2024 (6) TMI 402 - AT - Customs

Jurisdiction for issuance of show cause notice and Order-in-Original - levy of penalty u/s 112(a) and 112(b) of the Customs Act - confiscation of gold jewelleries - Issuance of show cause notice beyond 6 months - Non-application of the mind by the Commissioner - Onus to prove (shifting burden). Confiscation of the seized gold jewellery - HELD THAT - The issue of confiscation of gold jewellery recovered from the possession of Shri Niazi Pathan Nymatullah Khan is not a subject matter for decision in this appeal. As far as the confiscation of the gold jewellery is concerned, there are no reason to indulge in the examining the legality of the same in the order of the Commissioner (Appeals), as no appeal has been filed by Shri Niazi Pathan Nymatullah Khan against the said absolute confiscation. Levy of penalty u/s 112(a) and 112(b) of the Customs Act - HELD THAT - Shri Dumpy Kumar Jain has not denied his association with Shri Nasarulla Khan and Shri Nymatulla Khan in relation to gold jewellery seized from the possession Shri Nymatulla Khan and in fact he has tried to claim the ownership also but further investigation conducted and especially the investigation at the end of the supplier clearly showed that Shri Dumpy Kumar Jain had tried to cover up for the seizure of jewellery made on 18.12.2020, by referring to some other unrelated transactions made with HK Chains on earlier occasions and this act makes him liable for penalty under Section 112, in as much as he abated with Nasarulla Khan in relation to the seized gold jewellery, and indirectly with Nymatulla Khan by trying to claim the same as his legitimate jewellery. The seized gold jewellery were liable to confiscation and actually confiscated, against which no appeal has been filed by Shri Niazi Pathan Nymatulla Khan. Jurisdiction for issuance of show cause notice and Order-in-Original - HELD THAT - The matter has already been dealt with by the Original Authority and there are no reason to interfere with the same in as much as the Additional Commissioner work under who is having jurisdiction over the entire geographical area and he can adjudicate any matter arising within the jurisdiction in terms of any specific or general order given by Commissioner and therefore it does not vitiate the adjudicating proceedings. It is not disputed that the Additional Commissioner, who has adjudicated the case is not within administered control of the Commissioner, who has the jurisdiction over the entire area where the goods were seized. Issuance of show cause notice beyond 6 months - HELD THAT - It is noticed that in terms of general relaxation for limitation due to COVID as allowed by Hon ble Supreme Court in COGNIZANCE FOR EXTENSION OF LIMITATION 2022 (1) TMI 385 - SC ORDER , there is no breach of limitation of 6 months as the show cause notice could have been issued up to 28.02.2022, whereas, in this case, the show cause notice has been issued on 10.12.2021. Non-application of the mind by the Commissioner - HELD THAT - Because of multiple persons involved in carrying the offending goods and drawal of different panchanamas, facts applicable to Shri Jacky Jain has been analysed as the facts applicable to Shri Dumpy Kumar Jain by the Adjudicator. However, that alone will not make it a case of non-application of mind if the entire Order-in-Original and Order-in-Appeal are read holistically bringing out the culpability of Shri Dumpy Kumar Jain vis-a-vis the offending goods, which were liable for confiscation and were actually confiscated by the Adjudicator. Onus to prove (shifting burden) - HELD THAT - In this case, interception was made on specific intelligence, recovery of jewellery was made from concealed compartment, Shri Niazi Pathan Nymatulla Khan could not give any valid answer to the bonafide purchase or source or documents at the time of seizure and in fact gone wrong details about source, therefore Section 123 was rightly invoked for seizure and the onus to prove thereafter shifted to Shri Niazi Pathan Nymatulla Khan to prove otherwise that it is neither smuggled good nor made out of smuggled gold. Further, he has chosen not to come in appeal against said decision or confiscation. Therefore, in the facts of the case penalty has been rightly imposed on Shri Dumpy Kumar Jain under Section 112(a) and 112(b) of the Customs Act 1962 and therefore there is no legal infirmity in the impugned order passed by Commissioner (Appeals) - Appeal dismissed.

Summary

Issues Involved:
1. Jurisdiction for issuance of show cause notice and Order-in-Original.
2. Validity of the seizure and confiscation of gold jewelry.
3. Imposition of penalty under Section 112(a) and 112(b) of the Customs Act.
4. Timeliness of the show cause notice issuance.
5. Allegation of non-application of mind by the Commissioner.

Detailed Analysis:

1. Jurisdiction for Issuance of Show Cause Notice and Order-in-Original:
The appellant argued that the Adjudicating Authority lacked jurisdiction to issue the show cause notice and Order-in-Original. However, the Tribunal found that the Additional Commissioner, who adjudicated the case, was within the administrative control of the Commissioner having jurisdiction over the area where the goods were seized. Therefore, the adjudicating proceedings were not vitiated.

2. Validity of the Seizure and Confiscation of Gold Jewelry:
The main issue was whether the seized gold jewelry was liable for confiscation. The Customs Officers intercepted a car based on specific intelligence and seized gold jewelry valued at Rs. 15,16,553/-. The appellant claimed ownership of part of the jewelry but failed to provide corroborative evidence. The Tribunal upheld the Adjudicating Authority's decision, noting that the appellant and the person from whom the jewelry was seized failed to prove that the jewelry was not made from smuggled gold. The confiscation was deemed valid as the reasonable belief for seizure was established under Section 123 of the Customs Act.

3. Imposition of Penalty under Section 112(a) and 112(b) of the Customs Act:
The Tribunal examined whether the appellant was liable for a penalty under Section 112(a) and 112(b). The appellant admitted to making payments for the jewelry and having associations with the person from whom the jewelry was seized. The Tribunal found that the appellant's actions amounted to abetment and dealing with goods liable for confiscation. Therefore, the penalty was rightly imposed.

4. Timeliness of the Show Cause Notice Issuance:
The appellant contended that the show cause notice was issued beyond the statutory period of 6 months. However, the Tribunal noted that due to general relaxation for limitation periods allowed by the Supreme Court due to COVID-19, the show cause notice issued on 10.12.2021 was within the permissible period.

5. Allegation of Non-Application of Mind by the Commissioner:
The appellant argued that the Commissioner relied on facts related to another person, Shri Jacky Jain, while deciding the penalty. The Tribunal acknowledged this but stated that it did not constitute non-application of mind when the entire orders were read holistically. The culpability of the appellant vis-a-vis the offending goods was established, and the penalty was justified.

Conclusion:
The Tribunal dismissed the appeal, upholding the penalty imposed on the appellant under Section 112(a) and 112(b) of the Customs Act. The confiscation of the gold jewelry was deemed valid, and the jurisdiction of the Adjudicating Authority was affirmed. The show cause notice was issued within the permissible period, and the Commissioner's decision was not found to suffer from non-application of mind.