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TMI Blog2022 (10) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... h huge penalties, the department ought to have taken sufficient care to supply all relied upon documents to the appellant. The adjudication conducted without supply of relied upon documents is against principles of natural justice and vitiated. The Adjudication Authority held that the appellant was issued summons dated 10.09.2019 and 12.09.2012 to appear before investigating authority. It is observed that the appellant had sought time and requested for another date of his appearance. However, the Adjudicating Authority held that act of none appearance of the appellant, hence mensrea on part of the appellant - From the statement of Shri Milan Raythatha, it reveals that appellant used to make payment in occasional cases under instruction of Shri Rutugna Trivedi, since he is brother in law of the appellant.Merely because the appellant made payment in some occasions that itself does not mean that the appellant has financed to Shri Rutugna Trivedi for smuggling of Gold. The statements of Ms. Nita Chunilal and others persons remain uncorroborated during the investigation. Of course, no offence should be established merely based on the statement of thirdparty and without corroborati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 4-10-2022 - MR. RAMESH NAIR , MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri Hardik Modh, Advocate for the Appellant Shri. R. P Parekh, Superintendent (Authorized Representative) for the Respondent ORDER This appeal is filed by the Appellant against the Order-In-Original No. AHM-CUSTM-000-COM-015-016-21-22 dated 29.11.2021 whereby the Commissioner of Customs, Ahmedabad imposed the penalty of Rs. 2,28,00,000/- under Section 112(b)(i) of the Customs Act 1962 in relation to his role in the alleged smuggling of Gold activity. 2. The brief facts of the case as per the department is that the officers of Airport Intelligence Unit, Ahmedabad found that Shri Jignesh Savaliya working as Duty Officer, M/s Globe Ground India on 04.06.2019, to be behaving in a suspicious manner with a passenger in the Aerobridge of Bay No.32 and found to be in possession with yellow metals. The officers conducted personal search of Shri Jignesh Savaliya whereby it was found to him carrying 9 brown packets in the presence of panchas under panchanama dtd. 04.06.2019. The officers opened the packet and found the same contained 47 gold bars. The officers seized the said gol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the travel agent through whom the tickets were purchased for the carriers on the instruction of Shri Rutugna Trivedi Ms. Nita C. Parmar and the dates of arrival of the carriers in India at SVPI Airport, Ahmedabad. The details recorded in the diary of Shri Jignesh Savaliya as well as in the WeChat messages recovered from his mobile phone were verified with the actual arrival dates of the persons as available in records of Airport and found to be correct. 2.2 With this background, show cause notices were issued proposing confiscation of the seized goods under Sections 111(d), 111(i), 111(I) and 111(m) of the Customs Act, 1962 and demanding customs duty and imposition of penalty under Section 112(a) 112 (b) and Section 114A Section 114AA read with Section 123 of the of the Customs Act. Appellant was also issued show cause notice whereby it was alleged that the Appellant had also financed to Shri Rutugna Trivedi, which was used by him to procure Gold in Dubai and to smuggle the same into India. Thus it appears that Appellant was knowingly involved in smuggling of gold into India which he had reasons to believe the smuggle under Section 111 of the Customs Act, 1962. After ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer 2020 (42) GSTL 178 Thoppil Agencies Vs. Assistant Commissioner of Commercial Tax -2020 (41) GSTL 30(Kar.) Shree Parvati Metals Vs. Union of India -2018 (11)GSTL 137 Kay Pan SugnadhPvt. Ltd. Vs. C.C.Ex. 2017 (7) GSTL 276 3.2 He also submits that the investigating authority neither searched the premises of the Appellant nor recorded his statement during the course of investigation. Except the alleged worksheet retrieved from pen-drive recovered from the residential premises of Ms. Nita Parmar, no other documents was unearthed for which the Appellant can be fastened for huge liability of penalty. Burden lies upon the revenue to prove that the Appellant was indulged in smuggling of gold into India. Such burden has to be discharged with cogent and tangible evidence. The revenue has not discharged its burden. In absence of any affirmative statement or corroborative documents or evidence, such serious finding made in the impugned order cannot be sustained. He placed reliance on following decisions. Dabesh Prasad Nanda Vs. C.C.Ex. 2016 (332) ELT 733 (T) Asha Shivshankar Pillay Vs. C.C. 2003 (161) ELT 392 (T) Jai Narain Verma Vs. C.C. 1995 (76) ELT 421 (T) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Customs Act, 1962. 6.1 We find that role of the Appellant in the whole episode has been derived only from the printout sheet/emails retrieved from the pen-drive seized from the residential premise of Ms. Nita Parmar. The said pen drive containing worksheet title Vipul Joshi which was allegedly found in folder named Rajubhai . The foremost point raised by the appellant is that they have not been supplied said worksheet. It is seen that the department has not given copies of the said relied upon documents to Appellant. This is clear from the letter dtd. 12.10.2021, 11.11.2021 and 30.11.2021 submitted by the Appellant. Clearly, relied upon documents have not been supplied by department. When the show cause notice is issued proposing to impose such huge penalties, the department ought to have taken sufficient care to supply all relied upon documents to the appellant. The adjudication conducted without supply of relied upon documents is against principles of natural justice and vitiated. 6.2 The Adjudication Authority held that the appellant was issued summons dated 10.09.2019 and 12.09.2012 to appear before investigating authority. It is observed that the appellant had sough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of concerned that despite the name of the appellant was found appearing in the worksheet retrieved from Pen drive, the investigating authority neither searched the premises of the appellant nor recorded his statement during the course of investigation.Except the alleged worksheet retrieved from Pen drive, no other documents were unearthed. Therefore, there is no direct evidence to implicate the appellant for fastening the huge penalty under Section 112(b). In spite of whatever material found by the investigating Agency for making allegation against the appellant, but it could not be established that the appellant was indulged in smuggling of Gold into India, with cogent and tangible evidence. Thus, the revenue failed to discharge its burden. In absence of any affirmative statements or corroborative documents or evidence, such serious finding made in the impugned order, in our view, it cannot be sustained. This gets support from this Tribunals decision in the case of Shakil Patel Vs. Commissioner of Customs (General) Mumbai -2018 (361) ELT 382 (Tri.-Mum.), wherein it was held as under: 3. After going through the impugned order and after appreciating the submissions made by b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.6 On merit to examine the above issues, it would be appropriate to analyse Section 112 of the Customs Act, 1962 which reads thus:- 112. Penalty for improper importation of goods, etc. Any person, - (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable, - (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater; From the perusal of above provision, it will be seen that for imposition of penalty on a person under Section 112(b), the following conditions must be satisfied. (i) The person must have acquired possession of or must be in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which are liable for confiscation under Section 111 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity of financing of a fund has been turned by the Ld. Commissioner into direct participation in the conspiracy to smuggle gold. For imposition of penalty under Section 112(b) of the Customs Act, 1962 the knowledge on part of the person has to be established. In the present matter department failed to do so. During the investigation officers did not find any documents/ piece of paper or any other evidence from the premises of Appellant to show that the Appellant financed money for smuggling of gold into India. 6.9 We also find that there is absolutely no evidence on record connecting the appellant with the commission of any offence in relation to the alleged gold smuggling activity. Merely because name of Appellant was appearing in printout sheet retrieved from the pen drive of Ms. Nita Parmar, that would not ipso facto make the appellant in any way privy to the commission of any offence with reference to the alleged gold smuggling activity. It will be unfair to fasten the appellant with penal consequences merely on the basis of a printout sheet recovered from the third party and statements of third party. Moreover we also observed that during the investigation statements o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws or has reason to believe are liable to confiscation under section 111. It is submitted that it is not the case of the Revenue that the Noticee was indulged in any of the activities as mentioned under Section 112(b) of the Customs Act. As the Appellant did not acquire possession of or in any way concern with import of gold, penalty under Section 112(b) ought not to have been imposed. 6.12 Section 112(b) of the Customs Act is identical to earlier Rule 209A of the Central Excise Rules, 1944 and Rule 26 of Central Excise Rules, 2002. Relevant extracts of the provisions of Customs Act, 1962 Central Excise Rules, 1944 and Central Excise Rule, 2002 are reproduced hereunder:- Section 112 Penalty for improper importation of goods etc. (a) **** (b) who acquires possession of or is in any way concerned in carrying removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111 shall be liable Rule 209A of the Central Excise Rules, 1944: Rule 209A. Penalty for certain offences. Any person who acquires poss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o acquires possession would indicate that the person sought to be penalized under this rule has to first acquire the possession and then do the activity of transportation etc. as contained in the rule. It is, thus, clear that the physical possession of the goods is a must for doing the activity of transporting referred in Rule 209A. The ratio laid down by this Court in Jayantilal Thakkar Co. (supra) covers the issue. In the said judgment, it is held that in the given situation, if the assessee is only issuing invoices wherein there is no movement of the goods, they cannot be visited with penalty under Rule 209A. 6.14 The Larger Bench of the Tribunal in the case of Steel Tubes of India Ltd. Vs. Commissioner of Central Excise 2007 (216) ELT 506, after referring to the decision of the Hon ble Bombay High Court in the case of Jayantilal Thakkar and Co 2006 (195) ELT 9 (Bom.) held that for imposition of penalty under Rule 209A of the Central Excise Rules, 1944, the person must have dealt with excisable goods with knowledge that they are liable for confiscation. 6.15 Similarly, in the case of R.C. Jain Vs. Commissioner of Central Excise and Service Tax 2016 (334) ELT 115 ..... 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