Judgment:
1. The appeals are taken up for disposal with the consent of both sides, after waiving deposit.
2. The appeal by Babulal Jain is against the order of the Commissioner of Customs (Adjudication), Mumbai, ordering confiscation under Section 121 of the Act of currency of Rs. 2.50 lakhs seized from the possession of his employee Suresh Patel and against a penalty imposed on him under Section 112 of the Act of Rs. 25,000/-. The appeal by Suresh Patel is against the penalty imposed on him of Rs. 2000/- under Section 112 of the Act.
3. The order of the Commissioner states that following the seizure of a sizable quantity of gold from Imtiyaz Pothiyawala, the officers of the Directorate of Revenue Intelligence searched on 8-3-2000 the premises at Thakkar Niwas in the occupation of Bhupendra Thakkar. When the search was going on, Suresh Patel entered the premises carrying the currency in question. He told the officers that the money had been given to him by his employer for being given to Rajubhai. Since there was no one in the premises named Rajubhai, the officers became suspicious and seized the currency. Babubhai Jain, when confronted by the officers the next day, confirmed that he has given the money to Suresh Patel for being passed on to Rajubhai, who, he says, was an angadia, for being sent to his (Jain's), marble factory at Rajasthan to defray the expenses which has been incurred there. The Show Cause Notice issued to Imtiyaz Pothiyawala, Bhupendra Thakkar and other persons called upon both the appellants before me to Show Cause why the currency should not be confiscated under Section 121 of the Act, as sales proceeds of smuggled gold. It did not call upon them to explain as to why penalty should not be imposed on them. In the order impugned in these appeals, the Commissioner has ordered confiscation of the currency and imposed penalties on both these appellants.
4. The fact that no notice was issued proposing to impose penalty is itself sufficient to set aside the penalties imposed on both the appellants. In addition, the contention of the common counsel for both the appellants that there is not the slightest evidence on which a valid finding connect that the money represents the proceeds of sale of smuggled gold, or that the two appellants guilty of any act or omission which renders them liable to penalty under Section 112 of the Act, has to be accepted. The only reason that the Commissioner himself gives for his finding, that the currency is the proceeds of the sale of gold, is in paragraph 154 of his order and reads as follows: "Shri Suresh Bhanji Patel was carrying this currency. Shri Suresh is a matured person, if that is correct, the money was to be taken to Ahmedabad through Angadia, certainly he would have not brought to Shri Bhupendra Thakkar premises, Shri Thakkar was not Angadia. So, therefore, it is merely an afterthought." 5. It does not need any great discussion to say that these three sentences do not form any basis to hold that the currency was the sale proceeds of gold. It is not enough evidence to satisfy the requirement of Section 121 of the Act explained in various decisions of the Tribunal, that before any money is seized as being the proceeds of sale of smuggled goods, it must be established that there was a sale of goods which were smuggled, and that the money in question is established to be the proceeds of sale of such goods. It is difficult to accept the contention of the counsel for the appellant that Patel mistakenly went into the premises of Thakkar, while looking for Rajubhai, the manager of R.R. Angadia, located at Fofalwadi, which according to him is five or six buildings away from Thakkar Niwas.
Finding Patel with the money certainly could have given rise to investigation. It was however up to the officers of the Directorate of Revenue Intelligence to conduct proper investigation to establish a credible basis for the claim that the money was the proceeds of sale of gold. This does not appear to have been done. As the things stand, which according to the Commissioner, the money is the proceeds of sale of smuggled gold, the identity of the gold, its quantity, or its buyer, seller, approximate date of sale, anything relating to the transaction is not known.
6. The Commissioner's order seems to suggest that it is up to the owner of the currency to prove that this is not the proceeds of the sale of smuggled gold. There is no such provision in law and the department has completely failed to advance any evidence. The Commissioner's order is totally silent as to the reason for imposition of penalty on these appellants.
7. The appeals are accordingly allowed and the impugned order set aside.