Custom, Excise & Service Tax Tribunal
Principal Of Commissioner Of Customs ... vs Smt. Sapana Vishal Gaikwad, (Legal Heir ... on 25 February, 2026
1 Appeal Nos. C/30551 &
30552/2024
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
HYDERABAD
REGIONAL BENCH - COURT NO. - I
Customs Appeal No. 30551 of 2024
(Arising out of Order-in-Appeal No. VIZ-CUSTM-000-APP-192 & 193-24-25 dated
11.07.2024 passed by Commissioner of Central Excise & Customs (Appeals),
Visakhapatnam)
Pr. Commissioner of Customs .. APPELLANT
Visakhapatnam - Customs
Custom House,
Port Area,
Visakhapatnam,
Andhra Pradesh - 530 001.
VERSUS
Shri Prashant Ramchandra Zende .. RESPONDENT
Balawadi Post, Taluka-Khanapur, Sangli District, Maharashtra - 415 307.
AND Customs Appeal No. 30552 of 2024 (Arising out of Order-in-Appeal No.VIZ-CUSTM-000-APP-192 & 193-24-25 dated 11.07.2024 passed by Commissioner of Central Excise & Customs (Appeals), Visakhapatnam) Pr. Commissioner of Customs .. APPELLANT Visakhapatnam - Customs Custom House, Port Area, Visakhapatnam, Andhra Pradesh - 530 001.
VERSUS
Smt. Sapana Vishal Gaikwad, .. RESPONDENT
(Legal heir of Late Mr. Vishal
Rajaram Gaikwad)
D.No.48-10-34/2,
SVT Road,
Srinagar,
Visakhapatnam,
Andhra Pradesh - 530 016.
APPEARANCE:
Shri K. Raji Reddy, Authorized Representative for the Appellant. Shri Rajnish Kumar Kalawatia, Advocate for the Respondent. CORAM: HON'BLE Mr. A.K. JYOTISHI, MEMBER (TECHNICAL) HON'BLE Mr. ANGAD PRASAD, MEMBER (JUDICIAL) 2 Appeal Nos. C/30551 & 30552/2024 FINAL ORDER No. A/30101-30102/2026 Date of Hearing: 03.11.2025 Date of Decision: 25.02.2026 [ORDER PER: ANGAD PRASAD] The present appeals has been filed by the Department against the Order-in-Appeal No. VIZ-CUSTM-000-APP 95&96-2024-25 dated 11.07.2024 passed by Commissioner (Appeals), whereby, the adjudication orders passed the Original Authority were set aside in favour of respondent.
2. Facts in brief, the DRI officers, Visakhapatnam received specific intelligence on gold smuggling of Bangladesh origin through a passenger namely Shri Prashant Ramachandra Zende travelling in Shalimar- Secunderabad AC Superfast Express. The officers found the passenger alighting at Visakhapatnam Station with gold on 05.01.2023. The officers found that Shri Prashant Ramachandra Zende was approached by Shri Vishal Rajaram Gaikwad (presently deceased) and intercepted Shri Prashant Ramachandra Zende on Platform No.4 of the Visakhapatnam, Railway Station. The DRI officers in the presence of panch witnesses questioned Shri Prashant Ramachandra Zende whether he was carrying any smuggled gold. He reluctantly admitted before the officers that he was carrying gold kept in a tailor made cloth pocket on inner side of his trousers. He also informs that he was smuggling gold for Shri Vishal Rajaram Gaikwad. The officers took the accused to the DRI office in Visakhapatnam and on opening the pockets in the presence of the witnesses found 4 wide yellow metal pieces of different sizes and 19 stick type pieces of yellow metal of different sizes. The total 23 pieces of metal was found by the Gold assayer to be of weight 3 Appeal Nos. C/30551 & 30552/2024 1860.5 grams with a value of Rs. 1,07,16,480/-. The officers seized the said 23 gold pieces under Section 111 of the Customs Act, 1962 and also seized the packing material under Section 119 of the Customs Act.
3. The officers recorded statement under Section 108 of the Customs Act, 1962. Shri Prashant Ramachandra Zende stated that he was an employee working in Bhavani Gold shop, Visakhapatnam belonging to Shri Vishal Rajaram Gaikwad and he went to Kolkata along with cash of Rs. 12 lakhs given by his employer and handed over the same to Shri Sagar Gaikwad at Kolkata and received the gold from the Shri Sagar Gaikwad. The DRI officers also recorded statement of Shri Vishal Rajaram Gaikwad who stated that he was in business from June 2022 onward and admitted the facts narrated by his employee and also stated that he paid Rs. 80 lakhs in cash earlier to Shri Sagar Gaikwad, his cousin with regard to bringing gold from Kolkata.
4. During search conducted on 05.01.2023 the premises of shop Bhavani Gold in the presence of Shri Anil Rajaram Gaikwad (brother of the deceased Gaikwad), the officers seized graphite ingot metal casting mould that was capable of making gold biscuits with markings "MMTC 100g Gold 99.9.0". The statement was recorded and it was found that no any record was maintained for sale of gold in his shop.
5. The DRI officers issued Show Cause Notice dated 30.06.2023 proposing to confiscate the gold apart from the proposal to impose penalty on the carrier of smuggled gold Shri Prashant and on the late Shri Gaikwad.
6. The Adjudicating Authority / Additional Commissioner of Customs, Visakhapatnam vide Order-in-Original No.22/2023-24 dated 20.02.2024, after hearing the notices, ordered for absolute confiscation of gold under 4 Appeal Nos. C/30551 & 30552/2024 Section 111(d) of Customs Act, 1962 and also confiscated packing material and ingot metal casting mould. Learned Adjudicating Authority imposed a penalty of Rs. 10,07,000/- each on Shri Prashant Ramachandra Zende and Shri Vishal Rajaram Gaikwad (deceased) under Section 112(a) and 112(b) of the Customs Act.
7. Respondent Shri Prashant Ramachandra Zende and legal heir of deceased Vishal Rajaram Gaikwad Smt. Sapana Vishal Gaikwad has filed appeals before the Commissioner (Appeals), Guntur, the Commissioner (Appeals), allowed their appeals and set aside the order passed by the Adjudicating Authority.
8. The order of the Commissioner (Appeals), was reviewed by the Committee of Commissioners under Section 129(2) of the Customs Act, 1962 and found that the Commissioner (Appeals), allowed the appeals without ascertaining the facts whether the impugned gold was of foreign origin or of indigenous. The respondents did not discharge burden of proof as requires by Section 123 of the Customs Act. The Department was denied personal hearing by not providing link online to join virtual hearing, though personal hearing intimation was given proper opportunity of being heard was not provided. The principles of natural justice were violated due to denial of proper opportunity of hearing and therefore, decided to file appeal before this Tribunal.
9. Learned AR submits that the Commissioner (Appeals), failed to appreciate that the impugned gold was smuggled into India in an illicit manner. The carrier and the owner were arrested based on the statements recorded admitting the smuggled nature of gold. The statement given by 5 Appeal Nos. C/30551 & 30552/2024 carrier and the owner were never retracted as stated by Learned Commissioner (Appeals), the respondents has failed to prove their onus under Section 123 of the Customs Act. The source of seized & gold belated submissions of voucher after the Show Cause Notice was issued, raises serious doubts about its genuineness. Respondents has failed to give any explanation about recovering of mould making gold biscuits with markings "MMTC 100g Gold 99.9.0".
10. The Learned Counsel for the respondent supported the impugned order and submitted that the appeals were rightly allowed by the Commissioner (Appeals).
11. We have carefully considered the submissions made by both parties and perused the record.
12. The facts and grounds of both appeals are common and against same OIA, therefore, we heard both the appeals simultaneously to decide together.
13. Learned Commissioner (Appeals), has mentioned about personal hearing in para 14 of his order that "letters were sent to the appellants and the Department both for the personal hearing but no representative from the Department side appeared. The representative of the Department could present their side by appearing". It appears from the impugned order that no one was present at the time of final hearing from the Department side. The Department has said that no online link was provided to join virtual hearing without providing link to join the hearing was meaningless. Therefore, the decision taken by Learned Commissioner (Appeals), without facilitating proper opportunity to the Department is gross violation of principles of 6 Appeal Nos. C/30551 & 30552/2024 natural justice, the fundamental principle is that the other side must be heard. It is a settled position of law that no order has been civil consequence can be passed without affording a reasonable opportunity of being heard to the affected party, in as much as the principle of natural justice, namely audi alteran partem, mandates that the other side must be heard before any adverse decision is taken.
14. Section 128 (1-A) of the Customs Act provides that the Commissioner (Appeals), if sufficient cause is shown, at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing. This provision clearly indicates that this right is vested not only to private party but equally to the Department.
15. Section 128-A the Customs Act, 1962, provides procedure in appeal before Learned Commissioner (Appeals), Commissioner have power that an order or decision has been passed without following the principles of natural justice, may refer the matter back for fresh adjudication or decision. It means that following of principles of natural justice is necessary at the stage of adjudication. It cannot be construed the principles required to be followed by the Adjudication Authority are not equally applicable on the Appellant Authority.
16. Hon'ble Supreme Court in the case of Siemens Engineering and Manufacturing Company of India Ltd., Vs Union of India [1976 AIR 1785 (SC)], wherein, held that "It is essential that Administrative Authorities and Tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in 7 Appeal Nos. C/30551 & 30552/2024 support of the orders made by them. The Rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this Rule must be observed in its proper spirit and mere pretence of compliance with it would not be satisfy the requirement of law."
17. Hon'ble Supreme Court in the case of East India Commercial Co. Ltd., Calcutta Vs Collector of Customs, Calcutta [1962 (5) TMI 23 (SC)], wherein, Hon'ble Supreme Court held that Customs Authorities exercises quasi-judicial functions and must be adhere to principle of natural justice.
18. The Hon'ble Supreme Court in the case of Government of India Vs Madras Rubber Factory Ltd., [1995 (5) TMI 28 (SC)], wherein, held that the principles of fairness are implicit in every adjudication under fiscal laws.
19. Hon'ble Supreme Court in the case of CCE Vs ITC Ltd., [2004 (171) ELT 433 (SC)], held that violation of principles of natural justice itself is sufficient ground to set aside the order, without going into the merits of the case.
20. In view of the above legal position, we have the considered that the impugned order passed by the Commissioner (Appeals), suffers from gross violation of principles of natural justice, as the Department was denied by opportunity of hearing which is very important for any adjudication.
21. Accordingly, the impugned order is set aside and matter is remanded to the Commissioner (Appeals), with a direction to decide the appeals De novo, after providing due opportunity of hearing to both sides, in accordance with law.
8 Appeal Nos. C/30551 &30552/2024
22. The appeals filed by the Department are allowed by way of remand.
(Pronounced in the open court on_25.02.2026__) (A.K. JYOTISHI) MEMBER (TECHNICAL) (ANGAD PRASAD) MEMBER (JUDICIAL) Shirisha