2025(06)LCX0006

Kolkata Tribunal

Sachin Bharat Pawar

Versus

Pr. Commissioner of Customs (Preventive)

Customs Appeal No. 77422 of 2019 decided on 05-06-2025

IN THE CUSTOMS

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH : KOLKATA

REGIONAL BENCH – COURT NO. 1

Customs Appeal No. 77422 of 2019

(Arising out of Adjudication Order No. 30/CUS/CC(P)/WB/2018-19 dated 25.02.2019 passed by the Principal Commissioner of Customs (Preventive), Custom House, 3 rd Floor, 15/1, Strand Road, Kolkata – 700 001)

Shri Sachin Bharat Pawar                                : Appellant
S/o. Bharat Ramrao Pawar
M/s. Laxmi Gold and Silver Refinery,
2nd Floor, Khudiram Pally, Siliguri – 734 001

VERSUS

Pr. Commissioner of Customs (Preventive)        : Respondent
3rd Floor, Custom House,
15/1, Strand Road, Kolkata – 700 001

APPEARANCE:

Shri Prithwijit Sharma, Advocate, for the Appellant

Shri Faiz Ahmed, Authorized Representative, for the Respondent

CORAM:

HON’BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON’BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)

FINAL ORDER NO. 76441 / 2025

DATE OF HEARING: 03.06.2025
DATE OF DECISION: 05.06.2025

ORDER: [PER SHRI ASHOK JINDAL]

The appellant is in appeal contesting the imposition of penalty of Rs.30,00,000/- (Rupees Thirty Lakhs only) on him under Section 112(b) of the Customs Act, 1962.

2. The facts of the case are that on 14.11.2017, at around 23:50 hours, the Officers of the Directorate of Revenue Intelligence (DRI), intercepted three persons who were coming from Siliguri Junction Railway Station, namely, Shri Sachin Patil, Shri Krishna Shankar Kirdat and Shri Uttam Dilip Gujale, who informed that they were coming from Jaigaon, District – Alipurduar and were going to the Siliguri market. They initially denied carrying any contraband with them, but after repeated queries, they ultimately confessed that they were carrying gold bars of foreign origin which had been smuggled into India from China via Bhutan. When it was informed that a thorough search of these persons would be conducted, the said three intercepted persons requested the DRI Officials to take them to a safer place for further enquiry. Considering their request, and as the place of interception was a public place and many onlookers started gathering thereby creating chaos, they were given the option to have the enquiry conducted in a secured place in the DRI Office situated at Dey Bhawan, Ashutosh Mukherjee Road, Collegepara, Siliguri – 734 001.

3. On reaching the DRI Office at 01:00 hours, on 15.11.2017, it was found that the three apprehended persons were carrying primary gold bars of foreign origin, which were alleged to have been smuggled into India from China via Bhutan. The gold recovered from them totally weighted 3 kgs. in three (03) pieces having foreign marks embossed on them.

4. Thereafter, statements of the intercepted persons were recorded, whereby it has been inter alia revealed that the appellant had told them that the gold is being smuggled into Bhutan from foreign countries and if they could procure the gold from Bhutan and sell the same in India, then they could earn a lot of money. It was also revealed that the appellant had introduced them to one Bhutanese national who came to their shop; however they did not know the name of the said Bhutanese person. It was further gathered from the said statements that the appellant had asked them to go to Phuentsholing, Bhutan to procure smuggled gold from the said Bhutanese National and for this, the appellant had promised to pay Rs.2,000/- per kg. of gold.

5.1. By relying on these statements of the three intercepted persons, the appellant was also apprehended. Summons were thereafter issued to the appellant. The appellant appeared on 27.12.2017 and his statement was recorded. Thereafter, he was arrested.

6. Later on, a Show Cause Notice was issued to the appellant proposing to impose penalty on him under Section 112(b) of the Customs Act, 1962.

7. The matter was adjudicated vide the impugned order wherein a penalty of Rs.30,00,000/- has been imposed on the appellant under Section 112(b) of the said Act.

8. Aggrieved from the said order, the appellant is before us.

9. The Ld. Counsel appearing on behalf of the appellant submits that the appellant is in the business of melting of metals and has no connection with the above three apprehended persons who were found to be carrying gold from Bhutan to Siliguri. It is submitted by him that the appellant never admitted during the course of proceedings that the said three persons have brought gold on the instructions of the appellant. Moreover, it is stated by the Ld. Counsel for the appellant that the appellant had no role in the importation of the said gold through illegal means by the above three apprehended persons and the appellant is not the claimant of the gold in question.

9.1. It is further submitted that the penalty has been imposed on the appellant on the basis of the statements given by the apprehended persons implicating the appellant, but no evidence has been brought on record by the adjudicating authority to implicate the appellant in this case.

9.2. In view of these submissions, the Ld. Counsel for the appellant contends that the penalty on the appellant cannot be imposed.

10. On the other hand, the Ld. Authorized Representative of the Revenue supported the impugned order.

11. Heard the parties and considered their submissions.

12. We find that during the course of investigation, a statement of the appellant was recorded on 27.12.2017. For better appreciation of the facts, the said statement recorded from the appellant by the Departmental officers during the course of investigation is reproduced hereinbelow: -

“i) His permanent address is Taluka- Khanapur, District- Sangli, Vasumbe, Maharashtra-415309. At first he, his brother and his elder sister had been residing there along with their parents. About six years back, his brother Shri Shivaji Bharat Pawar came to Siliguri and established one gold and silver refinery shop in the name and style of M/s Laxmi Gold and Silver Refinery. After that, he too came to Siliguri and joined his brother Shri Shivaji Bharat Pawar in his work/business at M/s Laxmi Gold and Silver Refinery.

ii) His family consists of him and his wife, Smt Snehal Sachin Pawar. They reside at the 2nd floor of the same building of M/s Laxmi Gold and Silver Refinery, Khudiram Pally, Siliguri. His brother Shivaji Bharat Pawar is presently residing in a rented house at Swamiji Sarani By-lane, Hakimpara, Siliguri.

iii) At about six years ago, the shop M/s Laxmi Gold and Silver refinery was established and his younger brother Shri Shivaji Bharat Pawar is the actual owner of the said shop. He too looks after the day to day business of the said shop along with his brother Shri Shivaji Bharat Pawar.

iv) No retail sale or purchase of gold is made from the premises of M/s Laxmi Gold and Silver Refinery. Only the work relating to melting and refining of silver and gold are carried out from their shop.

v)They had never procured any gold or silver from any bank or whole seller.

vi) Only four staff namely Shri Amol Balkrushna Ingale, Shri Sachin Patil, Shri Krishna Shankar Kirdat and Shri Uttam Dilip Gujaleare are employed at M/s Laxmi Gold and Silver Refinery. All of them are from District- Sangli, Maharashtra. Three out of these four, Shri Sachin Patil, Shri Krishna Shankar Kirdat and Shri Uttam Dilip Gujale have been working for the last six to seven months and Shri Amol Balkrushna Ingale is an old employee; he has been working at M/s Laxmi Gold and Silver Refinery for the last two years. He did not recollect their mobile numbers.

vii) On being asked whether he brought the documents along with the original stock register and bill/cash memo book for the year 2017-18 as was directed in the summons dated 26.12.2017, he stated that apart from his Aadhar Card bearing No. 610044892540 he did not bring any of those documents. He further stated that they are not involved in purchasing and selling of gold and silver and hence they do not maintain any bills or stock register. He does not know anything regarding the Bank Account of M/s Laxmi Gold and Silver Refinery.

viii) He has a savings Bank Account in Axis Bank, S.F. Road Branch, Siliguri.

ix) He is aware of the fact that on 22.07.2017 the officers of DRI, Siliguri Regional Unit apprehended Shri Amol Balkrushna Ingale at Burdwan Road, Siliguri alongwith 1.917 kgs of smuggled gold brought from Bhutan.

x) On being asked to go through the statement dated 22.07.2017 of Shri Amol Balkrushna Ingale and offer his comments on the fact that in his voluntary statement dated 22.07.2017, Shri Amol Balkrushna Ingale categorically stated that he had been to Bhutan for taking delivery of the smuggled gold from one Bhutanese person at Phuentsholing as per his (Shri Sachin Pawar) direction and he (Shri Sachin Pawar) is involved in the smuggling of foreign origin gold from Bhutan to India; he had gone through the entire statement dated 22.07.2017 of Shri Amol Balkrushna Ingale and stated that he did not have any idea why Shri Amol Balkrushna Ingale had taken his name.

xi) He did not send Shri Amol Balkrushna Ingale to Phuentsholing, Bhutan for procuring 1.917 kgs of Gold from any Bhutanese person.

xii) He is aware of the fact that on 14.11.2017 the officers of DRI, Siliguri Regional Unit apprehended three persons namely Shri Sachin Patil, Shri Krishna Shankar Kirdat and Shri Uttam Dilip Gujale near Tenzing Norgay bus terminus area along with 3.000 kgs of smuggled gold which were brought by them from Bhutan.

xiii) On being asked to go through the statement dated 15.11.2017 of Shri Sachin Patil, Shri Krishna Shankar Kirdat and Shri Uttam Dilip Gujale and offer his comments on the fact that in their voluntary statements dated 15.11.2017 Shri Sachin Patil, Shri Krishna Shankar Kirdat and Shri Uttam Dilip Gujale categorically stated that they had been to Bhutan for taking delivery of smuggled gold from one Bhutanese person at Phuentsholing as per his (Shri Sachin Pawar) direction and he (Shri Sachin Pawar) is involved in the smuggling of foreign origin gold from Bhutan to India, he had gone through the entire statemens dated 15.11.2017 of Shri Sachin Patil, Shri Krishna Shankar Kirdat and Shri Uttam Dilip Gujale and stated that he did not have any idea why they had taken his name. He did not send any of them to Phuentsholing, Bhutan to procure 3,000 kgs of smuggled gold from any Bhutanese person.

xiv) On being asked to offer his comments on the fact that Shri Sachin Patil in his statement dated 15.11.2017 had stated that the person of Bhutan visited his shop (i.e M/s Laxmi Gold and Silver refinery) in connection with smuggling of foreign origin gold, he stated that he did not know any such Bhutanese person.

xv) His contact number is 9832916427. Apart from this number he does not use any other number.”

12.1. On going through the above statement we find that the appellant has never admitted that he was engaged in the activity of smuggling of gold. Moreover, it is the statement on record that the appellant never procured any gold or silver from any bank or wholesaler. From the said statement, it is not forthcoming as to the appellant being involved in the alleged activity of smuggling of the gold in question from Bhutan by the said three apprehended persons. We also observe that no corroborative evidence has been brought on record by the Revenue to establish the involvement of the appellant in the alleged smuggling of the gold in question.

13. In these circumstances, merely on the basis of statements of the three apprehended persons who were involved in the activity of smuggling of gold, penalty cannot be imposed on the appellant.

14. Consequently, the penalty imposed on the appellant under Section 112(b) of the Customs Act, 1962 is set aside.

15. In view of this, the appeal is allowed, with consequential relief, if any.

(Order pronounced in the open court on 05.06.2025)

Sd/-            
(ASHOK JINDAL)
MEMBER (JUDICIAL)

 Sd/-            
(K. ANPAZHAKAN)
MEMBER (TECHNICAL)