TMI Blog2003 (11) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... dependent Panch Witnesses and recovered 21 FM (foreign marked) gold biscuits weighing 2449.944 gms., valued at Rs. 11,84,550/-, concealed under a bed-sheet along with two packets of cellophane tape and Laser brand blades. Two other persons viz. Sh. Ashutosh Dubey (respondent in C/612/2002) and Sh. Uchab Pradhan were also present on the spot, and their personal search was also conducted, which resulted in the recovery of Delhi-to-Jodhpur railway tickets from Ashutosh Dubey and one packet of red chilli powder from Uchab Pradhan and two white langots from each of them. D.R. Jain told the officers that the gold biscuits belonged to him and had been brought from Delhi by Dubey and Pradhan. Dubey and Pradhan corroborated this statement and told the officers that they had brought respectively 10 and 11 FM gold biscuits from Delhi and had used their langots for concealing the gold. But none of them produced any evidence of legal acquisition/possession of the gold biscuits to the satisfaction of the officers. The officers of Customs believed that the gold biscuits had been brought through illegal means in contravention of Sections 7(c) and 11 of the Customs Act and were liable to conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llers, Karol Bagh, New Delhi regarding sale of 107 Ten Tola Gold bars to M/s. Balaji Enterprises, Delhi vide Bill No. 106, dated 10-4-1997. (vii) Bill No. 106, dated 10-4-1997 of M/s. Ess Vee Jewellers, Karol Bagh, New Delhi. (viii) Delivery Challan No. GOL/14/97, dated 6-1-1997 of MMTC, New Delhi. (ix) Delivery Challan No. GOL/15/97, dated 10-1-1997 of MMTC, New Delhi. (x) Invoice/Cash Memo No. GOL/BE/01, dated 31-1-1997 of MMTC, New Delhi. (xi) MMTC letter dated 11-9-1996 to M/s. Balaji Enterprises. (xii) MOU between M/s. Balaji Enterprises, New Delhi and MMTC, New Delhi dated 11-9-1996. (xiii) Complaints of D.R. Jain, Ashutosh Dubey and Uchab Pradhan, dated 25-4-1997. D.R. Jain in his subsequent letter dated 5-6-1997 stated that the 21 foreign marked gold biscuits had been sent to him by U.C. Gupta under Challan Nos. 14, 15 and 16, dated 22-4-1997 under the agreement dated 28-2-1997 executed between their concerns viz. Jain Bullions and Balaji Enterprises. He also produced copies of the challans and agreement. U.C. Gupta also produced, on 23-6-1997, copies of all the documents already produced by the advocates of Jain, Dubey and Pradhan, U.C. Gupta also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and destroyed by the officers. Referring to the letter dated 8-10-1997 of the Asstt. Commissioner (Preventive), New Delhi, relied on by the adjudicating authority, DR submitted that the findings of the adjudicating authority based on the said letter were not sustainable. Contrary to what was found by the adjudicating authority, the Asstt. Commissioner (Preventive), New Delhi had not confirmed that the documents submitted by M/s. Balaji Enterprises were genuine or that the consignment sent by them under Challan Nos. 14, 15 and 16, dated 22-4-1997 was out of the quantity of 207 Ten Tola bars purchased from Ess Vee Jewellers under Bills dated 7-4-1997, 9-4-1997 and 10-4-1997. The DR opined that the Asstt. Commissioner s letter probably referred to gold bars different from those involved in the instant case. It was further submitted that the ld. Commissioner s observation that none of the statements recorded under Section 108 of the Customs Act had indicated that the 21 gold biscuits were smuggled was erroneous inasmuch as, in his statement, dated 24-4-1997, Ashutosh Dubey had stated that the gold was of smuggled nature. The adjudicating authority failed to appreciate the department s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la High Court and submitted that, though the department was not required to prove its case with mathematical precision, they were still under an obligation to establish the guilt of the offender with such degree of probability as to prompt a prudent man to believe in the existence of facts constituting the guilt. The cited decision of the High Court is in Rajendra Prabhu v. Union of India [1999 (107) E.L.T. 293 (Ker.)]. In the instant case, the department proceeded merely on the basis of a suspicion and not on the basis of any direct or circumstantial evidence. 6.1 We have carefully examined the submissions. 6.2 The adjudicating authority has, in the remanded proceedings, held that the seized gold biscuits are not liable to confiscation. The authority has, accordingly, ordered release of the goods to M/s. Balaji Enterprises and also dropped the proposal to impose penalties on the respondents. Undisputedly, the seized gold biscuits were goods notified under Section 123(2) of the Customs Act. The person from whose possession the goods were seized as also the person who claimed ownership on the goods had the burden to prove that the goods were not smuggled goods and had been legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jain through Dubey and Pradhan were a part of the consignment of gold bars purchased by M/s. Balaji Enteprises from M/s. Ess Vee Jewellers (at Karol Bagh) who had purchased the consignment from their sister concern (at Ram Nagar) who had imported and cleared the consignment under Bill of Entry dated 14-2-1997 through MMTC. Barring some feeble notes of suspicion here and there in the memoranda of appeals as well as the show-cause notice, against the respondents, we have not come across any well-founded challenge to the case of the respondents. We find that the respondents succeeded in discharging the burden of proof under Section 123(1) of the Customs Act by establishing an unbroken sequence of lawful transactions leading to D.R. Jain s ultimate possession of the gold. As held by the Hon ble High Court of Kerala in the case of Rajendra Prabhu (supra), suspicion, however strong, cannot take the place of proof. 6.3 In the cited case, the court accepted a retraction, dated 29-10-1994 of the first petitioner, of his earlier statement, dated 23-10-1994 and also accepted a baggage receipt, dated 19-10-1994 as evidence of licit importation of the gold biscuits seized in that case. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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