TMI Blog2021 (8) TMI 1168X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant shri Jitendra Soni. Settled principle of law Suspicion, however strong it may be, it can not replace the facts needs to be applied in this case. Evidences on record are not sufficient to impose penalty on him. Suspicion in this case by Revenue has tried to replace the proof and this has resulted in an erroneous order passed by Adjudicating Authority against Appellant. Circumstantial evidence only is relied upon, unless it is conclusive on the fact of smuggling and Appellant dealt with smuggled goods knowingly, such circumstantial evidences cannot be taken to be the proof of the fact of smuggling for imposing penalty. If revenue wants that gold dealers of foreign marked gold in India should indicate the brand names with respect to each brand then foreign marked gold should have been declared as one of items under Chapter IVA of Customs Act, 1962 - This issue is settled (as revenue has not filed any appeal against above judgments). Thus, there is no requirement under prevailing law to mention brand or marks or numbers of foreign marked gold on sale/purchase documents. Hence, confiscation ordered deserves to be set aside in this case. Confiscation of 100 gms Gold r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onable belief that the same were liable to confiscation under the Customs Act 1962. 2.1 In follow up actions, statements of various persons were recorded by DRI and investigation proceeded on the basis that carriers apprehended with 8 kgs gold gave name of one Jitendra Soni as supplier of Gold and on interrogation the said Jitendra Soni gave names of 3 persons who had delivered said seized Gold. Jitendra Soni stated to have obtained Two Gold Biscuits each of one Kg. (i.e. total 2 Kg.) from Shri Ravibhai of M/s. GopnathBullion, Marchi Pole, Ratan Pole, Ahmedabad, three Gold Biscuits each of one Kg. (i.e. total 3 Kg.) from Shri Virendra Patel of M/s. Jyoti Jewellers, Nr. Abhyuday Bank, Manek Chowk, Ahmedabad, and three Gold Biscuits each of one Kg. (i.e.total 3 Kg.) from Shri Jatinbhai Patel of M/s. Patel Bullion, Ghanchi Ni Pole, Manek Chowk, Ahmedabad.Those 3 persons who appears to have supplied seized 8 kgs gold were identified and interrogated. Their statements are on record of this case, wherein they have denied to have supplied any gold as stated by Jitendra Soni. However, neither any SCN was issued to the said 3 persons nor any action appears initiated by the DRI, Ahmedabad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Society, Near Siddhartha Nagar, Khodiyar Nagar Cross Road, New VIP Road, Vadodara, and; Shri Tushar Soni S/o Shri ThakorbhaiSoni, R/o A-103, Shyam Residency, Nr. R. P. Vasani International School, Nava Naroda Road, Ahmedabad. (v) Shri Jitendra Soni S/o Shri BhanuprasadSoni, R/o 21, Sudarshan Colony, Near Punit Nagar Part-3, Satellite, Ahmedabad, and; Shri Jitendra Soni S/o Shri BhanuprasadSoni, M/s. Jitendra Jewellers, 456, Sankdi Sheri, Nr. Jani Ni Khadki, Opp. Jalaram Farsan, Manek Chowk, Ahmedabad. (vi) Shri Ajesh Patel S/o Shri Amrutbhai Patel, Proprietor of M/s. Patidar Bullion, 1199, Dedka Ni Pole, M.G. Haveli Road, Manek Chowk, Ahmedabad-380001, and; Shri Ajesh Patel S/o Shri Amrutbhai Patel, R/o 21, VrundavanBunglow, Behind JBR Arcade, Science City, Ahmedabad. (vii) Shri Umeshbhai Solanki S/o Shri Kishorbhai Solanki, R/o 7/626, Rambaug Mohalla, Rampura, Lal Darwaja Road, Surat-395003. (viii) Shri Narendrakumar Makwana @ Lalabhai S/o Shri Dahyabhai Makwana, Proprietor of M/s. Bike Point, 7-8-9-10, Krishna Complex, Pandol, Ved Road, Surat-395004, and; Shri Narendrakumar Makwana @ Lalabhai S/o Shri Dahyabhai Makwana, R/o 190/191, Sant Jalaram Society, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 8 kgs Gold. He argued that Penalty u/s 112(b) of Customs Act 1962 requires Mens rea on record, which is not existing in the present case. Hence, the entire penalty deserves to be set aside, in the interest of justice. 4. Shri P.P. Jadeja, Counsel appearing on behalf of Appellant shri Ajesh Patel, while reiterating grounds of Appeal and submissions in synopsis and made during hearing has stated that seized 100 gms Gold from his business premises on 14-09-2016 is out of his legally procured trading stock on that day which is not liable to confiscation; that when said gold came to them, they have recorded its purchase into Books of Account with documents under valid Invoices; that the confiscation of Gold wt. 100 gms is not supported by evidence or reasonable belief that Gold wt. 100 gms is smuggled into India and it is liable to confiscation under of Section 111(d) of the Customs Act 1962. The said 100 gm Gold confiscated was a part of their normal trading stock and it was recorded stock also on date of seizure. This is proved from the stock inventory for the month of September 2016 placed at page No. 213/214 in Appeal wherein it is reflected as stock on 13-06-2016. The gold in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Gold bars are not smuggled goods is on Appellants, which Appellants shri Jitendra B. Soni have not discharged for seized 8 kgs Gold bars and Shri Ajesh Patel for 100 gms Gold bar and hence, confiscation of 8 kgs Gold, 100 gms Gold and also penalty on the Appellants may be upheld. 6. Heard both the sides and perused records. I find that Penalty on both the Appellants was imposed under Section112(b) of Customs Act, 1962 which provides for imposition of penalty on any person who acquires possession or is concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation u/s 111 of the Customs Act 1962. In the present case, I find that investigating DRI officers have booked two different type of cases investigated and covered in a Show Cause Notice and it being a common SCN, adjudicating authority has passed single Order-In-Original covering these two cases. 7. First, I will examine the Appeal No. C/11620/2018-SM filed by the Appellant shri Jitendra Bhanuprasad Soni, who has filed Appeal against penalty of ₹ 25,00,000/- without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht have been smuggled , but he was not aware that it was smuggled only. Further, purchase of such quantity in cash may be for any reason may create doubt and may be objectionable under provisions of Income Tax, but such cash transaction of Gold in India will not make such Gold liable to confiscation under Customs Act 1962. Shri Jitendra Soni acted on commission and delivered seized 8 kgs Gold by taking from traders who were not made noticee in this case and delivered to the persons who had come to take its delivery. However, this statement does not prove that transaction was for smuggled gold which is liable to confiscation. While taking delivery from suppliers to purchasers of 8 kgs Gold it was neither coming out from records that smuggled 8 kgs Gold was delivered to Appellant shri Jitendra B. Soni and he had entered into transaction of 8 Kgs smuggled gold delivered to Shri Nalinbhai and Shri Krunal at his shop as per instruction of Shri ThakorbhaiSoni. The role of shri Jitendra Soni, does not justify such penalty under Section 112(b) of Customs Act 1962. DRI investigation has not brought any evidence except statements to show that Appellant shri Jitendra B Soni dealt with smugg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not liable to confiscation and hence he prays to set aside confiscation of the seized 100 gms Gold bar and penalty of ₹ 25,000/- imposed on him. 9. I find that Shri Ajesh Patel is the proprietor of M/s Patidar Bullion, Ahmedabad and has been engaged in purchase sale of Gold, Silver Bullions. Seized 2 pcs of Gold bar 200 gms are claimed to be out of their stock of inventory of that day i.eon 13/14-09-2016. Appellant Shri Ajesh Patel submitted that they used to purchase gold bars from open market against Invoices and sell such gold pcs under their Invoices. Appellant has produced Stock Register summary from 01-09-2016 to 30-09-2016 and month-wise summary of purchase sales from 01-04-2016 to 31-03-2017 for Gold and showing turnover of gold for September 2016 are available in his Appeal records with copies of Invoices of sale of Gold during month of September 2016, copes of Invoices of purchase of gold during month of September 2016 are also placed in this appeal papers. Thus, Appellant Ajesh Patel has stated that seized 100 gms Gold is from his business premises on 14-09-2016 is out of his legally procured trading stock on that day which is not liable to confiscation. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly Appellant has taken entry of stock in Books of Account for their trading purpose. Thus, it is impossible in normal market practice followed all over India, to know that gold purchased by him from Indian market for sale is gold imported from customs ports or not. I find that O-I-O has confiscated 100 gms Gold which is not liable to confiscation, as impugned O-I-O has not considered stock on date of seizure and not ascertained that the same has been legally received or purchased by shri Ajesh Patel. This is case of town seizure and DRI officers have seized Gold on suspicion of its being smuggled, without adducing evidence of its smuggling. As per section 123 of Customs Act 1962, it provides that when any goods to which section 123 applies are seized on the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods is on person from whom the goods were seized. Foreign marks on Gold may be sufficient for the purpose of seizure, but not for confiscation in adjudication proceedings of such town seizure. When smuggling of seized 100 gms Gold is not proved, in town seizure, confiscation of Gold is not justified. Gold is not a totally prohib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t sufficient for confiscation when appellant has produced legal document of their licit acquisition and that Department 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 purchase of 60 foreign marked gold biscuits, further holding that in the light of liberalized policy of Central Government it cannot be held that all the foreign marked gold being bought and sold in India is of smuggled nature and confiscation and penalties imposed were set aside. The Division Bench of Tribunal in the case of 2001 (127) E.L.T. 415 (Tri.-Mum.) - S.K. Chains v. CC(Preventive), Mumbai wherein seizure of foreign marked gold viz. 33 gold pieces seized from appellant duly recorded in firm s stock register and Gold claimed to have been acquired from a gold dealer firm is not approved holding that burden of proof on appellant discharged in terms of Sections 123 of Customs Act, 1962. [para 9]. Further, it has also been held in that case that admission of purchase of foreign marked gold biscuits from open market without receipt not indicates that gold under seizure is illegally imported, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in facts of this case. Shri Ajesh Patel also submits that by impugned O-I-O one 100 gms gold pc was released unconditionally, but while release the said 100 gm gold bar, customs authorities have unreasonably recovered penalty of ₹ 25,000/- for release of 100 gm Gold, which may be allowed as consequential relief. Shri Ajesh Patel has submitted that Appeal No. C/12079/2018-SMC is against confiscation of 100 gms gold and on mandatory pre-deposit, order is deemed to be stayed. Accordingly, Appellant Shri Ajesh Patel pray to release 100 gms Gold to him and in case, confiscated Gold is disposed off, he may be given proceed equal to market value as on date of release. 12. Ajesh Patel also pray to allow appeal by setting aside order of confiscation of 100 gms Gold and penalty imposed on him, as it is bad in law and deserves to be set aside. Appellant has substantiated that the seized 100 gms gold was out of his stock inventory of legally purchased Gold. Appellant discharged burden of proof u/s 123 of Customs Act 1962 by maintaining normal business daily account with relevant documents of purchase/sale showing Opening Balance + Receipt issue = closing stock, while dealing in Gold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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