CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH – COURT NO. I CUSTOMS APPEAL NO. 50837 OF 2024 [Arising out of Order-in-Appeal No. IND-EXCUS-000-APP-175-179-2023-24 dated 11.10.2023 passed by the Commissioner (Appeals) Customs, CGST, Central Excise, Indore (M.P.)]

Shri Mitul Kumar Patel ..…Appellant Partner of M/s. S.R. & Co., 1690/01, Goverdhan Apartment, Dhal Ni Pole, Astodiya Chakla, Ahmedabad - Gujarat VERSUS The Commissioner of Customs .....Respondent Office of the Commissioner of Customs, B-Zone, 3rd Floor, Village Pipliyakumar, Nipaniya, Indore 452001 APPEARANCE:

Shri Somesh Jain, Advocate for the Appellant Shri Nikhil Mohan Goyal, Authorized Representative for the Department CORAM:

HON’BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON’BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL)

Date of Hearing: 12.08.2025 Date of Decision: 06.02.2026 FINAL ORDER NO. 50223/2026 JUSTICE DILIP GUPTA:

This appeal has been filed by Mitual Kumar Patel¹, a partner in M/s.

S.R. & Co., for quashing the order dated 11.10.2023 passed by the Commissioner (Appeals) Customs, CGST, Central Excise, Indore (M.P.)² to the extent it rejects the appeal filed by the appellant against the order dated

1. the appellant

2. the Commissioner (Appeals)

09.09.2022 passed by the Additional Commissioner of Customs, Indore³ that confirms the imposition of penalty upon the appellant under sections

112(b)(i) and 114AA of the Customs Act, 1962⁴

2. M/s. S.R. & Co. is engaged in the trading of gold bullion. The appellant is a partner in M/s. S.R. & Co. One, Gourav Jain, a partner in M/s. Pulak Ornaments LLP, is said to have placed an order of 69kg gold bars with the appellant with a condition that the payments would be made within one or two days. Ajay Kumar and Mohammad Nisar Mew took delivery of the gold bars on 20.03.2021 and while they were returning to Indore by car, the officers of Directorate Revenue Intelligence⁵ intercepted the car at Indore and seized the gold bars. Statements of Ajay Kumar, Mohammad Nisar Mew and Gourav Jain were recorded on 21.03.2021. Search was also conducted at the premises of the appellant on 21.03.2021 and purchase and sale invoices, pen drives and digital video recorder were seized. Statement of the appellant was also recorded.

3. The appellant, in his statement made on 30.04.2021, in response to question numbers 22, 23 and 24 stated that the gold bars supplied to Gourav Jain under cover of invoice dated 20.03.2021 were purchased from M/s. Ariplutus Metals Pvt. Ltd. This fact was also stated by the appellant in the letter dated 29.05.2021 addressed to the investigating authority stating that it had sold the gold bars in question to M/s. Pulak Ornaments LLP under the Invoice dated 20.03.2021. It was further clarified that the said gold bars were originally purchased by M/s. S.R. & Co. from M/s. Ariplutus Metals Pvt. Ltd. under Invoice dated 19.03.2021. In the said communication M/s. S.R. & Co. also categorically denied the contents of the earlier recorded statement

3. the Additional Commissioner

4. the Customs Act

5. the DRI wherein it was stated that it had received cash payment from Pulak Ornaments LLP towards the sale of the gold bars.

4. The appellant requested for cross-examination of Ajay Kumar, Mohammad Nisar Mew and Gourav Jain but the cross-examination was denied.

5. A show cause notice dated 17.09.2021 was issued to the appellant and others. The allegations against the appellant made in the show cause notice are as follows:

“2. Shri Mitul Kumar Patel:-

i) He appears to be one of the masterminds behind the whole Gold smuggling activity, He appears to be the supplier of the said 69 kg of smuggled Gold bars. He purchased smuggled Foreign Origin Gold from different suppliers in Ahmedabad, converted them to Gold bars which look like domestic origin bars, by melting and supplied the same to Shri Gourav Jain of Indore:

ii) He appears to be well aware of the facts that Foreign Origin Gold could be smuggled in guise of bars formed b