Gold Smuggling: CESTAT quashes Penalties u/s 112(b)(ii) of Customs Act for want of Evidence [Read Order]

The two member bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ), Kolkata, quashed penalties under Section 112(b)(ii) of the Customs Act, 1962 in a gold smuggling case due to a lack of evidence. The assessee R.K. Swami Singh was traveling in a van, he was intercepted by the Officers of Imphal Customs. On examination and personal search of his body, the Officers found in his possession 12 pieces of gold biscuits, totaling weighing 2002.26 grams approximately. As the appellant was not having any document for the licit importation of the same, the gold was seized under Section 110(1) of the Customs Act, 1962 under the ‘reasonable belief’ that the said gold was smuggled into India without payment of Customs Duty. A Statement dated 20.06.2014 was recorded from the assessee wherein he stated that the gold was handed over to him by one Shri Ramaswami at Moreh Bazar on 20.06.2014 at 07:00 hrs, for the purpose of transporting the same from Moreh to Guwahati; he was promised to pay an amount of Rs.12,000/- as carrier charges; he has no documents in possession to prove legal procurement of the gold biscuits. The assessee was arrested under Section 104 of the Customs Act, 1962 and produced before the Chief Judicial Magistrate, Imphal on 21.06.2014 and he remained in judicial custody till 05.07.2014. Subsequent to his arrest, another Statement dated 21.06.2014 was recorded wherein the appellant stated that he did not know the residential address of Ramaswami whom he met at Moreh Bazar to collect the gold biscuits. He remained in judicial custody till 05.07.2014. Subsequent to his arrest, another Statement dated 21.06.2014 was recorded wherein the appellant stated that he did not know the residential address of Shri Ramaswami whom he met at Moreh Bazar to collect the gold biscuits. A Show Cause Notice dated 14.11.2014 was issued to the appellant proposing to confiscate the gold under Section 111(b) and (d) of the Customs Act; penalty was also proposed under Section 112(b)(ii) of the Act. Mr. Sourabh Chakravorty representing the revenue submitted that the gold was recovered from the physical possession of the appellant concealed in the waistline of the jeans trousers worn by him; at the time of seizure of the gold, the appellant was not having any valid document in his possession for legal importation of the gold; no licit document could be produced by the appellant in support of legal acquisition, possession and carrying of the gold biscuits on 20.06.2014. The bench observed that the assessee was carrying the gold at the time of interception by the Officers on 20.06.2014. The appellant was not having any document in his possession at the time of interception by the officers for the licit purchase of the gold. In his initial statement dated 20.06.2014, the assessee had stated that the said gold was handed over to him by one Shri Ramaswami for transporting the same from Moreh to Guwahati. However, later at the time of personal hearing on 31.07.2015, the appellant retracted the statement and contended that it was not given voluntarily. Further observed that in the impugned order, the Commissioner (Appeals) has upheld the confiscation of the gold on the ground that the appellant could not produce any valid document in support of acquisition, possession or transportation of the gold. Thus, the officers have the 'reasonable belief' that the said gold biscuits were of foreign origin and illegally imported into India and hence the gold in question was confiscated. The evidence available on record is not sufficient to have the 'reasonable belief' that the gold bars/pieces were smuggled into India without payment of customs duty. Accordingly, the smuggled nature of the gold bars is not established. Penalties imposed on the appellant under Section 112(b) (ii) of the Customs Act, 1962 was not sustainable. CESTAT set aside the impugned order and allow the appeal filed by the assessee. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates