Custom, Excise & Service Tax Tribunal
Shri Virendra B Patel vs Ahmedabad on 12 August, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
REGIONAL BENCH - COURT NO. 03
Customs Appeal No. 10098 of 2022
[Arising out ofOIO-AHM-CUSTM-000-COM-015-016-21-22 dated 29/11/2021passed
by Commissioner of CUSTOMS-AHMEDABAD]
SHRI VIRENDRA B PATEL .....Appellant
D-20 Divine Highland Science City Road
Ahmedabad, Ahmedabad, Gujarat
VERSUS
C.C.-AHMEDABAD .....Respondent
Custom House,Near All India Radio Navrangpura,
Ahmedabad,
Gujarat
APPEARANCE:
Shri Vikas Mehta, Consultant for the Appellant
Shri. R. P Parekh, Superintendent (AR) for the Respondent
CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR
HON'BLE MEMBER (TECHNICAL), MR. RAJU
FINAL ORDER NO.A / 10974 /2022
DATE OF HEARING: 12.07.2022
DATE OF DECISION: 12.08.2022
RAMESH NAIR
This appeal is filed by the Appellant against the Order-In-Original No.
AHM-CUSTM-000-COM-015-016-21-22 dated 29.11.2021 whereby the
Commissioner of Customs, Ahmedabad imposed the penalty of Rs.
50,00,000/- under Section 112(b)(i) of the Customs Act 1962 in relation to
his role in the smuggling of Gold activity.
2. The brief facts of the case as per the department is that the officers of
Airport Intelligence Unit,Ahmedabad found that Shri JigneshSavaliya working
as Duty Officers, M/s Globe Ground India on 04.06.2019, to be behaving in a
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suspicious manner with a passenger in the Aerobridge of Bay No.32 and
found to be in possession with yellow metals. The officers conducted
personal search of Shri Jignesh Savaliya whereby it was found to him
carrying 9 brown packets in the presence of panchas under panchanama
dtd. 04.06.2019. The officers opened the packet and found the same
contained 47 gold bars. The officers seized the said gold under Seizure
memo dtd. 04.06.2019. Statement of Shri Jignesh Savaliya was recorded
wherein he stated that the said gold bars were given to him by a person
named Shri Lokesh Sharma and he was supposed to hand over the same to
Shri Rutugna Trivedi outside the Airport terminal. The officers further carried
out the investigation and the evidences in the form of statements of persons
involved in smuggling of gold, documents recovered after searches carried
out at various locations, documents recovered and retrieved from the Mobile
phones of various persons involved in smuggling of gold, data storage
devices recovered from the residence of Ms. Nita C Parmar and also the
email recovered from account of Shri Jignesh Savaliya and Shri
JitendraRokad reveal that a Gold smuggling racket was orchestrated and
operated by Shri Rutunga Trivedi, his wife Smt. Hina Rutunga Trivedi and
their employee and key associate Ms. Nita C Parmar. This smuggling activity
was aided by Shri Jignesh Savaliya, Asst. Duty Officer of M/s Global Ground
India Pvt. Ltd., ground handling agency working at Sardar Vallabhbhai Patel
International Airport, Ahmedabad, in as much as he received the gold from
these carriers and brought them outside the airport by exiting from the
cargo gates. It further emerges from the evidences that this smuggling
racket was actively financed by Shri Jitendra Rokad, Mehul Bhimani, Raju
Goswami, Vipul Joshi and Lalit Jain.
2.1 The smuggling of gold from Dubai to India was carried out with intent
not to pay Customs Duty using the persons as carriers. Upon arrival at SVPI
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Airport, Ahmedabad the gold carried by the carriers sent by Shri Rutugna
Trivedi was handed over to Shri Jignesh Savaliya, either in the Aerobridge or
in the ramp area of the airport. Shri Jignesh Savaliya had been concealing
the gold in the dress worn by him and smuggled the same into India by
exiting SVPI Airport, Ahmedabad. Shri Jignesh Savaliya has handed over the
smuggled gold to Shri Rutugna Trivedi or the specific person sent by Shri
Rutugna Trivedi and informed to Shri Jignesh Savaliya. Adopting the above
modus operandi, Shri Rutugna Trivedi and his associates smuggled into
India 4886.206 Kgs. Gold during the period from 07.03.2013 to 26.05.2019.
The authenticity of the details of the gold smuggled into India by various
carriers sent by Shri Rutugna Trivedi has also been corroborated by the
travel details provided by the travel agent through whom the tickets were
purchased for the carriers on the instruction of Shri Rutugna Trivedi & Ms.
Nita C. Parmar and the dates of arrival of the carriers in India at SVPI
Airport, Ahmedabad. The details recorded in the diary of Shri Jignesh
Savaliya as well as in the WeChat messages recovered from his mobile
phone were verified with the actual arrival dates of the persons as available
in records of Airport and found to be correct.
2.2 With this background, show cause notices were issued proposing
confiscation of the seized goods under Sections 111(d), 111(i), 111(I) and
111(m) of the Customs Act, 1962 and demanding customs duty and
imposition of penalty under Section 112(a) & 112 (b) and Section 114A &
Section 114AA read with Section 123 of the of the Customs Act. Appellant
was also issued show cause notice whereby it was alleged that the Appellant
had also dealt with smuggled gold. Thus it appears that Appellant had
knowingly involved in smuggling of gold into India which he had reasons to
believe the smuggled gold is liable to confiscation under Section 111 of the
Customs Act, 1962. After following due process, the adjudicating authority
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vide impugned order dated 29-11-2021 confirmed the charges and demands
proposed in Show Cause Notice. He imposed the penalty of Rs. 50,00,000/-
under Section 112(b)(i) of the Customs Act 1962 on the appellant. Being
aggrieved, the appellant preferred appeal before this Tribunal.
3. The Learned Consultant Shri Vikas Mehta appearing on behalf of
Appellant submits that impugned order has travelled beyond the scope of
show cause notice as there is no allegation against the appellant that he had
dispatched any gold-smuggled or otherwise through any angadia firm.
Hence, imposition of penalty upon Appellant on this ground alone is not
tenable in the eyes of law. In the show cause notice neither name nor role
related to gold smuggling activity is explained and hence it is established
that appellant is nowhere connected with the offence covered by the
impugned notice.
3.1 He submits that Ld. Adjudicating authority, while holding that the
Appellant was used to buy gold from M/s. Akhandjyot LLP has nowhere held
that such gold was unaccounted or smuggled. There is also no such
allegation in the show cause notice. Hence, in the absence of any allegation
that M/s Jyot Jewellers, proprietorship firm of Appellant had purchased
smuggled/unaccounted gold from M/s Akhandjyot Jewels LLP, partnership
firm of Shri Rutugna Trivedi, therefore the imposition of penalty on Appellant
under Section 112(b)(i) of Customs Act, 1962 is not tenable in the eyes of
law. Moreover, there is no allegation that entire quantity of gold sold by M/s
Akhandjyot Jewels LLP to M/s Jyot Jewellers is liable for confiscation under
Section 111 of Customs Act, 1962. Therefore, on this ground also, penalty
imposed on appellant under Section 112(b)(i) of Customs Act, 1962 cannot
be sustained.
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3.2 He further submits that Appellant made repeated request for
Ms.Bhundia's cross -examination. However Ld. Adjudicating Authority has
rejected the request for cross examination of Ms.DivyaBhundia and has
imposed penalty on the Appellant on a completely different ground than the
allegation contained in the show cause notice.
4. Shri R.P Parekh, Superintendent (AR) appearing on behalf of the
Revenue reiterates the findings of the impugned order.
5. We have carefully considered the submissions made by both sides and
perused the record. To examine the above issues, it would be appropriate to
extract Section 112 of the Customs Act, 1962 which reads as under :-
"112. Penalty for improper importation of
goods, etc. - Any person, -
(a) who, in relation to any goods, does or omits to do any
act which act or omission would render such goods liable
to confiscation under section 111, or abets the doing or
omission of such an act, or
(b) who acquires possession of or is 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 knows or
has reason to believe are liable to confiscation under
section 111,
shall be liable, -
(i) in the case of goods in respect of which any
prohibition is in force under this Act or any other law for
the time being in force, to a penalty not exceeding the
value of the goods or five thousand rupees, whichever is
the greater;
(ii) in the case of dutiable goods, other than prohibited
goods, to a penalty not exceeding the duty sought to be
evaded on such goods or five thousand rupees,
whichever is greater;
(iii) in the case of goods in respect of which the
value stated in the entry made under this Act or in the
case of baggage, in the declaration made under section
77 (in either case hereinafter in this section referred to
as the declared value) is higher than the value thereof,
to a penalty not exceeding the difference between the
declared value and the value thereof or five thousand
rupees, whichever is the greater;
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(iv) in the case of goods falling both under clauses
(i) and (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;
(v) in the case of goods falling both under clauses (ii) and
(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."
From the perusal of above provision, it will be seen that for imposition of
penalty on a person under Section 112(b), the following conditions must be
satisfied.
(i) The person must have acquired possession of or must be in any way
concerned in carrying, removing, depositing, harbouring, keeping,
concealing, selling or purchasing or in any other manner dealing with any
goods which are liable for confiscation under Section 111 of Customs Act,
1962.
(ii) The person must have knowledge or have reason to believe that the
goods acquired by him or dealt with by him in the manner as mentioned
above, are liable for confiscation under Section 111 i.e. he has knowledge or
has reason to believe that any one or more of the contraventions mentioned
in Clause (a) to (p) of Section 111 have been committed in respect of the
imported goods acquired or dealt with by him. For imposition of penalty
under Section 112(b) of Customs Act, 1962, it is also necessary to prove
that the person had knowledge or had reason to believe that the goods
acquired or dealt with by him are liable for confiscation under Section 111.
5.1 We find that as regard the role of Appellant Ld. Commissioner in
impugned order observed as under:
" It has been contended that in his statement dtd.
13.08.2019, he has stated that his firm M/s Jyoti
Jewellers mostly used to sell gold to M/s Akhandjyot
Jewels LLP and he had never arranged any buyers or
angadia/courier to sell gold from Shri
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RutugnaArvindkumarTrived or his associates. However,
the Noticee seeks to highlighting only a partial part of his
statement. In his statement he has stated that at times
they used to buy gold from M/s Akhandjyot Jewels LLP
and this part of his statement has not been highlighting
by the Noticee. In other words, the arguments are
advanced on the basis of half-truth and as such not
acceptable on merits. He has also sought for the cross -
examination of Ms.Divya Kishore Bhundia. The discussion
regarding the request for cross-examination, as made at
paras 119.25.1 to 119.25.4 hereinabove, are equally
applicable to Noticee No. 22 and for the said reasons the
request merits rejection.
Noticee No. 22 has not brought any cogent evidence on
record to establish his innocence. He is expected to come
up with clean hands and present his arguments with
cogent evidence as discussed at para 135.3 hereinabove
which he has failed to do so. In such circumstance, the
arguments are to be summarily thrown out as discussed
at para 135.3 hereinabove. Accordingly, I find that
Noticee No. 22 has abetted in the activity of smuggling of
gold by dispatching the same through angadia firm and
therefore has rendered himself liable to penalty in terms
of the provisions of Section 112(b)(i) of the Customs Act,
1962.
5.2 We find that role of the Appellant in the whole episode has been
derived only from the statement of Ms. DivyaKishorBhundia only Statement
of said person remained uncorroborated during the investigation. As per the
department Shri Rutugna being the mastermind of the smuggling racket,
however during the investigation Shri Rutugna has nowhere stated the name
of Appellant as connected to his alleged activity of smuggling of gold. He
nowhere stated that Appellant has involved in purchase and sales of
smuggled gold. We have also gone through the statements of other persons
who allegedly involved in smuggling gold activity. Upon perusal of these
statements we nowhere found that the Appellant had knowledge about the
said alleged smuggling of gold activity. The department except the
statement of Ms.Divya Kishore Bhundia nowhere produce any evidences to
show that Appellant was involved in smuggling gold activity. We also
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reproduced the relevant paras of the Appellant's statement dated
13.08.2019 as under: -
" On being asked I state that I know Mr.Rutugna Trivedi,
since over four to five years, from the time M/s. Akhandjyot
Jewels LLP was established. M/s Jyoti Jewellers used to sell
Silver and gold to M/s. Akhandjyot Jewels LLP and at times
used to buy gold or sliver as per market convenience. During
this period I used to talk with Ms. Nita Parmar and Ms.Jagruti
Patel. Ms Jagruti Patel used to guide me with the government
work related to M/s. Lavanya Jewels. I shall submit the
ledger account in respect of M/s. Akhandjyot Jewels LLP for
the year 2014 to 2019 till date.
On being asked I state that in connection my dealing with Mr
Rutugna Trivedi, I have dealt and interacted with Mrs Hina
Trivedi, Ms. Nita Parmar and Ms.Jagruti Patel. I have not
dealt with any other person in M/s Akhandjyot Jewels LLP or
anyone associated with Mr.Rutugna Trivedi.
On being asked whether I have dealt with in any manner for
the sale or purchase of Gold by/from Mr.Rutugna Trivedi or
his associates I state that I have not purchased any Gold or
dealt with any gold on a direct basis with any person of
Rutugna Trivedi or Rutugna Trivedi himself, the Gold was
mostly sold by me to Mr.Rutugna Trivedi's firm M/s
Akhandjyot Jewels LLP and at times have purchased from the
said M/s Akhandjyot Jewels LLP as per market convenience. I
state that I have never arranged any buyers or have
arranged for any angadia/ courier for the same of Gold from
Mr.Rutugna Trivedi or his associates. Further, on being asked
I state that I have sold gold to one M/s S.P.N. Mumbai other
than the said firm I have not sold gold to any person or firm
in Mumbai.
On being asked regarding the purchase documents of the
Silver Bars as mentioned in Panchanamadtd. 08.08.2019 I
state that I am submitting the Purchase and sales ledger for
the period 2015-16, 2016-17, 2017-18 and 2018-19, also I
am submitting the documents received from M/s RBL Bank
and M/s Brinks India Ltd., in support of the purchase of two
silver bars as mentioned under the panchanama.
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5.3 The above facts stated by the Appellant in their statement nowhere
disputed by the department. From the evidence available on record and
statement of Appellant it is clear that he never dealt with the alleged
smuggled gold. From the above statement of Appellant it also cleat that he
had not confessed in his statement that he had knowledge about alleged
activity of smuggled Gold. The Appellant had nowhere stated that he dealt
with the alleged smuggled Gold. During the investigation officers did not
find any documents/ piece of paper or any other evidence against the
Appellant to show that the Appellant was involved in purchase or sale of
smuggling of gold. Clearly, the Appellant did not have knowledge of alleged
smuggling activity.
5.4 In spite of this, the Department has not taken any steps to confirm
with Shri Rutugna whether the Appellant also involved with him. The
evidence on record is not sufficient to hold that the appellant was involved in
alleged activity of smuggling of gold. In the impugned matter we also find
that Ld. Commissioner only on the basis of statement of Ms.Divya Kishore
Bhundia who is also co-noticee in the present case concluded that Appellant
has dealt with smuggled Gold. It is well settled law that the statements of
the co-noticee cannot be adopted as a legal evidence to penalize the accused
unless the same are corroborated in material particulars by independent
evidence. The statement of co-accused cannot be relied upon, particularly
when appellant has denied his involvement in respect of the goods in
question. In this connection, the following judgments are relevant and they
fortify the views expreseed by us :
Punam Chand Bhotrav. Collector of Customs - 1993 (63) E.L.T.
237.
Jai NarainVerma v. Collector of Customs, New Delhi - 1995 (76)
E.L.T. 421.
Jaswinder Singh v. Collector of Customs, New Delhi - 1996 (83)
E.L.T. 175.
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Mahabir Prasad v. Commissioner of Cus. (Prev.), I.N.B., Patna -
2000 (126) E.L.T. 803.
Pradeep Shah Vs. Commissioner of Customs, Patna -2006 (197)
E.L.T. 301 (Tri. - Kolkata)
Vikram Singh DahiyaVs. Comm. Of Cus.(Export), New Delhi -
2008 (223)ELT 619 (Tri. Del.)
Surinder Kumar Khanna Vs. Intelligence Officer, DRI- 2018(362)
ELT 935 (SC)
Habib UzZamanVs. Commissioner of Customs, New Delhi -
2021(376) ELT 666 (Tri. Del.)
K.K. Jain Vs. Commissioner of Customs, Kandla - 2009(235)ELT
170 (Tri. Ahmd.)
5.5 We further find that in the present case appellant requested for the
cross -examination of Ms. DivyaKishorBhundia and she was not examined in
the adjudication proceedings and as such her statements are not
admissible, as evidence under the provisions of Section138B of Customs Act,
which provides that - if an authority in any proceedings under the Act wants
to rely upon the statement of any person (made during enquiry), such
person is required to be examined as witness and if the adjudicating
authority finds the evidence of the witness 'admissible', then such witness
should be offered for cross-examination and only thereafter the evidence is
admissible. In absence of compliance with the provision of Section138B of
the Act, the statements are not admissible as evidence and accordingly, the
case of revenue against the appellant does not stand. We further find that
the appellant have categorically denied their connection with the alleged
activity of smuggling of gold and in absence of any corroborative evidence
the imposition of penalty on them is bad and liable to be set aside.
5.6 We also find that there is absolutely no evidence on record connecting
the appellant with the commission of any offence in relation to the alleged
gold smuggling activity. Merely because the Appellant is engaged in the
business of Gold and Silver, that would not ipso facto make the appellant in
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any way privy to the commission of any offence with reference to the alleged
gold smuggling activity. We are of the view that it will be unfair to fasten the
appellant with penal consequences merely on the basis of a statement of
third party only. Moreover we also observed that during the investigation
statements of Ms. Nita Parmar, Shri MehulBhimani, Shri JitendraRokad and
Shri Rutugna Trivedi were recorded whereby they did not say that the
Appellant was also involved in alleged activity of gold smuggling or Appellant
had knowledge about smuggling of gold into India.
From the above-reproduced section it can be seen that penalties can be
imposed only if the individuals were in knowledge of the act of smuggling.
Further, for imposition of penalty under Section 112(b) of the Customs Act,
1962 the knowledge on the part of the person has to be established. In the
present matter department failed to do so. During the investigation officers
did not find any documents/ piece of paper or any other evidence against
the Appellant to show that the Appellant had dealt with the smuggled gold.
Facts borne on record reveal that the appellant has maintained all along that
he never had the possession of the impugned goods nor was in any way concerned with the carrying, removing, etc., of the consignments in question and hence, it was beyond his comprehension that the goods in question were per se liable for confiscation under Section 111(d) ibid. It is nowhere on record that the appellant, in his capacity, was knowingly involved in alleged activity of smuggling gold. Section embodies the phrase "...which he knows or has reason to believe are liable to confiscation under Section
111..." which is of specific importance in this situation. Revenue has nowhere ascertained as to the knowledge of the appellant whether he knew or had reason to believe that the goods in question were liable for confiscation. Undisputed peculiar facts of the case are that the appellant is neither the importer nor the owner who had acquired possession nor in any 12 C/10098/2022 way concerned with the carrying, removing, etc., of the goods in question, and Revenue has nowhere ascribed knowledge of the appellant as to the smuggled gold being liable for confiscation.
5.7 Penalty under Section 112(b) can be imposed when a person acquires possession of or is 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 knows or has reason to believe are liable to confiscation under section 111. It is submitted that it is not the case of the Revenue that the Noticee was indulged in any of the activities as mentioned under Section 112(b) of the Customs Act. As the Appellant did not acquire possession of or in any way concern with import of gold, penalty under Section 112(b) ought not to have been imposed.
5.8 Section 112(b) of the Customs Act is identical to earlier Rule 209A of the Central Excise Rules, 1944 and Rule 26 of Central Excise Rules, 2002. Relevant extracts of the provisions of Customs Act, 1962 Central Excise Rules, 1944 and Central Excise Rule, 2002 are reproduced hereunder:-
"Section 112 Penalty for improper importation of goods etc.
(a) ****
(b) who acquires possession of or is 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 knows or has reason to believe are liable to confiscation under Section 111 shall be liable -
Rule 209A of the Central Excise Rules, 1944:
"Rule 209A. Penalty for certain offences. -
Any person who acquires possession of, or is 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 five thousand rupees, whichever is greater."13
C/10098/2022 Rule 26 of the Central Excise Rules, 2002 Rule 26 came to enacted which came in force with effect from 1st March, 2007. Rule 26 reads as under :
"Rule 26. Penalty for certain offences. - (1) 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 the duty on such goods or two thousand rupees, whichever is greater.
(2) Any person, who issues -
(i) an excise duty invoice without delivery of the goods specified therein or abets in making such invoice; or
(ii) any other document or abets in making such document, on the basis of which the user of said invoice or document is likely to take or has taken any ineligible benefit under the Act or the rules made thereunder like claiming of Cenvat credit under the Cenvat Credit Rules, 2004 or refund, shall be liable to a penalty not exceeding the amount of such benefit or five thousand rupees, whichever is greater."
The Hon'ble Bombay High Court in the case of Commissioner of Central Excise Vs. Rakesh Kumar Rajendra Kumar & Co. - 2015 (325) ELT 506while interpreting Rule 209A held as under:
"The sine qua non for a penalty on any person under the above rule is :
either he has acquired 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 assessee is only issuing invoices wherein there is no movement of the goods, they cannot be visited with penalty under Rule 209A."
5.9 The Larger Bench of the Tribunal in the case of Steel Tubes of India Ltd. Vs. Commissioner of Central Excise - 2007 (216) ELT 506, 14 C/10098/2022 after referring to the decision of the Hon'ble Bombay High Court in the case of Jayantilal Thakkar and Co - 2006 (195) ELT 9 (Bom.) held that for imposition of penalty under Rule 209A of the Central Excise Rules, 1944, the person must have dealt with excisable goods with knowledge that they are liable for confiscation. 5.10 Similarly, in the case of R.C. Jain Vs. Commissioner of Central Excise and Service Tax - 2016 (334) ELT 115, the Hon'ble Tribunal held that penalty under Section 112(b) of the Customs Act cannot be imposed if the assesse has not dealt with or transported goods physically in any manner.
5.11 The Tribunal in the case of D. AnkneeduChowdhry Vs. Commissioner of Customs - 2004 (178) ELT 578held that "in any other manner dealing with' used in Section 112(b) of the Customs Act has to be read ejusdem generis with the preceding expression in the clause viz. carrying, removal or depositing etc. It is held that accordingly to the above doctrine, meaning of expression "in any other manner of dealing with" should be understood in sense similar or comparable to how preceding words viz. carrying, removing, depositing etc. are understood. In other words, "in any other manner dealing with" of the goods is also to some physical manner of dealing with the goods. In absence of the finding in the impugned order that the assesse has dealt with the goods physically or any allegation to this effect raised in the proceeding, penalty under Section 112(b) cannot be imposed.
5.12 We also find that the appellant cannot come within the ambit of Section 112(b) because appellants had never acquired possession or in any way concerned in any of the activities mentioned in the Section or any measure dealing with any goods which the appellants knew or had reason to 15 C/10098/2022 believe are liable to confiscation. In the absence of the department having proved the knowledge of the appellant in the activities relating to the smuggled gold, there were no grounds for imposition of penalty on him.It is now well established that mensrea is an important ingredient for imposing a penalty on the persons enumerated in Section112(b) of the Customs Act. The evidence brought out by the department nowhere suggests that the appellant was aware that the goods in question were smuggled into the India. The penalty imposed on Appellant, therefore, cannot be sustained.
6. As per our above discussion and finding, we are of the considered view that the appellant is not liable for imposition of penalty under Section 112(b) of the Customs Act, 1962. Therefore, we set aside the penalty and allow the appeal with consequential relief.
(Pronounced in the open court on 12.08.2022) (RAMESH NAIR) MEMBER (JUDICIAL) (RAJU) MEMBER (TECHNICAL) PALAK