Custom, Excise & Service Tax Tribunal
Anshul Jain vs Commissioner, Customs (Appeal)-New ... on 18 July, 2023
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.
PRINCIPAL BENCH - COURT NO. II
Customs Appeal No. 50047 of 2023
(Arising out of Order-in-Appeal No.CC(A) CUS/D-II/Prev./NCH/605/2021-22 dated
09.07.2021 passed by the Commissioner of Customs (Appeals), New Delhi)
Anshul Jain Appellant
S/o Mr. Ghanshyam Jain
R/o 234, 2nd Floor, Tarun Enclave
Pitampura, New Delhi 110034
VERSUS
Commissioner, Customs (Appeals)- Respondent
New Delhi New Customs House, Near I.G.I Airport, New Delhi 110037 APPEARANCE:
Mr. Aakash Srivastava, Mr. Rahul Raheja & Mr. Utkarsh Srivastava, Advocates for the appellant.
Mr. Viswa Jeet Saharan, Authorised Representative for the respondent CORAM:
HON'BLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) FINAL ORDER NO. 50960/2023 DATE OF HEARING: 29.05.2023 DATE OF DECISION: 18.07.2023 ANIL CHOUDHARY:
The present appeal have been filed by the Appellant being aggrieved with the order of penalty under Section 112 (b) (i) of the Customs Act for Rs. 25 lakhs.
2. The Brief facts are that the office of DRI, DZU intercepted a white colour Creta car bearing registration number UP 16 BL 4593 before the toll 2 C/50047/2023 barrier at Jewar Exit Toll on Yamuna Expressway on 13.12.2018. Two persons occupying the car identified themselves as Karan Singh Alias Karnail Singh and Sohan Singh alias Soni and stated that they were coming from Purnia, Bihar via Agra. On being asked, if they were carrying any contraband or smuggled goods in their car, they replied in the negative. Thereupon, they were detained and brought with the car to the office of DRI, at CGO Complex, New Delhi and upon systematic search of the car, resulted in recovery of 61 pieces of yellow metal from a cavity near the gearbox. These pieces of yellow metal were marked as serial number 1 to 61 as detailed below:-
Marking No. Given Description written on the Total Quantity by the officers yellow metal bar 1 to 2 FDREMPO 165 grams each bar X
3 to 5 FDREOLO 61 bars or 10,065 6 to 10 FDEREMJO grams 11 to 15 EDFOGO 16 to 61 R-7
3. Upon personal search of both the persons nothing incriminating was found. The pieces of yellow metal were appraised by the Jewellery Appraiser
- by Mr. Vikram Bhasin, who assessed all the metal pieces/bars as of gold, having 995 purity, totally weighing 10,065 grms, valued at Rs. 2,85,25,430/-. On being asked the said persons Mr. Karan Singh and Mr. Sohan Singh could not produce any valid documents for the legal import/possession of the said gold bars. Therefore, on a reasonable belief that the aforementioned gold bars were smuggled and were 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 3 C/50047/2023 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 concealed in the car to Delhi and handover the gold bars to Mr. Anshul Jain at his shop namely M/s Surya Jewellers, Gali No. 8, Bedanpura, Karol Bagh, Delhi. That he had brought gold bars on 2 earlier occasions from Purnia to Delhi. On being shown the photograph of Anshul Jain, Mr Karan Singh identified him. Further stated that he knew the smuggling of gold is illegal, but for the greed of money he got involved.
5. Statement of Sohan Singh was also recorded on 13/14.12.2018 wherein he inter alia admitted that he along with Karan Singh, Jatin Kumar, Harish and Meenu were engaged in activity of smuggling for Mr. Anshul Jain. He had come to Delhi NCR in November 2018 and on being invited by Mr. Karan Singh alias Mr. Karnail Singh for bringing gold from Purnia to Delhi, he 4 C/50047/2023 joined him in the said activity. That he has made 5 visits to Purnia during 08.11.2018 to 13.12.2018. According to him, the gold biscuits were smuggled from Myanmar through Imphal in Manipur and then brought to Purnia (Bihar).
6. Follow up search was conducted at the residence and business premises of the Appellant on 14.12.2018, wherein nothing incriminating was found. From the premises, 3 silver bars weighing 1454.99 gms. were recovered. Statement of Appellant was recorded on 14.12.2018 wherein he inter alia admitted that the gold recovered from Mr. Karan Singh was to be handed to him at his Karol Bagh shop. Further submitted that the said gold did not belong to him. He admitted his involvement in smuggling of gold in past also and explained the modus operandi and name of other persons involved in it. The Appellant was put under arrest on the same day, that is, 14.12.2018. Mr. Anshul Jain inter alia also stated that he had started his shop in October 2014 in the name of 'Surya Jewellers' at Karol Bagh. He deals in trading of gold jewellery and gold bullion. Further stated, he used to purchase jewellery from various jewellers in Karol Bagh and Kucha Mahajani, Chandani Chowk in Delhi and thereafter, sell the same from the shop mostly on wholesale basis and sometimes on retail. He also stated that most of the payment to the sellers for purchase of gold bars are made through RTGS/bank and sometimes he does dealing of the gold bars in cash. On being shown the punchnama dated 13 December 2018, regarding seizure of gold along with the Creta car and the photographs of the 2 persons intercepted with 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 5 C/50047/2023 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, also used to coordinate. Further stated that Mr. Ramey used to forward the token number in the form of image of currency note through whatsapp and he used to deliver the gold bars to the person who were presenting the said currency note.
8. He further stated that gold was smuggled through Myanmar border via Imphal, brought to Delhi in 2 stages. 1st is the gold bars are brought to Purnia (Bihar) in a vehicle sent by Mr. Ramey, or Mr. Thomas. Thereafter, the said gold was received in Purnia by Mr. Karan Singh or other Delhi-based person and brought to Delhi by car, arranged by him. Further stated that for the 1st time he took delivery of the gold on 23 November 2018, which were 28 gold biscuits of about 165 gms totally weighing about 4 kg, thereafter, 6 C/50047/2023 prior to 13.12.2018 he had received consignment of gold from Mr. Ramey, or Mr. Thomas 3 to 4 times and the quantity each time was 6 to 7 Kg. Further stated that the image of currency note was also sent to Javed (gold purity tester in Karol Bagh) as token, as the delivery of the said gold was to be taken by the customer directly from Javed after testing.
9. As it appeared to revenue that the Appellant as well as Mr. Karan Singh and Mr. Sohan Singh were involved in smuggling of the seized gold, were put under arrest on 14.12.2018.
10. The 3 pieces of metal bars recovered from 2518/7, 2nd floor, Beadonpura, Karol Bagh, New Delhi vide punchnama dated 14.12.2018 were examined by Mr. Vikram Bhasin, jewellery appraisar on 17.12.2018 in presence of Shri Ghanshyam Jain (father of Appellant). As per the appraisal report, the 3 pieces of metal bars were of silver having purity 999 and weighing 1454.99 grms in total. The market value of the 3 silver bars was assessed at Rs. 59,332/- (tariff value Rs. 55,853).
11. Summons were issued to Meenu, Jatin and Harish who were stated to be living with Karan Singh and Sohan Singh (in Noida flat) and engaged by the Appellant - Anshul Jain, for assisting in smuggling. But none of them appeared for recording of the statement.
12. In a subsequent statement recorded on 15.02.2019, the Appellant inter alia stated that he could not contact Mr. Jeevan Singh as his mobile number is switched off and could not get any information about Mr. Ramey and Mr. Thomas. Further stated that Mr. Jeevan Singh used to work at Omji Ashahram Tounch at Karol Bagh. However, due to sealing of the shop, 7 C/50047/2023 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 Mr. Anshul Jain was recorded on 26.02.2019 wherein he inter alia stated that he used to purchase gold bullion from M/s Bombay Gold Lab, Chandani Chowk, R.S. Gold Chandani Chowk, S.R. Gold Chandani Chowk and M/s T.C. Jewellers Karol Bagh. He used to purchase gold jewellery from M/s Simex Traders Karol Bagh, Mansa Purna Gold, Jhaveri Bazar Mumbai, M/s PC jewellers, etc.
14. He further stated that mobile no. 7628813332, though used by him belongs to one Mr. Babu Maan from Purnia who works for Mr. Thomas.
15. It is appeared to revenue that the appellant who was engaged in 8 C/50047/2023 trading of gold bullion and jewellery, was also receiving the supply of smuggled gold from Purnia, Bihar through the means of various carriers such as Karan Singh, Sohan Singh etc. Further, he had provided the Creta Car for the purpose of carrying gold. He had also taken a flat on rent at Noida to house the carrier(s). Further the appellant was in contact with persons namely Shri Ramey and Shri Thomas who used to supply smuggled gold to him. On coming to know about the interception and seizure of gold by the officers, he threw away his mobile phone, through which he used to contact Mr. Ramey and Mr. Thomas and others.
16. Mr. Karan Singh and Mr. Sohan Singh, the occupants of the car were both carriers, who have deposed that they were working for Mr. Anshul Jain and used to make trips to Purnia for carrying gold to Delhi. At Purnia, they used to meet Shri Babu Maan and Shri Mukesh Singh Rajput who used to deliver the gold and hide the same in the car at Purnia.
17. During the search of flat at Noida where Karan Singh, Sohan Singh and other carriers were living, three notepads were found. On being shown, the notebook No. 1 to Karan Singh, he stated as follows:
Page No. Details as stated by Karan Singh in statement dated 14.12.2018 Page No. 1 Payment received from Shri Anshul Jain to him in lieu of delivery of gold from Purnia to Delhi Page No. 3 Payment made to staff from payment received at Page No. 1 Page No. 5 Travelling and car expenses incurred during trip by various staff (Babu, Ravi, Jatin, Harish, Mohit, Soni) Page No. 7-9 Home/Daily expenses (Noida flat) incurred by 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.
9 C/50047/2023
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 from whats app chat dated 02.12.2018 from Mobile phone of appellant no. 8375043909 with mobile no. 8376888159 (which belongs to Javed, the purity tester) was taken (RUV-27). On being shown, the images of gold biscuits sent by the appellant to Javed, Mr. Anshul Jain stated that these biscuits were received from Mr. Ramey and Mr. Thomas and thereafter sent to Mr. Javed for testing. Further on being shown images of currency note received from Javed, appellant stated that it was sent as token, as the delivery of the said goods was taken by customer directly from Javed, after testing.
10 C/50047/2023
24. Further as regards the ownership of Creta Car bearing No. UP 16 BL 4593, on basis of documents, it appeared that the said car was sold to Shri Sohan Singh on 10.12.2018 by some other person. Further from the statement of bank account of Axis bank of 'RG car sales', it was found that an amount of Rs. 10,50,000/- was credited in the bank account on 07.12.2018 in respect of sale of the said Creta car.
25. In spite of summons neither Shri Jeevan Singh nor Shri Sohan Singh joined the investigation.
26. Thus it appeared to revenue that the seized gold bars recovered from the cavity/box from the said Hyundai Creta Car on 13.12.2018 appeared to be smuggled and liable for confiscation under Section 111 of the Act r/w Section 123 of the Customs Act. The onus to prove the licit possession of the said goods was on Mr. Karan Singh or Mr. Sohan Singh or Mr. Anshul Jain, but none of them could produce any document showing the legal possession of the said gold bars, rather they admitted during investigation that the said seized gold bars were of smuggled nature and were being brought to Delhi for sale. Thus it appeared that all these persons were involved in the activity of smuggling by way of possessing, concealing, carrying, transporting etc. as regards the said goods which they knew or had reason to believe were liable to confiscation under the provisions of the Customs Act.
27. Accordingly, SCN dated 03.06.2019 was issued by the DRI, DZU, New Delhi being SCN No. 19/2019 proposing to confiscate the seized gold being 61 gold bars totally weighing 10.065 kgs having market valued of Rs. 3,46,87,700/-, seized on 13.12.2018, under Section 111(d) & (e) of the Act. Further proposed to impose penalty on the appellant (ii) Shri Karan Singh 11 C/50047/2023 and (iii) Shri Sohan Singh under Section 112(b) (i) 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 alia on the following grounds:-
i. that the Appellant is not concerned with carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing the smuggled goods as alleged;
ii. that the impugned order has been passed in utter disregard to the principles of natural justice, as the learned Commissioner (Appeals) failed to address the submissions made by the appellant during course of personal hearing;
12 C/50047/2023 iii. that the appellant has denied his involvement in the alleged act of smuggling, as is sought to be proved by the department, that too, on the basis of oral statements of co-accused in the show cause notice, which are not admissible in evidence, because such statements have not been corroborated by the material and cogent evidence so as to make them admissible evidence to be relied upon by the department against the appellant;
iv. that the learned respondent failed to consider that the appellant is a jeweller by profession and had not been associated with either import or export of any goods; that he is not the owner or the person holding himself to be the owner of the subject goods. The goods, which are subject matter of the present case, do not belong to him. The Appellant has also not claimed the ownership of such goods.
v. that the Respondent erred in not appreciating the fact that the Appellant has disputed the Panchnama dated 13.12.2018 on the ground that the same is fabricated. It is submitted that the Appellant was coerced to sign on blank documents which was later on altered and statements and other documents were printed upon them. The Panchnama dated 13.12.2018 cannot be relied upon. vi. that in the said Panchnama it is mentioned that the signatories of the Panchnama i.e. Mr. Karan Singh, Mr. Sohan Singh, the Investigating Officer and the Panchas have appended their signatures. But in reality there is no such signatures on the said Appraisement report. The facts recorded under paras of the Panchnama were thus manipulated.
13 C/50047/2023 vii. that the Respondent has erred in not appreciating the fact that due to irregularity in the Panchnama, the Appellant had requested for cross examination of the Panchas and the Officials under guidance of whom the same was made. That the Hon'ble Delhi High Court in a catena of judgments has held that Panchnama is the statement of Panchas as they are independent witness 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 dragged into this case solely on basis of the statement of the co-
14 C/50047/2023 noticees; that it is important to mention that the co-noticees have retracted from their statement at the first available opportunity; that conviction cannot be based solely on Co-Accused's Confessional Statement. Reliance is placed upon on following case laws:-
1. Surinder Kumar Khanna Vs Intelligence Officer Directorate of Revenue Intelligence; (2018) 8 SCC 271;
2. Hari Charan Kurmi And Jogia Hajam vs State Of Bihar; 1964 AIR 1184, 1964 SCR (6) 623.
XII. that the Respondent erred in not appreciating the retraction made by the Appellant and the other co accused. During the investigation the statement is recorded under section 108 of the Customs act, if the same is retracted later, it cannot be used against the maker of the statement if the same is not rebutted by the department with corroborative evidence. The Appellant referred to following case laws in this regard:
1. MohteshamMohd. Ismail 2007 (220) ELT 3 (S.C.)
2. M/s Hissar Pipes Pvt. Ltd Vs. CCE, Rohtak, 2015 (317) ELT 136 (Del.),
3. Commissioner of Income Tax v. Dhingra Metal Works 2010-
TIOL- 693-HC- DEL-IT.
4. Emmtex Synthetics Ltd. v. CCE, New Delhi - 2003 (151) E.L.T. 170 (T)
5. M.M. Dyeing &'Finishing v. CCE, Chandigarh - 2002(139) E.L.T. 143 (7) 15 C/50047/2023
6. Kothari Products Ltd. v. CCE, New Delhi - 2001 (13S) E.L.T.
531. XIII. that the law does not permit to implicate or to hold any person guilty of any alleged violation of law on basis of uncorroborated testimony of a Co-Accused. Reliance is placed upon Francis Stanly @ Stalin Vs. Intelligence Officer, Narcotics' Control Bureau, Thiruvanthapuram (2008 (13) SCALE 386], XIV. that imposition of penalty upon the appellant for the alleged offence(s) based on the uncorroborated testimonies is wholly illegal. Where there is no corroboration of the statement of co-noticee by other evidence, the other Noticee (i.e., the present appellant herein, Mr. Anshul Jain) cannot be held guilty of the alleged offence or contravention of the provisions of law alleged against him-in the present case, as alleged in the show cause notice. And, that corroboration has to be from an independent source. XV. that the learned respondent failed to consider that the appellant requested to summon Mr. Karan Singh and Mr. Sohan Singh, for cross-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 16 C/50047/2023 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 the following case laws:
1. COMMISSIONER OF CENTRAL EXCISE. DELHI-I Versus KUBER TOBACCO INDIA LTD. (2016 (338) E.L. T. 113 (Tri. - Del.))
2. RAMA SHYAMA PAPERS LTD. Versus COMMISSIONER OF C. EX., LUCKNOW (2004 (168) E.L.T. 494 (Tri. - Del.))
3. KARAN TRADERS Versus JOINT COMMISSIONER OF C. EX., SALEM [2016 (339) E.L.T. 249 (Mad.)]
4. JINDAL DRUGS PVT. LTD. Versus UNION OF INDIA (2016 (340) E.L. T. 67 (P & H)) XVI. It was submitted that since the appellant is nowhere concerned with the subject goods, and the department has failed to produce any evidence to show that the impugned goods were ordered by the appellant, it cannot be presumed that the appellant has ordered for the supply of the subject goods. In the absence of contrary evidence, the appellant is not in any way involved in rendering the goods liable for confiscation. Hence, penalty is not imposable and sustainable on the appellant. Reference in this regard may be had to
17 C/50047/2023 the following decisions which are relied upon by the Appellant in support of his submissions:
1. Amba Woollen Mills vs CCE Bombay- 1998 (99) E.L.T. 353 (T) and
2. CCE v. Freight Systems (P) Ltd. - 2012 (286) E.L.T. 231 (T):
XVII. The Appellant further submitted that since he is not owner and has no title in the subject goods, penalty is not imposable on him in view of the following decisions:
1. Garima Trade Services Ltd. V. CC, Visakhapatnam - 2002 (146) E.L.T. 150
2. Nalakath Spices Trading Co. v. CC, Cochin - 2007 (213) E.L. T. 283 (T);
3. CC, New Delhi v. Sewa Ram & Bros. - 2003 (151) E.L.T. 344 (T) XVIII. It was submitted that the Respondent has arbitrarily imposed a penalty of Rs. 35,00,000/- under section 112(b)(i). It is submitted that provisions of section 112(b)(i) of the Act permit imposition of penalty on a person who acquires possession or is in any way concerned in carrying, removing etc. any goods, which the person knows or has reason to believe, are liable to confiscation under Section 111 of the Customs Act. The department has failed to bring on record any evidence which would prove and/ or establish the fact that the appellant had such knowledge and, therefore, the provision is not attracted. Neither is there any material available on record in the show cause notice to ascribe any knowledge or belief of the appellant. Therefore, penalty under section 112(b)(i) of the Act is 18 C/50047/2023 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' Thirty Five Lakhs Only). Also, the appellant runs a small jewellery shop and from it's earning he and his family members survive.
XXI. The appellant also submitted that there is no evidence that the appellant had any knowledge and hence there was no deliberate disobedience of statutory provisions. Thus, it was submitted that the imposition of penalty was illegal and violative of principles of natural justice. The appellant also relied upon on the decision of Hon'ble 19 C/50047/2023 Delhi High Court in the case of Rashmi Jain Versus Additional Director General Of Foreign Trade reported in 2015 (316) E.L.T. 389 (Del.) relying on the judgments in case of Tarak Nath Gayen and Others v. Customs, Excise and Gold (Control) Appellate Tribunal and Others - 1987 (31) E.L.T. 631 (Cal.) as well as in Hindustan Steel Ltd. v. State of Orissa - 1978 (2) E.L.T. (J159) (S.C). XXII. that the learned Respondent has gravely erred as the SCN does not allege any incriminating evidence against the appellant. Reliance is placed upon Nanda Incorporated Versus Commissioner of Customs (EOU),Chennai-IV-2017 (11) TMI 252 - CESTAT CHENNAI:
30. However, the Commissioner (Appeals) was pleased to dismiss the appeal relying on the findings of the Adjudicating Authority.
31. Being aggrieved the appellant is before this Tribunal. Learned Counsel appearing for the appellant Mr. Akash Srivastava urges as follows:
31.1 None of the statements can be relied upon due to the following reasons:
(i) Tenets of Section 138B Customs Act were not observed during Adjudication proceedings.
(ii) Karan Singh, Sohan Singh and the appellant retracted their statements of 13/14.12.2018 at the first available opportunity on 15.12.2018 when they were produced after arrest before the Court of the Learned CMM, Patiala House Courts, Delhi.
(iii) The statements of other Co-Noticees and the appellant are conflicting and therefore cannot be relied upon as seen from the following:-
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a) Karan Singh stated that the appellant's partners - Jatin, Sohan Singh, Harish and Meenu live in a rented flat in Noida provided by the appellant, for which Jatin pays rent to the landlord, but the appellant pays to Jatin. However, this defies logic because if the appellant has taken a house on rent, then he will pay directly to the landlord and not to Jatin. Furthermore, no Lease Deed has been produced 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 chats cannot be relied upon.
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e) Sohan Singh states that he is engaged in smuggling for the appellant and was invited by Karan Singh to work for the appellant. However, the appellant in his statement on 13/14.12.2018 states that he does not know Sohan Singh. Sohan Singh does not state that he was engaged by the appellant, instead he states that he was engaged by Karan Singh.This shows that their statement cannot be relied upon as there is discrepency.
f) On 13/14.12.2018, the appellant in his statement says that he went to Jewar Toll Plaza at 7.30pm to check whether the car had been seized, but the alleged CDR shows that he went there at 10.37 pm. This again shows discrepency in the statement and that the appellant did not goto check whether the car had been seized.
g) The SCN itself alleges that the appellant's stories are false. Thus, the statement cannot be relied upon.
31.2 Nothing incriminating was found during Search conducted at the appellants house or shop. Search at the appellants mother's shop (which was looked after by the appellant himself) led to recovery of 3 silver bars. 2 of the silver bars weighing 491 grams each, had the same Serial Number, were coloured in gold colour and had fake 1 KILO SWISS 995 stamped. The 3rd Silver bar was of 473.80 gms. The jewellery appraiser confirmed these 3 metal bars as totally weighing 1454.99 gms silver and having market value of Rs.59,332/-. In the appellants statement dated 15.02.2019, he stated that these silver bars were locally purchased from one person called Raju Fatte for display purpose in the shop and for making household jewellery but he did not possess Bills for the same. This shows that silver was domestically purchased in India and the fake colour, same fake Serial numbers and fake foreign marking on the two silver bars clearly show that these were for display at the shop window. Moreover, in reality, Bills/Invoices for purchase of silver were given to the Adjudicating Authority, namely Invoice No SVJ/22 dated 25.10.2018, 22 C/50047/2023 SVJ/35 dated 06.11.2018 and SVJ/36 dated 07.11.2018 from M/s Siddhi Vinayak Jewellers, 1167, 2nd Floor, Kucha Mahajani, Chandni Chowk, Delhi-110006totally amounting to 1482 gms which were then converted into the aforementioned three bars by local job workers. Also, tenets of Section 138B were not followed by the Adjudicating Authority. Thus, Section 123 Customs 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 appellant by the Department is actually registered/owned by one Prabin from Manipur. This shows that the appellant had nothing to do with the seized gold.
31.5 The diaries allegedly recovered from the Noida flat do not prove anything incriminating against the appellant because:-
a) The diaries were recovered by the Department from the flat in the absence of any of the tenants as alleged to be staying there by the Department[Seen from RUDs].
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b) There is no knowledge/proof regarding the author of those diaries.
c) Even though neither the appellant, nor Karan Singh stayed in the Noida flat, questions regarding the Diaries were posed to Karan Singh by the Department. It can be seen from his statement that Karan Singh stayed in Karol Bagh, Delhi.
d) For reasons best known to the Department, the appellant was never questioned regarding the Diaries.
e) A plain reading of the content of the Diaries will show that the appellants name is nowhere written. At best, the name of "Anchal ji" is written and not "Anshul" being name of the appellant.
f) Even otherwise, there is no mention of gold in the diaries. 31.6 The photos allegedly recovered by Forensic Analysis from the appellants phone are of dates 12.10.2018 and 07.03.2018, which is much prior to the present case booked. Further, there is nothing to show whether these are photos of gold or any other metal or item. Furthermore, as seen from the list of RUDs, no Panchnama was ever drawn before Forensic analysis of the phones, nor is there any certificate u/s 138C Customs Act. Thus, no credence can be given to electronic evidence or photos allegedly resumed from the phone. 31.7 The Department has adduced CDRs of various people who have not been made accused in this case, showing that they regularly travelled to different parts of the country like Uttar Pradesh, Bihar, Assam and West Bengal. However, this has nothing to do with the case of the appellant. There is no evidence of the appellant ever going to these places.
31.8 The phone numbers being attributed to the appellant do not belong to him since the appellants name was never found in Karan Singhs phone. The Department is alleging that the appellants name was saved as "AB" or "Ani" on the basis of a retracted statement, and no other proof.
24 C/50047/2023 31.9 There is no CDR showing the appellants conversations with the co-Noticees near 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 cross examination as envisaged under Section 138B of Customs Act, none of the statements (in absence of Cross Examination) can be relied upon, as held by the Ld CESTAT Delhi in H S Chadha vs Commissioner of Customs(Preventive) Delhi 2020 SCCOnline CESTAT 8, and further affirmed by the Hon'ble Supreme Court by its order dated 14.02.2023 in Civil Appeal Diary No 28951 of 2020. 31.13 Since there is no prescribed certificate u/s 138C of Customs Act, no electronic evidence or whatsapp chats or photos recovered from mobile phones can be relied upon, as held by the Ld CESTAT Delhi in H S Chadha vs Commissioner of Customs(Preventive) Delhi 2020 SCCOnline CESTAT 8, and further affirmed by the Hon'ble Supreme Court by its order dated 14.02.2023 in Civil Appeal Diary No 28951 of 2020.
25 C/50047/2023 31.14. Accordingly, learned Counsel prays for allowing the appeal and setting aside the penalty. It is further prayed that admittedly appellant have produced the purchase voucher of silver, showing licit purchase of the same. Further presumption on smuggling under Section 123 is not available to revenue in the matter of silver. Thus, the order of confiscation of the silver bars is bad, and accordingly, the same may be set aside with directions to return the silver bars to the appellant.
32. Opposing the appeal, learned AR for revenue Mr. Viswa Jeet Saharn inter alia reiterated the findings of the court below. He further urges that the gold was seized from Mr. Karan Singh & Mr. Sohan Singh who were travelling in the Creta car on 13.12.2018. The said persons stated that they have been engaged/employed by the appellant for carrying the gold from Purnia, Bihar to Delhi. They also stated that the said Creta car had been provided by the appellant for the purpose. The said person also stated that the expenses for making the trip have been paid by the appellant.
32.1 Further, in the statement recorded of the appellant on 14.12.2018 by the officers, he has admitted that he knows Mr. Karan Singh and also engaged him for the purpose of carrying of gold on behalf of Mr. Ramey and Mr. Thomas, who were residents of Guwahati (Assam). The appellant also admitted that the seized gold was supposed to be delivered to him at Delhi. He further stated that he was also working for the said Mr. Ramey and Mr. Thomas. He used to deliver the gold after receiving, as per the directions of Mr. Ramey or Mr. Thomas. Further urges that the plea for cross- examination does not carry much weight, when all the three accused/noticees were involved in smuggling in 26 C/50047/2023 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 appellant admitted his involvement in smuggling of gold through his employees/associates. The retraction of the statement is by way of an after thought. Further, in the facts of the present case statement of the appellant is corroborated by the statement of Mr. Karan Singh. Further both this appellant and Mr. Karan Singh have described in detail the modus operandi of gold smuggling. Mr. Karan Singh also stated that he was getting about Rs. 20,000/- per trip for carrying gold from Purnia, Bihar to Delhi. He had also stated that the appellant have provided the facility of residence at Noida and is reimbursing the rent of the flat. Further, this fact is also corroborated with diary resumed from the said flat No. 2406, Tower-4, Lotus Zinc, Sector 168, Noida, wherein the said person - Mr. Karan Singh recorded the amount is received for 27 C/50047/2023 expenses and also the expenses incurred by them. He also urged that from the call detail record and the whatsapp chat, involvement in smuggling of the appellant with the help of co-noticees and others is corroborated. Further urges that the amount of penalty imposed is commensurate and reasonable in view of the value of the gold seized and confiscated. Accordingly, he prays for dismissing of the appeal.
34. Having considered the rival contentions, I find that the whole case of revenue against this appellant is made on the basis of the retracted statements of this appellant, as well as the other co-noticees. I also find that the statements were retracted within few days at the first opportunity when the appellant (and others) was produced before the court of the magistrate. I further find that arranging of Creta car for the purpose of smuggling by this appellant, as alleged, is not established as the said car is admittedly purchased by Mr. Sohan Singh and payment for the same was made through banking channel to the seller. From the facts on record, it is not established that this appellant was paying the rent for the Noida flat, where other persons alleged to be involved in smuggling were living. Further, I find no statement have been recorded of the landlord in support of allegation of the revenue. Further admittedly gold in question does not belong to this appellant, nor he has claimed the said gold from the department. I find that revenue had not made any effort to make enquiry from the said Mr. Ramey and Mr. Thomas, who were said to be the owners of the gold in question. I further find that in view of retraction made by the appellant and other co- noticees, it was incumbent on revenue to examine the witnesses in the adjudication proceedings, as required under Section 138B of the Act. I 28 C/50047/2023 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 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. I further find that 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.
35. In view of the aforementioned findings and observations, I find that the penalty provision under Section 112(b)(i) is not attracted. Hence I allow the Appeal and set aside the Impugned Order, so far the penalty imposed on this Appellant, and confiscation of three silver bars, totally weighing 1,454.99 grams. Revenue is directed to return the silver bars. If already sold, to disburse the sale proceeds with interest from the date of sale till the 29 C/50047/2023 date of payment.
(Order pronounced in the open Court on 18.07.2023) (Anil Choudhary) Member (Judicial) sb