Case Law Details
Vasu Hasmukhbhai Vasoya Vs C.C (CESTAT Ahmedabad)
The appeal before the CESTAT Ahmedabad arose from the imposition of a penalty of ₹3.00 lakh on the appellant under Section 112(a) of the Customs Act, 1962, in connection with a case of alleged smuggling of gold.
On 03.12.2018, Customs officers intercepted one Mohd. Sadin at the airport upon his arrival from Dubai and recovered 2,279.800 grams of gold valued at ₹71,58,571 (tariff value ₹65,69,301). The gold was concealed inside three metal prototype piston heads and was not declared to Customs. In his statement dated 03.12.2018, Mohd. Sadin stated that the concealed piston heads were handed over to him by Shri Alam Gohar, who was working as a supervisor in Riyadh, with instructions to contact the appellant upon reaching Ahmedabad airport.
In his statement dated 13.12.2018, the appellant stated that he was engaged in the manufacture of brake discs and had prior business dealings with M/s. Kian Belladi Institutional Trading, Riyadh, where Shri Alam Gohar worked as a representative. The appellant clarified that his last business transaction with the said firm was on 15.10.2018. He further stated that he received a phone call from Shri Alam Gohar on 03.12.2018 at around 6:30 a.m., after the interception of Mohd. Sadin, seeking legal assistance for him.
The adjudicating authority rejected the appellant’s request for cross-examination of Mohd. Sadin and imposed a penalty under Section 112(a) of the Customs Act. The penalty was based primarily on the phone calls allegedly exchanged between the appellant, Shri Alam Gohar, and Mohd. Sadin.
The appellant argued that all phone calls made to Mohd. Sadin occurred between 06:44:55 and 12:18:20 on 03.12.2018, at a time when Mohd. Sadin was already in the custody of Customs officers. It was contended that Customs could have verified any alleged involvement from the contents of these calls. The appellant further submitted that no incriminating material was found during the search of his premises, that his statement was exculpatory, and that the statement of Shri Alam Gohar was not on record. It was also argued that denial of cross-examination of Mohd. Sadin vitiated reliance on his statement, and that there was no evidence to establish any act, omission, or abetment attributable to the appellant.
The Department relied on circumstantial evidence and justified the denial of cross-examination. It contended that the penalty was based on statements and surrounding circumstances, despite the fact that the appellant never had physical possession of the seized gold.
After considering the submissions of both sides, the Tribunal found that there was no inculpatory statement establishing that the appellant was the recipient of the concealed gold. No incriminating material was recovered from the appellant’s premises, and no knowledge or involvement was evident from his statement. The Tribunal held that mere phone calls between the passenger and the appellant could not establish that the appellant had knowledge of or involvement with the offending goods.
The Tribunal further observed that it is settled law that statements cannot be relied upon without affording an opportunity for cross-examination. In the present case, cross-examination of Mohd. Sadin was clearly denied. The Tribunal concluded that the Department had failed to establish its case with convincing evidence and that the penalty was based only on assumptions, presumptions, and doubt.
Accordingly, the Tribunal set aside the penalty of ₹3.00 lakh and allowed the appeal.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
On 03.12.2018, Customs officers at airport intercepted one Mohd. Sadin arriving from Dubai and recovered 2279.800 gms of gold having market value of Rs. 71,58,571/-(tariff value of Rs. 65,69,301/-) that was concealed in 03 metal prototype piston heads and hence, not declared before the Customs officers. Shri Mohd. Sadin, in his statement dated 03.12.2018, inter alia, stated that he was handed over the piston heads concealed with gold by Shri Alam Gohar, who was working as supervisor in Riyadh with instructions to call the appellant upon reaching Ahmedabad airport. In his statement dated 13.12.2018, the appellant, inter alia, stated that he was engaged in manufacture of brake discs for passenger vehicles, etc. and had business relations with M/s. Kian Belladi Institutional Trading, Riyadh, where Shri Alam was working as a representative; that last business transaction with the said M/s. Kian took place on 15.10.2018. He informed the officers that he received phone call from Shri Alam Gohar on 03.12.2018 at around 06.30 AM (after interception of Shri Mohd. Sadin given that ETA of flight in which he arrived at Ahmedabad was 02.57 AM) seeking legal assistance for Mohd. Sadin. Ld. Adjudicating Authority rejected the request made by appellant for cross-examination of Shri Mohd. Sadin. He imposed penalty of Rs. 3.0 lakh on appellant under section 112 (a) of Customs Act, 1962 by citing phone calls received by appellant from Shri Alam Gohar and those made by appellant to Shri Mohd. Sadik on 03.11.2018.
2. The appellant submits that all the phone calls made by appellant to Shri Mohd. Sadin were between 06:44:55 and 12:18:20 of 03.12.2018 when Shri Mohd. Sadik was in custody of Custom Officers. Hence, Custom officers could have easily made out involvement, if any, of appellant from the said conversations. The officers also did not record statement of appellant in the presence of Shri Mohd. Sadin and vice versa to bring out the truth. The authorities below have also failed to appreciate that no incriminating evidence was found from search of appellant’s premises. The statement of appellant is exculpatory. Statement of Shri Alam Gohar is not on record. The request was made by appellant to the Ld. Adjudicating Authority, who also rejected the request made by appellant for cross-examination of Shri Mohd. Sadin. Inasmuch as there is no cogent evidence to pinpoint any act or omission on the part of appellant qua goods or to establish abetment on his part, penalty imposed on appellant under section 112 (a)(i) of Customs Act, 1962 is not tenable in the eyes of law
3. The Department on the other side has relied upon circumstantial evidence and justified the denial of cross-examination of Mohd. Sadin’s statement, which, as per the appellant was the sole basis for the imposition of a penalty under Section 112 (a) of the Customs Act, 1962. The basis for imposition of penalty has been stated as circumstantial evidence and statement of others, though not subjected to cross-examination and though gold was never physically possessed.
4. Arguments of both sides have been considered. It is found that there is no culpatory statement of the accused who was stated to be the recipient of metal prototype piston heads having gold concealed inside. No incriminating material was found at the premises of the appellants nor was any knowledge of involvement exhibited in the statement of the appellant. Some calls made between the passengers and the appellant cannot be taken to be the basis for holding him as the recipient with knowledge of the offending goods. It is by now also settled law that a statement cannot be relied upon without affording cross-examination. In this case, same has been clearly denied of Mohd. Sadin to the appellant.
5. In view of the foregoing, the department has not been able to make out a convincing case against the appellant and the same is only based on assumptions and presumptions and in doubt and therefore cannot be sustained as far as penalty on the appellant is concerned. Penalty of Rs. 3.0 Lakh is set aside.
6. Appeal allowed.
(Pronounced in the open court on 21.11.2025)
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