Vipul Joshi Vs C.C.-Ahmedabad (CESTAT Ahmedabad)
CESTAT Ahmedabad held that direct participation and knowledge on the part of the person has to be established. In absence of sufficient evidence, penalty u/s 112(b) of the Customs Act, 1962 cannot be levied.
Facts-
Post search by the officers of Airport Intelligence Unit, Ahmedabad it was argued that there was smuggling of gold from Dubai to India with intent not to pay Customs Duty. Accordingly, 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 financed to Shri Rutugna Trivedi, which was used by him to procure Gold in Dubai and to smuggle the same into India. Thus it appears that Appellant was knowingly involved in smuggling of gold into India which he had reasons to believe the smuggle under Section 111 of the Customs Act, 1962. After following due process, the adjudicating authority vide impugned order dated 29-11-2021 confirmed the charges and demands proposed in Show Cause Notice. He imposed the penalty of Rs. 2,28,00,000/- under Section 112(b)(i) of the Customs Act 1962 on the appellant. Being aggrieved, the appellants preferred appeal before this Tribunal.
Conclusion-
Held that in the present case the activity of financing of a fund has been turned by the Ld. Commissioner into direct participation in the conspiracy to smuggle gold. For imposition of penalty under Section 112(b) of the Customs Act, 1962 the knowledge on 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 from the premises of Appellant to show that the Appellant financed money for smuggling of gold into India.
From the section 112(b) 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 of offence on part of the person has to be established. In the present matter department failed to do so.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
This appeal isfiled 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. 2,28,00,000/- under Section 112(b)(i) of the Customs Act 1962 in relation to his role in the alleged 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 Officer, M/s Globe Ground India on 04.06.2019, to be behaving in a 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 dated 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 Jitendra Rokad reveal that a Gold smuggling racket was orchestrated and operated by Shri Rutunga Trivedi, his wife Smt. Hina Rutunga Trivediand 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 (SVPI) 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 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 and was handed over by him 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 financed to Shri Rutugna Trivedi, which was used by him to procure Gold in Dubai and to smuggle the same into India. Thus it appears that Appellant was knowingly involved in smuggling of gold into India which he had reasons to believe the smuggle under Section 111 of the Customs Act, 1962. After following due process, the adjudicating authority vide impugned order dated 29-11-2021confirmed the charges and demands proposed in Show Cause Notice. He imposed the penalty of Rs. 2,28,00,000/- under Section 112(b)(i) of the Customs Act 1962 on the appellant. Being aggrieved, the appellants preferred appeal before this Tribunal.
3. Shri Hardik Modh, Learned Counsel appearing on behalf of Appellant submitsthat Learned Commissioner erred in imposing penalty on Appellant. The impugned order violates the principles of natural justice. The impugned order has solely relied upon the worksheet title “Vipul Joshi” which was found in the folder named “Rajubhai” from pen drive retrieved from the residence of Ms. Nita Parmar. Appellant vide letter dated. 12.10.2021 and 30.11.21 demanded the said worksheet and reiterated the said request at the time of personal hearing. Despite this facts, the Ld. Commissioner passed the impugned order without supply of these vital documents. Since the impugned order has been passed without supply of these documents, it violates the principles of natural justice, and therefore, the same is required to be quashed and set aside. He placed reliance on the following decisions.
