Case Law Details
Rameshbhai Lakhabhai Patel Vs Commissioner of Customs (CESTAT Ahmedabad)
We find that in the present case there is no dispute about illicit transaction of gold bars. Therefore impugned order of Ld. Commissioner (Appeals) has rightly upheld the absolute confiscation of the gold bars. As regard the prayer of the appellants that the confiscated goods should have been allowed to redeem on payment of fine, looking to the nature of the case, we do not find any illegality in the action of the ld. Adjudicating authority for absolute confiscation of the gold bars, therefore absolute confiscation is upheld.
It is established from the records that Shri Nareshbhai Savaliya masterminded the entire modus of smuggling of Gold bars by concealing the same in the embroidery machine exported by his overseas firm M/s Pali Overseas Trading Co., FZC, UAE to India. He had made the financial arrangement for importing machines for M/s Ambaji Prints. Further Shri Ramsehbhai Patel facilitated and abetted Shri Nareshbhai Savaliye in nefarious activity by allowing his company M/s Pali Overseas, in UAE and M/s Ambaji Prints in India to be used for smuggling of gold in embroidery machine. Department has produced sufficient evidence to establish that both the appellants were conspirator in the smuggling of goods.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The present appeals have been filed by Shri Rameshbhai Lakhabhai Patel and Shri Nareshbhai Savaliya against the Order-In-Appeal No. AHD-CUSTM-000-APP-425 to 427-19-20 dated 18.10.2019 passed by the Commissioner of Customs (Appeals), Ahmedabad.
2. The brief facts of the case are that M/s Ambaji Prints is a proprietorship firm wherein Shri Paresh Lakhabhai Patel is the proprietor. The said firm is engaged in the Job work of embroidery and import of Computerized Embroidery Machines. Whereas all the works related to import of machine is handed by Shri Rameshbhai Patel, brother of Shri Paresh Patel alonwith his friend Shri NareshbhaiSavaliya. Two computerized embroidery machines were imported and brought to Hazira port and Bill of Entry was filed for clearance of such two computerized embroidery machines for home consumption. In detail examination of the said two machines 25 gold bars totally weighing 19.600 Kgs. Valued at Rs. 5,77,31,000/- found concealed therein. The DRI officers recorded statements of Proprietor of M/s Ambaji Print, Shri Paresh Lakhabhai Patel and Shri Manoj Gadhiya of M/s Mayura Shipping Services. Since Shri Paresh Patel stated that he was not aware about the gold having been concealed in the embroidery machines and that the entire transaction for purchase and import of the machines was handled by the Appellants herein, the DRI authorities recorded the statement of the appellants. After the investigation, a show cause notice dated 29.11.17 was issued to all the Appellants, which was decided by the Order-In-Original dated 28.12.2018 vide which adjudicating authority has ordered confiscation of computerized embroidery machines with an option to pay fine of Rs, 5 Lakhs in lieu of confiscation of the embroidery machines, with a penalty of Rs. 50,000/- on M/s. Ambaji Prints. However, while imposing penalty of Rs. 1 crore on each of the Appellants herein, the adjudicating authority ordered absolute confiscation of 25Gold Bars under Section 111(d), (f),(i) and (l) of the Customs Act, 1962. Being aggrieved by the Order-in-Original, the appellants filed appeal before the Commissioner (Appeals), who upheld the Order-in-Original and rejected the appeal. Therefore the appellants are before us.
3. Shri Aditya Tripathi, learned Counsel for the appellants submits that the case against the Appellants has been made out on the basis of the statements of various persons including that of Shri Paresh Lakhabhai Patel of M/s Ambaji Prints. Their statements were obtained under pressure and duress and same has not been accepted by the authorities below. The impugned order also shows that the statements of the Appellants as well as Shri Paresh Lakhabhai Patel have been relied upon for holding that the Appellants knew about gold bars secreted in one of the machines imported in the name of M/s Ambaji Prints. But, not a single statement recorded by the DRI officers has been established as an admissible evidence as mandatorily required under Section 138B of the Customs Act, and therefore none of such statements was admissible as evidence in this case. He placed reliance on the following decisions:-
(a) Jindal Drugs Pvt. Ltd. – 2016 (340) ELT 67 (P&H)
(b) G-Tech Industries – 2016 (339) ELT 209 (P&H)
(c) J & K Cigarttes Ltd. – 2009 (242) ELT 189 (Delhi)
(d) Dhariwal Industries Ltd. – 2015(325) ELT 532 (KAR)
4. He further submits that Ld. Commissioner (Appeals) has committed an error of upholding penalty under Section 112(a) of the Act though the Appellants herein were not guilty of any omission or commission as contemplated under this provision justifying any penalty. Section 112(a) provides for penalty on any person 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 doing or omission of such act. This part of Section 112 is pressed in service by the Revenue in this case against the Appellants, however the appellants have not done anything or omitted to do anything which would render the goods in question liable for confiscation. When Section 111 of the Act is not attracted in the present case, the whole basis for imposing penalty against the appellants would vanish.
5. He also submits that penalty of Rs. 1 crore on each of them is excessive and unreasonable in the facts of the present case. Assuming without admitting that the Revenue’s case against the Appellants is true and sustainable, then also penalty of a sum equal to 20% of the value of goods liable for confiscation is highly disproportionate and unreasonable. Therefore, also such unreasonably high and excessive penalties deserve to be quashed and set aside in the interest of justice.
6. On the other hand, Shri Dharmendra Kanjani, learned Superintendent (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He placed reliance on the following decisions:-
(a) 2019(369) ELT 1538 (Tri. Bang) –V K Mohammad Ali vs. CC Cochin.
(b) 2003 (155) ELT 423(S.C.) – Om Prakash Bhatia vs. Commissioner of Customs, Delhi
(c) 2015(323)ELT 136 (Pat.) –MD. Akhtar vs. CC, Patna
(d) 2016 (344) ELT 1154 (Mad.) – Commissioner of Customs (Air) vs. P. Sinnasamy.
(e) 2020 (371) ELT 224 (Mad.) –Commissioner of Customs (Air) vs. Abdul Azeez
(f) 2019(370)ELT 472 (Tri. Chennai) –P Balampurugan vs. Commissioner of Customs, Tiruchirapalli.
(g) 2019 (366) ELT 402 (Ker.) – Commissioner of Customs, Cochin vs. Om Prakash Khatri.
(h) 2019(370) ELT 1399 (Tri. Bang.) Odiyanda Ayyappa Muddaiah vs. Commissioner of Customs.
7. We have carefully considered the submissions made by both the sides and perused the record.
8. We find that in the present case there is no dispute about illicit transaction of gold bars. Therefore impugned order of Ld. Commissioner (Appeals) has rightly upheld the absolute confiscation of the gold bars. As regard the prayer of the appellants that the confiscated goods should have been allowed to redeem on payment of fine, looking to the nature of the case, we do not find any illegality in the action of the ld. Adjudicating authority for absolute confiscation of the gold bars, therefore absolute confiscation is upheld.
9. We also find that in the present matter Ld. Commissioner (Appeals) has rightly imposed the penalties on Appellants. Therefore the same is also not required any interference. It is established from the records that Shri Nareshbhai Savaliya masterminded the entire modus of smuggling of Gold bars by concealing the same in the embroidery machine exported by his overseas firm M/s Pali Overseas Trading Co., FZC, UAE to India. He had made the financial arrangement for importing machines for M/s Ambaji Prints. Further Shri Ramsehbhai Patel facilitated and abetted Shri Nareshbhai Savaliye in nefarious activity by allowing his company M/s Pali Overseas, in UAE and M/s Ambaji Prints in India to be used for smuggling of gold in embroidery machine. Department has produced sufficient evidence to establish that both the appellants were conspirator in the smuggling of goods.
10. In view of the above, we do not find any infirmity in the impugned order, hence the same is upheld. Accordingly, we reject the appeals as devoid of any merits.
(Pronounced in the open court 05.08.2022)
