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2025 (6) TMI 269 - AT - CustomsTown seizure - subject gold bars were seized from Shri Sumit Verma while he was travelling from Kolkata to Jaipur and there were also no foreign markings on the subject gold bars - Confiscation of seized gold bars along with seized packing materials under Section 111(b) (h) (l) (m) Section 118 of the Customs Act 1962 - imposition of penalty on Shri Sumit Verma under Section 112(a) (b) of the Customs Act 1962 - HELD THAT - Section 110 confers powers on the proper officer to seize goods only if he has reasons to believe that the goods are liable for confiscation. Hon ble Delhi High Court in the case of Shanti Lal Mehta vs. Union of India Ors. 1982 (11) TMI 56 - HIGH COURT OF DELHI elaborately dealt with town seizures and the evidences required to have the reasonable belief that the goods are smuggled in nature in such cases. The seizure was made on the basis of statement of Shri Sumit Verma. On perusal of the statement as reproduced in the SCN it is found that the fact of smuggling and melting was not stated by Shri Sumit Verma on the basis of his own knowledge but on the basis of what was told to him by Shri Anil Soni. While the revenue is heavily relying on the statement of Shri Sumit Verma and its evidentiary value we cannot lose sight of the fact that the statement of Shri Sumit Verma at best constitutes a hearsay statement as what was stated by him was only hearsay. At the same time Shri Anil Soni in his statement nowhere admitted the fact of smuggling or foreign origin of recovered gold bars. In these facts it was incumbent upon the revenue to bring on record some other corroborative evidence to support the charge of smuggling. However no further corroboration has been made by the revenue by leading any other evidence to show smuggled nature of subject gold bars. Thus it is observed that the reason to believe on which the officers presumed that the recovered gold bars were of smuggled nature is not supported by any corroborative evidence. There is no document available on record to establish that gold bars were smuggled into India without payment of customs duty. Hence the statement of Shri Sumit Verma does not establish reason to believe that the gold bars were smuggled into India without any valid documents. The objection of the revenue that the tax invoice was issued on 31.01.2023 and not on 26.01.2023 is completely incorrect. In fact the invoice itself refers to both the dates i.e. 26.01.2023 as the date of issuance of tax invoice and 31.01.2023 as the date on which the tax invoice was acknowledged by IRP. From the FAQ issued by the Board for steps of e-invoicing we find that the tax payer is first required to create GST invoices on their own accounting system thereafter the invoices are reported to any one of the six IRP on reporting IRP returns a signed e-invoice with a unique invoice reference number along with QR code whereupon the invoice is shared with GST systems for auto-population in the suppliers GSTR-1 return. The entire mechanism to report a tax invoice on IRP and thereafter issuance of e-invoice with a unique invoice reference number along with QR code is to ensure that the details of invoice gets auto-populated in GSTR-1 of the supplier - merely because the tax invoice was reported on 31.01.2023 the same would not dilute the fact of issuance of tax invoice on 26.01.2023 and the objection now taken by the revenue clearly appears to be misconceived. On perusing the records it is found that neither the said report forms part of SCN nor the said report was part of the adjudication order. The revenue also failed to bring the said report on record before the Appellate Authority. In these circumstances once this report has been brought on record for the very first time in this appeal the revenue cannot be allowed to raise this new plea at this stage. Needless to say this Tribunal cannot sustain the case of the revenue on a ground which was not there in the SCN or in the adjudication order and therefore there are no fruitful purpose to consider the same at this stage. Conclusion - i) The seizure was not based on reasonable belief as required under Section 110 of the Customs Act 1962. ii) The presumption under Section 123 cannot be invoked in the absence of reasonable belief. iii) The confiscation and penalties imposed were rightly set aside by the Commissioner (Appeals). iii) The confiscation and penalties imposed are rightly set aside by the Commissioner (Appeals). There are no reasons to interfere with the impugned order and accordingly the same is sustained - appeal of revenue dismissed.
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