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TMI Blog2023 (4) TMI 833X X X X Extracts X X X X X X X X Extracts X X X X ..... earched and recorded statement of the Appellant and to further prosecute him in the matter on the basis of its finding. As the department has neither shown any evidence nor explained satisfactorily as to why they have not conducted follow up action with the Appellant at the investigation stage, not even a Summon U/s 108 of the said Act was issued. Therefore, the proceedings against Shri Ajay Sarawagi on the basis of the statements of the co-accused is not sufficient to hold him guilty of smuggling, especially when no search and recovery has been done at his place. It is a settled law that no person shall be implicated in a crime merely on the basis of an allegation leveled by a co-accused, without any corroborative evidence. Section 112(b) of the Customs Act, 1962 is not applicable to the facts of the present case because records show that the Appellant had never acquired possession or in any way was connected with the activities mentioned in the Section or in any manner dealing with any goods which the Appellant knew or had reason to believe are liable to confiscation. It is now well established that mens rea is an important ingredient for imposing penalty on the persons enumer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jay Sarawagi, as a supplier as well as caretaker of contraband goods after purchasing the same from Nampholong, Myanmar. (iii) The goods were sent by one Zuber Ali of Moreh in 4 Tata DI mini truck on 11.08.2019 and the same were received on 12.08.2019 at about 1000 hrs. (iv) After that the goods were loaded in the Truck NL 01-AC-1931 belonging to M/s. Chitransh Express Cargo Pvt.Ltd., which was arranged by Shri Ajay Sarawagi. (v) Shri Ajay Sarawagi gave him the mobile number of the driver of the truck and told him to contact him. He contacted the driver and told him to come to Langthabal to pick him up and will go to Yairipok to load the goods. 3. The Impugned orders show that the residential premises and shop of Shri Ajay Sarawagi was identified, but Shri Ajay Sarawagi could not be located though his residence was kept under surveillance. A Show Cause Notice was issued to the Appellant and others proposing confiscation of the seized goods under Section 111(b) (d) and imposition of penalty under Section 112 (b)(ii) on the Appellant. Being aggrieved, the Appellant is in Appeal before this Tribunal. 4. The Ld. Counsel, appearing on behalf of the Appellant, submits th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Amarjit Sahu might have concealed facts. It is not believable that he did not know the address or contact of Shri Zuber Ali, who has delivered the contraband goods worth Rs.4.00 Crores approx.. Call log records could have been verified to identify the persons, who were in contact with Shri Amarjit Sahu at the time of supply/movement of the goods, which could have conclusively proved the complicity of Appellant in the case or not . Proceeding on the basis of statement of co-accused is not sufficient to hold the Appellant guilty of smuggling in absence of any search and recovery from his place. The alleged statement of the co-accused cannot be relied upon to implicate a person on charges of smuggling. Therefore, it was incumbent on the Investigating Officer, to have searched and recorded statement of the Appellant and to further prosecute him in the matter on the basis of its finding. As the department has neither shown any evidence nor explained satisfactorily as to why they have not conducted follow up action with the Appellant at the investigation stage, not even a Summon U/s 108 of the said Act was issued. Therefore, the proceedings against Shri Ajay Sarawagi on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les of natural justice require that the accused in a matter is required to be confronted with the evidence, which the department has collected against him and full opportunity should be given to an accused to defend himself. It is not the case of the department that the address of Mohinder Singh is not correct. The postal remarks on the summons sent by the DRI shows that on repeated visits the shop was found to be closed and hence, the cover containing the summons were returned to the sender. The department officers cannot take this postal endorsement as `refusal of summons and the appellant Mohinder Singh had knowledge of the case. Therefore, the department officials not having apprehended and no further investigation having been done against him, is by itself sufficient to set aside the order of penalty against Mohinder Singh. We therefore, set aside the order of penalty passed against Mohinder Singh. Penalty under Section 112(b) of the Customs Act, 1962. Penalty under Section 112(b) of the Customs Act, 1962, can be imposed when a person acquires possession of or is in any way concerned in carrying, removing, depositing, harboring, keeping, concealing, selling or purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of goods falling both under clauses (i) and (iv) (iii), to a penalty [not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest; in the case of goods falling both under clauses (ii) and (v) (iii), to a penalty [not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest.] Section 112(b) of the Customs Act, 1962, is identical to earlier Rule 209A of the Central excise Rules, 1944, and Rule 26 of Central Excise Rules, 2002. Relevant provisions of the said statutes are extracted below:- Rule 209A of the Central Excise Rules, 1944: Rule 209A. Penalty for certain offences. - Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding three times the value of such goods or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession of any excisable goods with the knowledge or belief that the goods are liable to confiscation under the Act or Rules or he has been in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing or has in any other manner dealt with any excisable goods with such knowledge or belief. Acquisition of possession of goods is, indisputably, a physical act i.e. the act which could not have been done without handling or movement of excisable goods as mentioned in the rule. The words who 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 assess is only issuing invoices wherein there is no movement of the goods, they cannot be visited with penalty under Rule 209A. 10. The Tribunal in the case of D. Ankn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re liable to confiscation under section 111....... In order that a person is penalised under the above provision, it has to be established that he acquired possession of or was 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 knew or had reason to believe, were liable to confiscation under Section 111 of the Act. Ld. DR has harped on the expression underlined above and submitted that the appellant had dealt with the goods by associating himself with the modus operandi of clearance of the goods. Ld. Counsel has opposed this argument. We find that no physical act of the appellant in relation to the goods in question has been brought out to justify the penalty. The expression in any other manner dealing with has to be understood ejusdem generis with the preceding words/expressions in the clause in terms of the Apex Court s ruling in Thakur Amar Singhji v. State of Rajasthan [AIR 1955 SC 504]. The Court held thus :- the true scope of the rule of ejusdem generis is that words of a general nature following specific and particular words should be construe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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