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TMI Blog2024 (5) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order. Imposition of penalty on appellant no.1 - W e observe that there is no evidence on record to show that appellant no.1 was involved in the smuggling of the gold into the country without payment of Customs duty. Appellant no.1 has been implicated by the two persons apprehended by the DRI, Kolkata. However, the search of the premises of the appellant no. 1 has not yielded any evidence in connection with the seizure of the said gold. Thus, we hold that the penalty imposed on the appellant no. 1 u/s 112 of the Customs Act, 1962 is not sustainable and accordingly, the same is set aside. Imposition of penalty on Shri Krishna Pramanik (appellant no. 2) - We observe that the apprehended persons have named one Krishna Sarkar as the person who handed over the gold to them. However, We do not find any evidence available on record to show that the said Krishna Sarkar and Krishna Pramanik are one and the same. The appellant no. 2 has been implicated in aiding transportation of the smuggled gold, but there is no evidence to substantiate this allegation. Thus, we hold that the penalty imposed on the appellant no. 2 is not sustainable. Imposition of penalty on the appellant nos. 3 and 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Customs Appeal No. 75998 of 2016 filed by Shri Sujoy Saha (hereinafter referred to as appellant no. 4 ) against the imposition of penalty of Rs.10,00,000/- under Section 112 of the Customs Act, 1962. 2. Brief facts of the case are that on 26.07.2014, at 07:30 hrs., Officers of the Directorate of Revenue Intelligence (DRI), Siliguri Regional Unit, visited the residence of the appellant no. 1 at Narayanpur, Near Vishwabharati Club, P.O. P.S. - Balurghat, District Dakshin Dinajpur, West Bengal in connection with the recovery of gold from two persons intercepted by the DRI, Kolkata at Burrabazar, Kolkata. The persons apprehended at Burrabazar have named the appellant no. 1 as the owner of the recovered gold and accordingly, the DRI, Siliguri has initiated follow-up action by searching the residential premises of the appellant no. 1. During the course of search, no documents related to the gold recovered from the two persons apprehended at Burrabazar were found from the residential premises of appellant no.1. However, Indian currency of Rs.46,00,000/- in the denomination of Rs.1000/- and 500/- was found in his house by the officers of DRI, Siliguri. The appellant no. 1 stated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty and kept for distribution among the legal heirs. This was affirmed by his brother Shri Bikash Kumar Agarwala also in his Statement dated 17.08.2014. (b) He has produced all the documents before the investigation authorities in support of his claim to return the Indian currency seized from his residence. (c) In his Statement dated 14.01.2015, Shri Narayan Agarwal,Chartered Accountant of the appellant no. 1, also stated that the currency was kept for distribution among the family members. (d) The investigating officers presumed that the Indian currency was the sale proceeds of the smuggled gold. However, there is no evidence submitted by the officers to substantiate their claim that the currency in question was the sale proceeds of the smuggled gold. (e) The appellant referred to an Order dated 08.10.2007 issued by the Superintendent of Customs, Balurghat, releasing 18 pieces of gold biscuits of foreign origin weighing 2099.52 grams involving his deceased father which was kept with their mother until her demise and submitted that the currency was the sale proceeds of that gold which was released by the Department and kept for distribution among the family members. (f) He furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is within the territory of India; there is no evidence available on record to conclude that the said gold was contraband, smuggled without payment of Customs duties; the seized gold has no connection with him as he has not played any role in the illegal importation of the seized gold; the ld. adjudicating authority in the impugned order has arbitrarily concluded that he has associated with the illegal importation of the seized gold; he reached Kolkata by train viz. Radhikapur Express from Kaliaganj Station and hence, there is no evidence to indicate that he was involved in the alleged illegal importation of the seized gold; even otherwise, gold is not a prohibited item and thus penalty imposed is arbitrary and very high and not commensurate with the charges levelled against him. Accordingly, he prayed for setting aside the penalty imposed on him. 10. Shri Sujoy Saha, appellant no. 4, submits that the penalty has been imposed on him under Section 112(a) and (b) of the Customs Act, 1962, but as per Section 112(b), the appellant should have prior knowledge or reason to believe that the gold he was carrying was liable for confiscation. In the instant case, he was found to be carryin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant no. 1 has submitted that they have received an Order from the Department vide Order dated 08.10.2007 releasing 18 pieces of gold by the Superintendent of Customs, Balurghat and the Indian currency seized was the sale proceeds of this gold, which was kept for distribution among his family members after the demise of his mother. We find that the investigation has failed to bring in any evidence to counter this claim made by the appellant no. 1. Thus, we observe that there is no evidence available on the record to show that the Indian currency seized was the sale proceeds of the gold smuggled by appellant no. 1. Accordingly, we hold that the seizure of the Indian currency amounting to Rs.46,00,000/- is not sustainable. 13.1.We observe that this view has been taken by the Tribunal in the case of Ramachandra v. Collector of Customs [1992 (60) E.L.T. 277 (Tribunal)], wherein it has been held that the Indian currency cannot be held as sale proceeds of smuggled gold and the same is not liable for confiscation. The relevant part of the decision is reproduced below: - 4. At the outset it is pertinent to note that no gold was seized either from the appellant or Shri Satram Das or Shri Bha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contraband goods and, therefore, no violation of Section 121 has been made out. Since the charge under Section 121 of the Customs Act has not been proved against the appellant the currency notes cannot be retained by the Department and have to be returned to the appellant. Imposition of penalty is also not legal and proper in the absence of proof of violation of any provisions of the Customs Act. 13.2. The same view has been held in the case of Sudesh Kumar Mittoo v. Collector of Cus. C.Ex., Jaipur [2001 (136) E.L.T. 100 (Tri. Del.)] wherein it was held as under: - 8. As regards the confiscation of Rs. 25,000/- Indian currency, it is not possible to say that this currency was as a result of transaction of smuggled gold biscuits. Gold biscuits have been sold by the jewellers to Shri Sudesh Kumar. The cash pertained to him and this cash was not out of smuggled gold. Therefore, confiscation of Indian currency is set aside. It is also seen that the Collector has not given detailed reasoning for confiscation of Indian currency in terms of reply given by Shri Sudesh Kumar. Therefore, confiscation of Indian currency is set aside. 13.3. In view of the above, we hold that the confiscation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position of penalty. 15.2. We observe that the goods in question are not 'prohibited goods' warranting severe penalty. The goods are 'restricted items' for which a lesser penalty would meet the ends of justice. We find that the appellants have heavily relied on the decision of the Hon ble High Court in the case of Gopal Saha (supra). However, from the facts of the said case, it is not coming out as to whether in the said case the gold in question had been absolutely confiscated or not and whether the appellants had satisfied the provisions of Section 123 of the Customs Act or not. 15.3. We observe that in the case of Sunny Kakkar v. Principal Commissioner of Customs (Prev.), New Delhi [Final Order No. 50108 of 2023 dated 06.02.2023 in Customs Appeal No. 52094 of 2018 CESTAT, New Delhi], the Tribunal found that the gold in question had been confiscated and the said fact had not been denied by the appellant. In this case also, the appellants have not disputed the absolute confiscation of the goods. Hence, relying on the said decision, we hold that the penalties imposed on the appellants herein cannot be equated with that in the case of Gopal Saha (supra). 16. We find ..... 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