant was allowed.
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