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TMI Blog2023 (7) TMI 1131X X X X Extracts X X X X X X X X Extracts X X X X ..... ther found that the whatsapp chat relied upon by revenue is also not supported by the appropriate certificate as required under Section 138C of the Act. The revenue have placed reliance on the diary, stated to be recovered from the Noida flat, but the appellant was never put any question regarding the contents of the said diary. Thus the contents of the said diary have been wrongly relied upon by revenue in imposing the penalty. Further admittedly the name of the appellant is not mentioned in the said diary, wherein the name of one Anchal Jain is mentioned, from whom money is received as per the diary for expenses. There is violation of the provision of Section 138C of the Act, as well as the principles of natural justice. It is also found that it is the case of town seizure, and revenue have not laid any evidence as to the smuggled nature of gold, save and except assumption and presumption, and relying on the retracted statement. The provision of Section 123 of the Act are not attracted on this appellant, as neither he was found in possession of the gold, nor have claimed the seized gold. The penalty provision under Section 112(b)(i) is not attracted - Appeal allowed. - Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable for confiscation under Section 111 of the Act, and the vehicle used for the purpose of smuggling of the said goods was also liable for confiscation under Section 115 of the Act, the gold and the vehicle were seized under Section 110 of the Act. 4. Statement of Shri Karan Singh was recorded on 13/14.12.2018 wherein he inter alia stated that his elder brother named Jeevan Singh who resides at Guwahati was engaged in smuggling of gold. Jeevan Singh introduced him to one Mr. Samir Das in 2011 who is engaged in gold jewellery business at Karol Bagh. That he have been working for Mr. Anshul Jain (Appellant) for the last one year. Mr. Anshul Jain had offered him work of bringing gold from Purnia in Bihar to Delhi, for which he offered to pay him Rs. 20,000/- per trip. That Mr. Anshul Jain had other partners also namely Mr. Sohan Singh, Mr. Jatin Kumar, Mr. Harish and Mr. Meenu. Mr. Anshul Jain had given him the Creta car for bringing the smuggled gold from Purnia to Delhi. At Purnia, Mr. Mukesh Singh Rajput and Mr. Babu Maan used to conceal the smuggled gold bars (smuggled from Myanmar through Imphal) in the Creta car and then he along with Sohan Singh used to bring the gold con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the car, he identified Mr. Karan Singh, but did not recognise Mr. Sohan Singh. He further stated that the said gold belongs to 2 persons namely Mr. Ramey and Mr. Thomas, who are based at Gauhati, Assam. 7. Further stated that Mr. Ramey and Mr. Thomas, they bring gold bars of foreign origin from Myanmar and supply to various places in India. He came in contact with Mr. Ramey, in October 2018 through one Mr. Jeevan Singh, who works as gold purity tester in Karol Bagh market. Further stated that he has never met Mr. Ramey but contacts him through phone only. He had met Mr. Thomas once in Delhi. He used to contact them by messaging through whats app using Sim card of Myanmar having mobile number 9443449597. Further stated that he had thrown his mobile phone when he learnt about interception and recovery of gold bars from Karan Singh and Sohan Singh by the officers on 13.12.2018. He also admitted the claim of Mr. Karan Singh that he used to give money to him and other persons for bringing gold to his shop in Delhi. Further stated that he used to give money to them on instructions of Mr. Ramey. Further stated that on behalf of Mr. Ramey and Mr. Thomas, one of their key aid Prince ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shop, Jeevan Singh left Delhi after that. Further stated that he knew Jeevan Singh since 2012 13 and used to send gold for purity testing at his shop. On being asked about the 3 silver bars, he stated that the that same had been purchased from Raju Phatte, who used to sell gold polished (silver) sample bars, gold die and gold cutting articles. Further stated that he had purchased gold plated sample bars for displaying to customers. On being asked about foreign marking engraved on the sample bars, he stated that there is usually no gold bar with Indian marking, Thus, he purchased silver metal bars with foreign marking for displaying to customers. Further stated that out of the 3, 2 bars with foreign marking were for display and the 3rd bar with no marking was for making silver jewellery for household purpose. Further stated that the shop from where the metal bars have been recovered is owned by his mother, but he looks after the work. On being shown the printout of gold bars, showing weight measurements, recovered through whatsapp, He stated that these photographs are related to dealing of gold bullion, which were sent to tell the exact weight of gold. 13. Further statement of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... staff) Page 10 Travelling and car expenses incurred during trip by Soni 18. Further the said notebook also contains the details of payment by Karan Singh to other staff/carriers. 19. Notebook no. 2, it appeared contains the details of expenses, incurred by Shri Mohit for home and car service expenses. Also recorded is receipt of Rs. 22000/- on 19.11.2018 and Rs.1 lakh on 26.11.2018 from Mr. Karan Singh in cash. 20. Notebook No. 3 contains details of payments made to various persons by Karan Singh in cash. 21. It further appeared from above notebooks, that appellant had made cash payment of about Rs. 10 lakhs to Karan Singh during 21.11.2018 to 05.12.2018. 22. From the forensic investigation of Samsung Mobile (SM-j8 10G) of the appellant, certain pictures of gold bars pieces, which were sent through whats up on 12.10.2018 were retrieved. On query by revenue, the appellant in his statement dated 15.02.2019 stated that these photographs were relating to dealing in gold bullion which was sent to Shri Javed, the purity tester at Karol Bagh, who tells the exact weight of gold and its purity. 23. Screenshot fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Customs Act for the acts of omission and commission, as aforementioned. 28. The SCN was adjudicated on contest vide O-I-O dated 26.12.2019, ordering absolute confiscation of the seized gold bars totally weighing 10.065kg having market value of Rs. 3,46,87,700/- under Section 111 (d) (e) of the Act. Further, absolute confiscation of the three silver bars totally weighing 1454.99 gms valued at Rs. 59,332/- under Section 111 (d) (e) of the Act. Further order of confiscation of the seized Creta car bearing registration No. Up 16 BL 4593, used for transporting and concealing the gold bars which were seized on 13.12.2018 alongwith the gold, under Section 115(2) of the Act, giving option to redeem the car on payment of fine Rs.2 lakhs. Further penalty of Rs. 35 lakhs was imposed on this appellant- Anshul Jain under Section 112(b)(i) of the Customs Act. Penalty of Rs. 5 lakhs each was imposed on Mr. Karan Singh and Mr. Sohan Singh under Section 112(b)(i) of the Act. Penalty of Rs. 5 lakh was also imposed on Mr. Jeevan Singh under Section 112 (b)(i) of the Act. 29. Being aggrieved with the above penalty, this appellant filed appeal before the Commissioner (Appeals) inter al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss to recovery made. In this regard, reliance is placed upon case law of Commissioner of Central Excise, Delhi-| Vs. Kuber Tobacco India Ltd. (2016 (338) E.L.T. 113 (Tri. - Del.)]; viii. that the Appellant has challenged the veracity of the Panchnama and even disputed the recovery of gold in the presence of panchas; thus it was incumbent upon the Respondent to address the issue and should have allowed the request of the Appellant of cross examining the Panchas and the Officials who were monitoring the recovery thereof; ix. that it is settled law that the proceedings, including the departmental proceedings, are penal in nature, and, therefore, the burden is always on the department to establish the case, which in the present case has not been discharged by the department; x. that it is only on the basis of the statements of various co-noticees which the officers of the DRI had obtained from them and which had remained uncorroborated, it has been alleged that the Appellant was associated with smuggling activities and had abetted the smuggling and, as such, rendered himself liable for penalty; xi. that nothing was recovered from the Appellant and that he was dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ross-examination by the appellant, to ascertain the above stated facts and to satisfy the two fold test laid as a principle, for their respective statements and to ascertain as to on what basis they or any one of them had named the appellant herein, as being involved in the alleged act of smuggling and/ or have worked under the instructions/ directions of the appellant and to further bring on record the truth of the matter. Further the persons who named the present appellant have never responded to the summons sent by the adjudicating authority and never turned up for the purpose of cross examination. Thus therefore their statement cannot be relied upon to impose penalty upon the appellant. That it is submitted that the entire allegations upon the Appellant is solely based upon the statements which are not corroborated.Reliance is placed upon the decision in Arsh Castings Pvt. Ltd. v. CCE (1996(81) E.L.T. 276], Balbir Steel Pvt. Ltd. v. CCE [1999 (114) E.L.T. 561] and Emmtex Synthetics Ltd. Vs. CCE, New Delhi [2003 (151) E.L.T. 170 (T)] wherein it has been held that no presumption can be made on the basis of uncorroborated, uncross-examined evidence. Reliance was also placed upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 112(b)(i) of the Act is not imposable on the appellant. The appellant would place reliance on the judgment of the Hon'ble Calcutta High Court rendered in the case of Commissioner of Customs Vs. Sanjib Kr. Deb, reported in 2018 (359) E.L.T. 325 (Cal.) wherein on the similar facts, where the department had failed to prove the ingredients of section 112(b) of the Act, qua the person, it was held that penalty under section 112(b) of the Act is not imposable. XIX. that the Respondent failed to appreciate that in the present case there is seizure of gold worth Rs: 3,46,87,700/- (Three Crores Forty Six Lakhs Eighty Seven Thousand and Seven Hundred only). Had it been Appellant's property, he would not have disowned such valuable property. This shows that the appellant was innocent but was falsely implicated in the instant case and huge amount of penalty was imposed upon him. The Respondent should have examined the submissions of the appellant in true perspective but he declined to consider the same and wrongly passed the impugned order in hot haste. XX. The appellant's financial condition is not sound to pay such huge penalty of Rs. 35,00,000/- '(Rupees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Department. b) Karan Singh states that the appellant provided the car to him to bring gold from Purnea to Delhi. But he later states that the car is registered in Sohan Singh s name. The Departmental investigation also shows that the car was registered in the name of Sohan Singh and price was paid for by him. The appellant neither paid for the car, nor is it registered in his name. c) Karan Singh states that Mukesh and Babu Maan (partners of the appellant) in Purnea gave Karan Singh the gold and concealed it in the car. However, the appellant in his statement on 13/14.12.2018 has not mentioned Mukesh or Babu Maan. Instead, the appellant stated that the gold belonged to Ramey and Thomas, who bring it from Myanmar and supply all over, and he gave money to Karan Singh or some other person on instructions of Ramey and Thomas. This shows that gold was sent by Ramey and Thomas and not Mukesh and Babu Maan. d) Karan Singh is shown some alleged chats between him and the appellant, to which Karan Singh states that this is for the past. However, the appellant is never confronted with the alleged chats for reasons best known to the Department, and thus the alleged cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms Act is not attracted for the seized silver as proper invoices were given and the fake same Serial numbers and fake foreign markings clearly show that it was locally purchased. Furthermore, it is not unusual for a jeweller to own silver worth Rs.59,332/-. Therefore, the silver is requested to be returned to the appellant. 31.3 As seen from his statement dated 15.2.2019, the appellant was shown alleged print outs of photos recovered from his mobile phone, to which the appellant replied that these referred to weight measurements of gold in the normal course of business of trading in gold bullion. However, it can be seen that these photos do not refer to the seized gold of the present case, neither do the alleged photos refer to any smuggled gold. The photos cannot be relied upon in absence of certificate u/s 138C Customs Act. 31.4 As seen from the CDRs and appellants statement dated 26.02.2019, according to the Department the appellant spoke to Babu Mann from 7.11.2018 to 04.12.2018, however the seizure took place on 13.12.2018, showing that the appellant had nothing to do with the seized gold. Also, the CAF clearly shows that the phone number being attributed to the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date when the case was booked. 31.10 Even otherwise, there is no foreign marking on the gold and it is of purity 99.5% showing that it is domestic gold and not foreign gold. Domestic gold being usually of 99.5% purity, has been held in a catena of judgements, viz Final Order No 71671-71672 dated 04.09.2019 in Appeal Nos C/70395-70396/2019 titled as Neeraj Aggarwal Bipat Bind vs Commissioner of Customs (Preventive) Lucknow. 31.11 Presumption under Section 123 applies only on people from whose possession gold is found or who claim ownership of the gold. Since the gold was never seized from the appellant s possession (but from possession of Karan Singh and Sohan Singh from inside the Creta Car), nor did the appellant ever claim ownership of the gold, since he is no way connected, and a false case hoisted upon him. The provisions of Section 123 Customs Act do not apply on the appellant. Thus, penalty u/s 112(b)(i) of Customs Act cannot be imposed on the appellant. 31.12 Since there are contradictions in various statements; and the appellants statement cannot be relied upon, since the SCN holds the appellants statements as stories; and there has been no examination or cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... homas. Further urges that the plea for cross- examination does not carry much weight, when all the three accused/noticees were involved in smuggling in connivance with others. He relies on the ruling of Telangana High Court in Mohammad Muzammil vs. CBIC 2021-376-ELT-46 wherein the court observed: Therefore, we are of the opinion that no prejudice has been caused to the petitioner by the action of the second respondent in denying the opportunity to cross examine to the other person who have implicated them in the said act of smuggling. 33. Reliance is also placed on the ruling in Janki Das Madan and others vs. CCE, New Delhi, C/51684-51686/2022, final order dated 19.05.2023, where it has been held that there is no infirmity when an opportunity to cross examine the persons involved is denied to the appellant. Further urges that the right to cross examine is not an absolute right. The statement recorded under Section 108 of the Act carried evidentiary value. Even when retracted, it have been held that where the statement are corroborated by the other accused persons, in their statement, it cannot be said that retraction renders the evidence of such statement invalid. The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id to be the owners of the gold in question. I further find that in view of retraction made by the appellant and other conoticees, it was incumbent on revenue to examine the witnesses in the adjudication proceedings, as required under Section 138B of the Act. I further find that the whatsapp chat relied upon by revenue is also not supported by the appropriate certificate as required under Section 138C of the Act. I further find that revenue have placed reliance on the diary, stated to be recovered from the Noida flat, but I find that appellant was never put any question regarding the contents of the said diary. Thus the contents of the said diary have been wrongly relied upon by revenue in imposing the penalty. Further admittedly the name of the appellant is not mentioned in the said diary, wherein the name of one Anchal Jain is mentioned, from whom money is received as per the diary for expenses. It further appeared that no proper punchanama was drawn nor notice given to the appellant at the stage of retrieving data from mobile phone. Thus there is violation of the provision of Section 138C of the Act, as well as the principles of natural justice. I also find that it is the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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