2023 (10) TMI 180 - AT - Customs

Absolute Confiscation - Penalty - Gold Bar - entire allegation is based upon the statement of Shri Narayan Sharma - despite request cross examination of the said person was denied - violation of principles of natural justice - HELD THAT - As far as the appeal of Shri Narayan Sharma is concerned, it is found that in his confessional statement, he has admitted that he was a carrier of the gold which was recovered from the cavity near the driver seat in the Bus bearing No. PB-02-CR 3991 operated by M/s Inter Globe Aviation Limited (Indigo Airlines). Further, Shri Narayan Sharma has stated in his confessional statement that he is working as salesman with M/s Ganesh Book Depot and went to Dubai along with Shri Vaibhav Rai son of Shri Rakesh Rai and brought the gold which was handed over to Shri Sahib Singh driver of the bus. Further, in his statement, he admitted that Shri Rakesh Rai and Shri Vaibhav Rai played major role in the entire smuggling of gold and both were the actual beneficiary of the smuggling of gold and he was only getting Rs. 10,000/- as a carrier for carrying the gold and handing over the same to the driver of the bus. The demand of customs duty has been wrongly confirmed under Section 28 of the Customs Act along with interest under Section 28AA because no show cause notice which is required to be served upon the person chargeable with duty was issued to Shri Narayan Sharma - the demand of duty of Rs. 11,80,872/- alongwith interest under Section 28AA of the Customs Act is not sustainable in law - Penalties upheld. It has been held by the Hon'ble Supreme Court in the case of KI. PAVUNNY VERSUS ASSTT. COLLR. (HQ.) , C. EX. COLLECTORATE, COCHIN 1997 (2) TMI 97 - SUPREME COURT , the confessional statement under Section 108 of Customs Act, 1962, if found to be voluntary, can form the sole basis of conviction and that the burden is on the accused to prove that the statement was obtained by threat, duress or promise. The entire case is based on facts and statements of the appellants coupled with documentary evidence about purchase of gold in Dubai and how its purchase/smuggling was facilitated by the appellants and the role played by each one of them has been discussed in detail in order-in-original - further, the penalties imposed on Shri Pardeep Saini and Shri Rakesh Rai amounting to Rs. 15,00,000/- each is on the higher side which is reduced to Rs. 5,00,000/- in each case. Appeal disposed off.

Summary

Issues Involved:
1. Confiscation of gold and Indian currency.
2. Imposition of customs duty and penalties.
3. Validity of statements under Section 108 of the Customs Act, 1962.
4. Role and involvement of each appellant in the smuggling activity.

Summary:

Confiscation of Gold and Indian Currency:
The Commissioner of Customs ordered the absolute confiscation of a gold bar weighing 995.5 grams valued at Rs 32,98,350/- under sections 111(d), 111(i), 111(l), and 111(m) of the Customs Act, 1962. Additionally, Indian currency of Rs 2.20 lacs was confiscated from the premises of Noticee 2, Sh. Pardeep Saini, under Section 121 of the Customs Act, 1962.

Imposition of Customs Duty and Penalties:
- Duty of Rs 11,80,872/- was confirmed on gold valued at Rs 30,67,200/- and ordered for recovery from Noticee 3, Sh. Narayan Sharma, along with interest under section 28AA of the Act.
- Duty of Rs 23,44,804/- was confirmed on gold valued at Rs 60,90,400/- and ordered for recovery from Noticee 4, Sh. Rishab Saini, along with interest under section 28AA of the Act.
- Various penalties were imposed on the appellants under Section 112 and Section 117 of the Customs Act, 1962, ranging from Rs. 5,000/- to Rs. 15,00,000/-.

Validity of Statements Under Section 108 of the Customs Act, 1962:
The Tribunal found that the confessional statements made by the appellants under Section 108 of the Customs Act were admissible and could form the sole basis of conviction. The statements were not obtained under duress or coercion and were not retracted at any point. The Tribunal upheld the findings of the Commissioner based on these statements.

Role and Involvement of Each Appellant:
- Sh. Narayan Sharma: Admitted to being a carrier of the gold, receiving Rs. 10,000/- for each transaction. The Tribunal set aside the duty demand of Rs. 11,80,872/- but upheld the penalty of Rs. 1,00,000/-.
- Sh. Pardeep Saini: Assistant Manager (Fire Service) at the Airport Authority of India, involved in the smuggling activities but no direct recovery from him. The penalty was reduced from Rs. 15,00,000/- to Rs. 5,00,000/-.
- Sh. Rakesh Rai and Sh. Vaibhav Rai: Actively involved in the smuggling, with Rakesh Rai providing foreign currency for purchasing gold. The penalty on Rakesh Rai was reduced from Rs. 15,00,000/- to Rs. 5,00,000/-, while the penalty on Vaibhav Rai was upheld at Rs. 5,00,000/-.
- Smt. Sreet Saini: No direct involvement but her vehicle was used in the smuggling. The penalty of Rs. 50,000/- was upheld.

Conclusion:
The Tribunal upheld the absolute confiscation of the gold bar and Indian currency, reduced some penalties, and set aside the duty demand on Sh. Narayan Sharma. The appeals were disposed of in these terms.