Penalty Based on Call Records Unsustainable: CESTAT Rejects Customs Case in Gold Smuggling Dispute [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that reliance solely on call detail records and circumstantial inferences cannot justify the imposition of penalty under Section 112(a) of theCustoms Act, 1962 in proceedings arising out of an alleged gold smuggling attempt.

The appellant, Vasu Hasmukhbhai Vasoya, came under scrutiny after Customs officers at Ahmedabad airport intercepted one Mohd. Sadin arriving from Dubai o and recovered 2279.800 grams of gold concealed inside three prototype piston heads. The passenger allegedly stated that these piston heads had been handed over to him in Riyadh by one Alam Gohar, who instructed him to contact the appellant upon landing.

On this basis, the Adjudicating Authority initiated proceedings and, relying primarily on call-detail records between the parties, imposed a penalty of ₹3,00,000 under Section 112(a) of the Customs Act, 1962. The appellant’s request for cross-examination of the intercepted passenger was rejected, and the Commissioner (Appeals) affirmed the penalty.

The appellant, represented through Vikas Mehta, argued that all calls with the intercepted passenger occurred after he was already in the custody of Customs officers, making it impossible for any clandestine coordination to have taken place. He submitted that no incriminating material was recovered from his premises, his own statement was exculpatory, and the statement of the alleged foreign handler, was not even on record. The appellant argued that in absence of any act or omission establishing knowledge or involvement, penalty under Section 112(a) of the Customs Act, 1962 could not stand.

The Department, represented through P. Ganesan, submitted that the pattern of calls among the appellant, the intercepted passenger, and Alam Gohar constituted sufficient circumstantial evidence to infer involvement in the smuggling activity.

The bench of Judicial Member, Somesh Arora, held that no culpatory statement of the appellant existed on record and no incriminating materials were recovered from his premises. The bench observed that call records, without substantive corroboration, could not establish abetment or knowledge, particularly since the intercepted passenger was already in Customs custody at the time of the calls.

Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here

CESTAT ruled that the Department’s case was based on assumptions and lacked concrete evidence capable of linking the appellant to the smuggled gold. Consequently, the penalty of ₹3,00,000 imposed under Section 112(a) of the Customs Act, 1962 was set aside, and the appeal was allowed.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates