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2015 (12) TMI 588 - CESTAT KOLKATA

2015 (12) TMI 588 - CESTAT KOLKATA - TMI - Seizure of gold biscuits - onus to prove - Smuggling of gold biscuits - Held that:- Appellant has discharged the onus of licit acquisition of foreign marked gold biscuits by producing a bill.It is also observed from the first statement dated 5/9/2000 of Smt. Chhabi Biswas and Shri Joy Gopal Biswas that it was only their belief that said gold biscuits were from Bangladesh. It is also not coming out of the investigation as to how both of them believed tha .....

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nfiscation under Section 125 of the Customs Act, 1962 when appellant has produced legal document of their licit acquisition. Accordingly, it is held that department is not able to establish the smuggled nature of seized foreign marked gold whereas claimant appellant has been able to discharge his burden by providing licit document of the purchase of 60 foreign marked gold biscuits. In the light of liberalized policy of the Central Government it cannot be held that all the foreign marked gold bei .....

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y whom. In the above factual matrix, subsequent statement of Shri Joy Gopal Biswas dt. 22/9/2000 recorded in Judicial Custody was more detailed, authentic and the trail given by Shri Joy Gopal Biswas and Shri Nitya Gopal Biswas was followed by investigation. Shri Laljibhai K. Soni confirmed to have sold the said 60 gold biscuits to the claimant appellant. In view of the above observations made, the findings arrived at by the Adjudicating authority, can only raise strong suspicion about the smugg .....

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ri A. Chakraborty, Advocates For the Respondent : Sri A. Kumar, A.C. (A.R.) ORDER Per Shri H.K. Thakur These appeals have been filed by the appellants against the confiscation of 60 biscuits of gold and imposition of penalties ordered by Commissioner of Customs (Prev.), Kolkata-I under Order-in-Original No. 30/CUS/CCP/WB/2007 dated-19/12/2007. Under this Order-in-Original Adjudicating authority has absolutely confiscated 60 pieces of foreign marked gold biscuits, valued at ₹ 32,04,168/- un .....

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(Consultant) alongwith Shri Arijit Chakraborty (Advocate) appeared for the remaining appellants. 2.1 Shri B.N. Chattopadhyay argued that on the basis of an information Customs officers of Barasat Customs Preventive Unit intercepted one Tata Sumo, having registration No. WB 02J8006 on 5.9.2000 (1830 hrs.) near Doltala and in addition to driver Shri Subodh Das two other persons Smt. Chhabi Biswas & Shri Joy Gopal Biswas were also found sitting in the vehicle. That all these persons belonged to .....

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al dated- 19/12/2007 it is mentioned that Smt. Chhabi Biswas admitted the gold to be of foreign origin but in her statement dated-5/9/2000 on the date of seizure she only stated that 40 gold pieces recovered from her were believed to have come from Bangladesh. That this statement was written by one Shri Chandan Dey who was one of the witnesses of the Panchnama in the present proceedings. That Shri Joy Gopal Biswas also stated in his statement, also written by Chandan Dey, that gold biscuits seiz .....

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s of the vehicle were arrested and another statement dated 22/9/2000 of Shri Joy Gopal Biswas was recorded in judicial custody wherein he deviated from his first statement dated 5/9/2000. That 60 gold biscuits were given to him by the younger brother Shri Nitya Gopal Biswas at 2 p.m. on 5/9/2000 for delivering the same back to him near Sealdah . That on the same day 25/9/2000 Shri Nitya Gopal Biswas filed a claim petition for the seized gold biscuits and that the same were purchased from one Shr .....

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ljibhai K. Soni . That there is no discrepancy in the bill No. 422 dated 29/8/2000 furnished by the appellant and the copy obtained by investigation directly from Ahmedabad and the difference if any is only on account of photocopying of the document. That it has been wrongly observed in the Adjudication order that original of the bill No. 422 dated 29/8/2000 was never produced. Learned Advocate produced the original of this sale bill for verification and made the same available to the A.R. & .....

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ence in weight of gold between quantity, indicated in Bill No. 422 dated- 29/8/2000 and the one determined at the time of seizure, establishes that the bill does not pertain to the seized goods. He relied upon the case laws of this bench in the case of Kapil Deo Prasad Vs. C.C. (P), Patna [2002 (02) LCX 0099] and made the bench go through para 9 of this case law to drive home the point that slight variations in the weight could be weighment errors on the date of seizure as all the seized gold ba .....

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s reflected in accounts maintained by Shri Lalji K. Soni and made the bench go through pages 186 to 197 of the appeal memorandum to highlight that Shri Laljibhai K. Soni has maintained records before and after the date of seizure and sales and purchases are indicated in these records for which payments are made against cheque as well as in cash. That sales made to Shri Nitya Gopal Biswas on page 188 and was not the last entry in the records. That Shri Laljibhai Kr. Soni has sold 4152 TTB- Gold B .....

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ved by the Adjudicating authority that Laljibhai K. Soni does not get any foreign marked gold from Banks and persons who brought gold as baggage when he made his statement reflected in para 26 of the show cause notice dated 2/3/2001. That further details of documents were not asked from Shri Laljibhai K. Soni. That Revenue could have verified other transactions made in the accounts maintained by seller Shri Laljibhai K. Soni to refute the correctness of Bill No. 422 dated 29/8/2000. It was thus .....

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artment. That even if the seized gold is presumed to be smuggled then also option of redemption was required to be given under Section 125 of Customs Act, 1962. 3. Shri N.K. Chowdhury (Advocate) appearing on behalf of his client argued that even if it is presumed that a false/forged bill was issued by Shri Laljibhai Kr. Soni then also any action could be only taken under either IPC or any other violating statute but a penalty under Section 111of the Customs Act, 1962 cannot be imposed as alleged .....

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seized foreign marked gold was smuggled from Bangladesh and there was no document with the appellants regarding licit acquisition of seized gold. That subsequently production of a sale bill from Shri Laljibhai K. Soni of Ahmedabad was only an afterthought and manipulated which has been amply justified by the Adjudicating authority in internal pages 17 to 19 of the Order-in-Original dated 19/12/2007. It was strongly argued by the Learned A.R. that Shri Nitya Gopal Biswas can hardly be considered .....

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ii) Whether penalties are attracted against the appellants in these proceedings under Section 112 of the Customs Act, 1962. 6. It is observed from the case records that Smt. Chhabi Biswas and Shri Joy Gopal Biswas were intercepted on 5/9/2000, moving in a Tata Sumo vehicle near Doltala with 60 foreign marked gold biscuits in their possessions. None of those two persons could furnish any document regarding licit possession of the gold biscuits at the time of interception and the said gold biscuit .....

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t was stated that these 60 gold biscuits were handed over to him by his younger brother Shri Nitya Gopal Biswas. Shri Nitya Gopal Biswas also lodged his claim and produced a purchase bill No. 422 dated-29/8/2000 from one Shri Laljibhai K. Soni, a gold dealer of Ahmedabad. Investigation accepted the statement and followed the Ahmedabad trail by carrying out the investigation at Ahmedabad in detail to refute the claim of Shri Nitya Gopal Biswas. Department never took any initiation to carry out an .....

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established the true nature of origin of 60 foreign marked gold whether smuggled or otherwise. Having not done that the whole effort of the department was concentrated to deflate refute the authenticity of purchase bill No. 422 dated-29/8/2000 produced by claimant Shri Nitya Gopal Biswas. 6.1 Adjudicating authority by his findings recorded on pages 17 to 19 has observed that initial statements of Smt. Chhabi Biswas & Joy Gopal Biswas and investigation done at Ahmedabad established that Bill .....

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. (iii) That particulars of CST/Sales Tax paid by M/s. Laljibhai K. Soni are not appearing on sales bill dated-28/8/2000. (iv) That hand written bill book/computerized accounts are maintained in order to manipulate and manufacture document of dubious nature. (v) That the sale bill dated 28/8/2000 produced by Shri Nitya Gopal Biswas and the one maintained by the supplier Shri Laljibhai K. Soni are distinctly different and details of the gold bars are not mentioned in the registers. 6.2 On the iss .....

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na[2002 (02) LCX 0099]. The arguments and ratio laid are contained in paras 9 & 12 below:- 9. He, further, contended that the Commissioner has observed that there is a discrepancy in the description of the gold in question. Whereas the voucher of M/s. Chauhan Zevares shows that the goods sold to the appellants was T.T. Bars (116.640 foreign marked) , the goods seized by the Officers are gold biscuits weighing 1868.800 gms. and of purity 998.7, 998.8 and 998.9, as certified by the India Gover .....

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regards weight, he submitted that the bar of foreign origin of 10 tolas has a standard weight of 116.640 gms. As such, the total weight of the 16 pieces has been shown as 1866.240 gms. in the sale voucher of M/s. Chauhan Zevares. The difference in weight made by the Customs showing a difference of about two grams, is a human error. Similarly, he submits that all foreign gold biscuits are of a standard purity of 999.00 and the test report of the India Government Mint showing the purity of little .....

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legal purchase of the same from M/s. Chauhan Zevares Pvt. Ltd. and by referring to certain discrepancy in the said document of the seized gold biscuits. However, I find that the discrepancies referred to by the adjudicating authority are not real inasmuch as he has held that whereas the sale voucher shows the goods to be T.T. Bars , the seized gold is biscuit. He has thus observed that such descriptive variation between the biscuits and the bars raises a reasonable doubt regarding the genuinene .....

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a bars weigh 116.640 gms, and as such, the total weight of 16 pieces of biscuits would come to 1866.240 gms, which is reflected in the sale voucher of M/s. Chauhan Zevares. Similarly, it is a matter of common knowledge that the standard purity of gold is 999.00. As such, as rightly contended by the learned consultant, the small variation in the weight or in the purity of gold is attributable to the human error and cannot be made the basis for rejecting the sale voucher of M/s. Chauhan Zevares wh .....

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ere, in any case, purchased by Shri Kapildeo Prasad from the said M/s. Chauhan Zevares Pvt. Ltd. 6.3 The argument taken by Adjudicating authority is that details of sales tax paid and non-existence of signatures of the buyer on the sale bill No. 422 dated- 28/8/2000 are essential to establish the genuine nature of the document. It is observed from the copies of the said bill and the original produced during the course of hearing that particular of sales tax registration number of M/s. Laljibhai .....

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e appeal No.C/88/2008, that Copy at page 198 was argued to have been provided by appellant and copy at page 199 has been obtained by the investigation done at Ahmedabad. Both contain the same details except that top of the copy as available at page 199 is blackened out due to improper photocopying above the words Ornaments Merchant . Signature of the sellers as well as general handwriting of both the documents is also seemingly similar. No opinion of the handwriting expert has been obtained by t .....

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bogus. Such records are maintained for the period prior and after the period when Sale Memo No. 422 datged-29/8/2000 was issued. As many as 4733 pcs. of gold bars are purchased & 4152 are sold by M/s. Laljibhai Kanjibhai Soni in August, 2000 alone. In the light of the above glaring evidences it cannot be said that sale Bill No. 422 dt. 29/8/2000 was created afterwards as a cover up as held by the Adjudicating authority. 6.4 Adjudicating authority in his finding is also giving a finding in t .....

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h gold bars in the present transaction can be held responsible for not mentioning the details of gold markings in the bill. On this issue CESTAT, Mumbai in the case of S.K. Chains Vs. Commr. of Customs (Prev.), Mumbai [2000 (09) LCX 0202] made following observations in para 4 to 7 of this order:- 4. Section 123 of the Act is an exception to the normal rule of the burden being upon the prosecution to establish the guilt of the accused. Ordinarily every element that constitutes the offence has to .....

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ition in the Indian psyche. Gold is the most liquid investment capable of being encashed at any time in any society or locality. Gold is routinely presented to temples and to relatives on ceremonial occasions. It is customary, even mandatory that a bride is given away with gold ornaments. The demand for gold in India is perennial. There was only one gold mine operating at Kolar near Mysore which would produce about 2 tons of gold every year. That has also stopped functioning. The gap between ris .....

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untry was backed fully by the gold held by the Govt. Over the last century the basis and the support for the currency has shifted from Gold reserves to the country's assets. But every Central Bank still keeps a gold reserve called Monetary Reserve. Thus, gold in the hands of the Central Govt. would make the currency strong and conversely the gold in the hands of the public would weaken the currency. To wean away the Indian public from the craze of the gold and also to ensure stability of the .....

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ting it to the Govt. of India Mint. Making of gold of purity higher than 995 was also prohibited since the imported gold generally is of the purity of 999. This prohibition would make it easy to establish the imported character of the gold. The combined effect of all the acts and prohibitions was to prevent smuggling, to make disposal of the smuggled gold difficult and to make it difficult for smugglers to defend themselves. In those days seizure of gold with foreign marking and of purity of 999 .....

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broad were permitted to import 5 kgs. of gold. Gold can also be imported on Special Import Licences. No restrictions were placed upon the disposal of gold so imported on payment of duty. According to official statistics the legal import of gold through these Schemes was of the following magnitude : Year Import of Gold in Metric tones OGL BAGGAGE SIL TOTAL 1996 - 256 42 298 1997 62 398 68 548 1998 532 93 19 644 1999 513 39 18 570 2000 (Up to June) 158 2 1 163 6. As a result of such liberalisation .....

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gage Rules framed under that very Act, there is a flood of foreign marked gold in the town. Such gold changes hands several times on importation. Since the repeal of the Gold (Control) Act in 1968, there is no legal requirement for the buyers and sellers of gold to maintain any registers nor is there any requirement to issue invoices under any Central Act. 6.5 CESTAT, Kolkata in the case of Giridhari Dubey Vs. C.C. (P) , Kolkata [2001 (11) LCX 0215) also made following observations in para 3 (C .....

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the onus under Section 123 has been discharged in the facts of this case by the appellants. If the Revenue wants that the gold dealers indulging in sale and purchase of foreign marked gold in India, should indicate the brand names and that discharge under Section 123 shall be only with respect to each brand then foreign marked gold should have been declared as one of the items under Chapter IVA of the Customs Act. We find that no such notification of placing foreign marked gold exists. Therefor .....

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ere from Bangladesh. It is also not coming out of the investigation as to how both of them believed that gold in their possession was of Bangladesh origin. As already observed trace leading to Joynal, mentioned by Shri Joy Gopal Biswas in his very first statement dated 5/9/2000, was not followed by investigation to establish that seized foreign marked gold biscuits were in fact smuggled into India. Reasonable doubt of smuggled nature of foreign marked gold may be sufficient for the purpose of se .....

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of liberalized policy of the Central Government it cannot be held that all the foreign marked gold being bought and sold in India is of smuggled nature. Retraction of the earlier statement of Shri Joy Gopal Biswas by a second statement, recorded by investigation in judicial custody, has to be seen in the light of Supreme Court case law of Vinod Solanki Vs. U.O.I. [ 2009 (233) ELT 157 (S.C.)]. Hon ble Apex Court made following observations on the issue where retraction can be accepted. 34. A per .....

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sion which has since been retracted, the Court must bear in mind the attending circumstances which would include the time of retraction, the nature thereof, the manner in which such retraction has been made and other relevant factors. Law does not say that the accused has to prove that retraction of confession made by him was because of threat, coercion, etc. but the requirement is that it may appear to the court as such. In the present case the statements of both Smt. Chhabi Biswas and Shri Joy .....

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