1. This appeal is directed against the order of the Collector of Customs, Bangalore dated 27.4.1985 imposing a penalty of Rs. 5 lakhs under Section 112 of the Customs Act, 1962 (hereinafter referred to as the Act).

2. The officers attached to the D.R.I., Bangalore on the basis of information visited room No. 212, Guptas Board and Lodge at Bangalore on 19.7.1982 at about 7 p.m. and found one O.P. Neema in occupation of the same. On interrogation the said Neema admitted before the authorities that he was in possession of 15 pellets of gold and the authorities consequently recovered the same and found the inscription "CREDIT 999.0, SWISSE. 10 TOLAS, CHI, ASSAER, PONDEUR" on them. The gold pellets were totally found to weigh 1,749 gms. As the said Neema was not able to satisfactorily account for the licit acquisition and possession of the gold pellets with foreign markings, they were seized by the authorities under mahazar as per law. The said Neema gave a statement before the authorities on 19,7.82 that the gold pellets under seizure were intended to be delivered over to the appellant herein. The authorities also recovered a strip of paper from the said Neema containing the telephone number of the appellants firm "Mutha and Company". It is in these circumstances after further investigation proceedings were instituted against the appellant and others, ultimately resulting in the present impugned order now appealed against.

3. Shri Jeshtmal, the learned counsel for the appellant submitted that there is absolutely no ray of evidence against the appellant connecting him in any way with the seizure of the foreign gold. It was urged that the entire case is sought to be rested on the basis of the statement recorded from O.P. Neema from whose possession the gold pellets with foreign markings were recovered by the authorities. It was urged that there is absolutely no evidence on record to even remotely indicate that the appellant had played any part at all or was in any way concerned with the gold pellets under seizure either before or after.

4. Shri Krishna, the learned D.R. fairly conceded that the only evidence available against the appellant is the statement of O.P. Neema to the effect that the gold pellets under seizure was intended to be handed over to the appellant arid a strip of paper containing the telephone number of the appellants firm. The learned D.R., however, submitted that since the said O.P. Neema did not retract his statement for a long time till after he gave a reply to the show cause notice, the statement can be accepted and acted upon.

5. We have carefully considered the submissions of the parties herein. As rightly contended by the learned counsel for the appellant there is absolutely no evidence on record connecting the appellant with the commission of any offence in relation to the gold pellets under seizure. Merely because one O.P. Neema from whose possession the gold pellets were recovered has given a statement that the eventually intended to deliver the same over the appellant, that would not ipso facto make the appellant in any way privy to the commission of any offence with reference to the gold pellets under seizure. We have carefully gone through the entire evidence available on record and we do not find a ray of evidence in any way connecting the appellant with the commission of any offence in relation to the gold pellets under seizure. We also find that the Bench of the Tribunal in similar cases (Appeal Nos. C/191/1985 and C/202/85 dated 26.6.1986 in the case of S/Shri Sathayanarayanamurthy & C.P. Srinath v. Collector of Customs, Madras and G/Appeal No. 134/86(MAS) dated 29.8.1986 in the case of Shri seshmal M. Jain v. Collector of Central Excise, Bangalore, D87 (27) ELT 504 (Tribunal) have exonerated the appellant of the charge. We hold that it will be unfair to fasten the appellant with penal consequences merely on the basis of a statement recorded from a third party to the effect that gold pellets under seizure were eventually intended to be delivered to him. This circumstance and the possession of a strip of paper containing the telephone number of the appellants firm, in our opinion, are not adequate to bring home the charge against the appellant as per law. In this view of the matter we set aside the impugned order appealed against in respect of the proceedings under the Customs Act, 1962 with consequential relief to the appellant.

6. Shri Jesthmal, the learned counsel at this stage submitted that he filed one appeal in respect of the penalty under the Customs Act as well as the Gold (Control) Act, as they were covered by a single order namely, the impugned order now appealed against. The learned counsel, however, undertook to separately file an appeal to satisfy the technical requirements in respect of the penalty imposed on the appellant under the provisions of the Gold (Control) Act, 1968. Since all the papers have already been filed along with this appeal, the learned counsel is permitted to file a separate appeal along with the necessary fee for the same.