TMI Blog2019 (3) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... who initiated action on the basis of the seizure and the recorded statements of the detained persons. The mere fact that the interception and seizure was not affected in an international border or near an airport or seaport is irrelevant, since the statements of the intercepted persons clearly indicate that they were asked to avoid such means of transport and stick to the normal modes of public transport. The assertion was that the gold found on the two employees were that purchased by the Company at Mumbai; which details are available in the registers maintained by the Company. The stock of refined gold and gold ornaments as seen from the stock register produced at the time of investigation substantially varied from the abstracts of the stock registers produced before this Court, where Om Prakash Khatri approached for anticipatory bail. The explanation offered for the anomalies was that some gold possessed by sales men were not accounted for. This clearly belies the veracity of the registers produced in the course of investigation. The Tribunal was not justified in upsetting the findings of the first appellate authority - appeal allowed. - Cus. Appeal 44/2018, Cus. Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing substantial questions of law, as re-framed by us: i) Was the Tribunal justified in finding that the Department has failed to establish that the seized gold were smuggled goods ? ii) Was the Tribunal justified in quashing the entire order of confiscation ? 5. We heard Sri.Thomas Mathew Nellimoottil, Senior Standing Counsel for the Central Board of Indirect Taxes and Customs appearing for the appellant and Sri.B.R.Tripathi, learned Counsel appearing for the respondents. 6. The Tribunal has, in the impugned order, found that the burden on the Department, to prove that the gold bars and jewellery seized from the two persons apprehended at Vyttila were smuggled gold; was not discharged. It is pointed out that under Section 123 of the Act, the burden was entirely on the Department to prove that the seized gold was smuggled. It is observed that the gold bars were not of standard size, shape or weight and that there were no markings on it. The ornaments were of 91.6% purity and therefore, cannot be assumed to have been imported; which finding we immediately notice was irrelevant insofar as the first appellate authority having released the ornaments. It is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Keralite, described as a fat and dark person, who handed over the gold bars and pieces. It is also stated by them that the markings in the gold had been removed so as to conceal the identity of the smuggled gold and that the gold was also cut into small pieces and melted. They came to Ernakulam by bus and were intending to sell the ornaments and jewellery in and around Ernakulam as also take back the smuggled gold. But they were intercepted while alighting from a bus at Vyttila, and apprehended by the DRI officials, resulting in the contraband gold being seized. 9. Summons were issued to Khatri and on 06.02.2014, the representative of the Company handed over certain documents, including copies of gold ornaments stock register, refined gold register; along with a covering letter purportedly that of Khatri, but not signed by him, which expressed his inability to appear in person before the DRI. Another summons was issued to him on 07.02.2014, to which also he did not respond. Thereafter, he filed an application for anticipatory bail before the Sessions Court, Ernakulam, which got dismissed. He thereafter approached this Court, and the application was disposed of with a direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lies are seized under the Act under the reasonable belief that they were smuggled goods, the burden of proof as to they were not smuggled goods, shall be on the person from whose possession the goods were seized. As far as gold and watches are concerned, the Section applies directly, and regarding other goods, the Central Government may by notification in the official gazette specify. Hence, the finding of the Tribunal that the burden is on the Department to prove that the gold was smuggled, cannot be accepted. The Tribunal has relied on the decision on D.Bhoormall (supra) to justify that the burden is on the Department. A reading of paragraph 34 of the judgment would be pertinent, where, it is stated that it would be enough, if the Department furnishes prima facie proof of the goods being smuggled stock. A reading of Section 123 also require only a reasonable belief as far as gold is concerned, that it was smuggled. The gold was recovered from the possession of the two individuals intercepted by the DRI, who were not able to give a satisfactory explanation to upset the reasonable belief entertained by the DRI officials who recovered huge quantity of unmarked gold from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that those diamonds were smuggled. 16. In Shah Guman Mal v. State of Andhra Pradesh, 1983 (13) ELT 1631 (SC) , the Hon'ble Supreme Court has held that the Department cannot press into service the presumption arising from Section 123 of the Act, since there was no seizure made under Section 111 of the Act; which is not applicable in the facts of this case. 17. Per contra , Sri.B.R.Tripathi, the learned Counsel appearing for the respondents, submits that there were no foreign markings on the gold and therefore no presumption, whatsoever, could have been drawn regarding the seized gold being smuggled. The onus on the authority to establish that the articles were smuggled was not discharged and the Tribunal was justified in holding that there was no proof in favour of the Department against the carriers so as to proceed against them. 18. We have considered the decisions relied on by both sides and are of the opinion that in case of seizure of gold, even without markings, the burden is upon the person, who has custody of the gold, under Section 123 of the Act, to prove that the gold was legally acquired. The statement recorded under Section 108 of the Act could be safel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to his Company. Then the onus to prove that the gold was not smuggled, so as to upset the reasonable belief entertained by the Department shifted and squarely rested on his shoulders. The gold bars and pieces were subjected to chemical examination which revealed that they were of 99.8% purity. The Tribunal ignored this aspect and referred to the purity of the ornaments; which was not an issue before it. 20. There was a Travel Authorisation Voucher, produced subsequently, before the DRI indicating one of the persons detained having been authorised to carry 4002.33 grams of gold, belonging to Penna Gold Impex; but the actual gold seized was 4430.730 grams. An explanation was offered as to the gold seized included gold released from Nagercovil Court out of which certain ornaments were also made. However the quantity of the gold stated to be handed over by the Company and that released from a Court, as initially stated, further changed in the retraction and later asserted in the reply to the show-cause notice, did not tally. In explaining the exact quantity of the gold as available in the voucher it was also admitted that certain vouchers were subsequently prepared with an earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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