TMI Blog2005 (10) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... sence of independent witnesses. In his statement dated 25-8-1994, Shri P. Ganapathi Asari admitted that the 4 gold biscuits of foreign origin were smuggled ones. Shri G. Subramanian, in his statement dated 25-8-1994, corroborated the statement of Shri Ganapathy Asari. The third partner, Shri Gomathinayagam, in his petition dated 9-9-1994 addressed to the Additional Commissioner of Customs, submitted inter alia that he had left for Madurai on 23-8-1994 and collected Rs. 2 lakhs from a relative for making gold ornaments and had also taken a loan of Rs. 10,000/- from a friend, one Shri Rangarajan; that from Madurai he had gone to Guruvayur and purchased four gold bars weighing 449.800 gms from one Shri A.T. Shahul Hameed on 24-8-1994 at a price of Rs. 2,06,908/- and returned to Tirunelveli on 25-8-1994; that, at his shop, he cut a bit weighing 17.100 gms from one of the gold bars and issued the same to one Shri Ravindran of Tirunelveli for making Vangi ring; that he left behind the 4 gold biscuits in the cash counter and retained the duty-paying documents with him; that he told his partners that the duty-paying documents for the gold biscuits were with him and then rushed to Theni a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y gold was not prohibited by law from selling the same to others. The documents produced by Shri Gomathinayagam had indicated the import of 42 gold biscuits through Calicut airport and two gold biscuits through Trivandrum airport prior to the seizure of the four gold biscuits in question. Preponderance of probability of the appellants having lawfully acquired possession of the gold bars was established. In the circumstances, it was not correct to hold that the appellants still had a burden under Section 123 of the Customs Act to prove that the gold biscuits in question were not smuggled ones. It was argued that, under Section 123, it was enough for the appellants to discharge their burden of proof by showing preponderance of probability of the gold biscuits having been lawfully acquired. Ld. Counsel relied on the Bombay High Court s decision in Poonam Chand Maluk Chand Shah v. State of Maharashtra [2000 (126) E.L.T. 161 (Bom.)] and the Supreme Court s judgment in the case of P.N. Krishna Lal Ors. v. Govt. of Kerala Another [1995 Supp (2) Supreme Court Cases 187]. He has also relied on the following decisions of the Tribunal :- (i) S.K. Chains v. Commissioner of Customs ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Calcutta Ors. [1983 (13) E.L.T. 1439 (S.C.)], ld. SDR argued that the restrictions on import of gold, when violated, amounted to prohibition for purposes of Section 111 of the Customs Act. With regard to the appellants plea for redemption of the gold biscuits, ld. SDR referred to Section 125 of the Customs Act and submitted that, where the goods were prohibited, it was open to the Customs authorities to confiscate them without giving any option to redeem them on payment of fine. If only the goods are not prohibited, the Customs authorities could allow the goods to be redeemed on payment of a fine in lieu of confiscation. In this connection, ld. SDR referred to the Board s Circular F.No. 495/5/92-Cus.VI, dated 10-5-1993 and also relied on the Calcutta High Court s decision in Commissioner of Customs v. Uma Shankar Verma [2000 (120) E.L.T. 322 (Cal.)]. It was also submitted that gold was a prohibited item coming within the first part of Section 125 of the Customs Act and, therefore, the gold biscuits in question were rightly placed under absolute confiscation. 4. I have given careful consideration to the submissions. Ld. SDR was right when she pointed out that the Two-Member Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing 17.100 gms from one of the gold bars and issued the same to one Shri Ravindran of Tirunelveli for making Vangi ring. He left behind four gold bars and retained the duty-paying documents with him. He told his partners that the duty-paying documents for the gold biscuits were with him. He then rushed to Theni and returned to Tirunelveli on 26-8-1994. Again, on 27-8-1994, he rushed to Guruvayur where Shri Shahul Hameed delivered the original copy of baggage receipt No. 11616, dated 20-7-1994 of Calicut airport for three gold bars. He returned to Tirunelveli on 4-9-1994 with original copies of the aforesaid two baggage receipts and sent a telegram requesting for return of the seized gold. Shri A.T. Shahul Hameed of Guruvayur was authorized by the two passengers (named in the above two baggage receipts) to sell the gold biscuits which were cleared by them on payment of duty. Thus Shri Gomathinayagam, in his petition dated 9-9-1994, claimed to have established nexus between the seized gold and the gold imported and cleared on payment of duty by the two passengers through Calicut and Trivandrum airports. In his statement dated 21-9-1994, Shri Gomathinayagam stated inter alia that h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Shri Periyadathu Mohideen and Shri Viswanath Inderjith. It has been argued that it was enough for the appellants to establish such preponderance of probability to discharge their burden of proof under Section 123 of the Customs Act. In this connection, the Ld. Counsel has relied on the High Court s judgment in the case of Poonam Chand Maluk Chand Shah (supra) and the Supreme Court s judgment in the case of P.N. Krishna Lal Ors. (supra). There is no quarrel about the requirement under Section 123 ibid. It is settled law that, in relation to goods notified under Section 123, it is open to a person from whose possession such goods of foreign origin have been recovered, to establish through a preponderance of probability that the goods are not smuggled ones. 7. The question now to be addressed is whether, on the evidence in this case, it can be held that the appellants have established a preponderance of probability of the four foreign gold biscuits having been lawfully imported and not having been smuggled. Admittedly, the appellants were partners. In his statement, one partner Shri Gomathinayagam claimed that he had told his partners on 24-8-1994 itself that he was retaining th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 10-5-1993 as well as the Calcutta High Court s decision in Uma Shankar Verma case. It has been argued that, where the goods are not prohibited, they could be allowed to be redeemed on payment of a fine and, if the goods are not prohibited, such redemption is not permissible. On the other hand, Ld. Counsel has argued that, having regard to the liberal policy of the Government in relation to import of gold, redemption could be allowed in respect of smuggled gold. He has also claimed support from case law. It appears, the lower authorities did not examine the redeemability of the gold biscuits in question. Hence, I am of the view that this aspect of the case needs to be looked into by the original authority. 9. In the result, the order of confiscation (not absolute) of the gold biscuits in question is upheld and the penalties imposed on the appellants are sustained to the extent of Rs. 5,000/- each. The question whether the gold biscuits could be allowed to be redeemed against payment of appropriate redemption fine is remanded to the original authority for adjudication in accordance with law (including case law) and the principles of natural justice. 10. The appeals are di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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