Order date – 19 September 2022

Facts – 

• The Appellant, SHRI VYOMESH VINODRAI PATEL, were alleged to be smuggling gold from Dubai to India with intent not to pay Customs Duty using the persons as carriers.
• The appellant were alleged they he 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.
• The Appellant in the whole episode has been derived from the printout sheet retrieved from the pen-drive seized from the residential premise of Ms. Nita Chunilal and uncorroborated statements of persons. 
• The travel details provided by the travel agent through whom the tickets were purchased for the carriers as well as in the We Chat 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.
• The department issued a SCN 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.
• The adjudicating authority on 29-11-2021 confirmed the charges and demands proposed in Show Cause Notice. He imposed the penalty of Rs. 1,00,00,000/- under Section 112(b)(i) of the Customs Act 1962 on the appellants.
• Aggrieved, the appellant filed an appeal.

Issue – 

• Whether the appellant is liable to pay penalties under section 112(b) of the Customs Act, 1962?

Order – 

• The Tribunal observed that merely because name of Appellant was appearing in printout sheet retrieved from the pen drive of Ms. Nita Parmar that would not ipso facto make the appellant in any way privy to the commission of any offence with reference to the alleged gold smuggling activity. It will be unfair to fasten the appellant with penal consequences merely on the basis of a printout sheet recovered from the third party and statements of third party.
• Also 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 document/ piece of paper or any other evidence against the Appellant to show that the Appellant had financed the money for smuggling of gold into India.
• Finally, it was held that penalty under Section 112(b) can be imposed when a person acquires possession, 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.
• Appeal allowed.