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TMI Blog2021 (9) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... rsons and 2 Independent witnesses, the Customs Officers recovered 6 Pcs of Yellow metal in rectangular bar form weighing 6000 Gms valued at Rs. 1,86,60,000 and Indian Currency amounting to Rs. 4,09,50,000. At the time of search, the respondent was not present. Since the said 2 persons could not produce any documents in support of acquisition/possession of the yellow metals and Indian Currency under recovery, the Officers seized the said 6 pcs yellow metal which were believed to be Gold of Foreign Origin U/s 110 of the Customs Act 1962 on the reason to believe that the same were smuggled and illicitly imported into India rendering them liable to confiscation U/s 111b and 111d of the Customs Act 1962. The Indian Currency was seized U/s 110 of the Customs Act 1962 on the reasons to believe that the same was the sale proceeds of smuggled gold, being liable to confiscation U/s 121 of the Customs Act 1962. Apart from the aforesaid 6 pcs of yellow metal and the Indian Currency featuring at Sl no 1 and 2 of the search list dated 04/06/2018, other items at Slnos 3, 4, 5 and 6 of the search list were also seized by the officers. 3. Statements of Sri Rajendra Kumar Dhuriya and Sri Vikram Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T returns , Certificate of the Auditor certifying the stock and cash balances in the books of accounts etc. The said Sri Prabhas Kumar Jalan appeared in person in response to Summons on 08/08/2018 before the Officers of the P and I. In his statement Sri Prabhash Kumar Jalan stated inter alia that he was the Proprietor of JalanJewellers of 72 Manohar Das Street, Sonapatty P.O Burrabazar P.S Posta, Kolkata and that he was the rightful owner of the 6 kgs Gold and Indian Currency of Rs. 3,31,50,000 that he did not know Rajendra Kumar Dhuriya or Sri Rinku Verma and Aman Jewellers of Allahabad. The respondent vide his letter dated 22/06/2018 submitted further documents running into 418 pages. By the said documents the respondent supported his claim for release of the Seized Gold and Indian Currency. 6. Six representative samples were drawn from the seized 6 pcs yellow metals believed to be gold of Foreign Origin. On chemical examination by the Chemical Examiner, Customs House, Kolkata it was found that 5 samples were having purity of 99.50% and the rest 1 sample was having purity of 99.60%. 7. As the investigation could not be completed within the mandatory period of 6 months from the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile Indian currency amounting to Rs. 3,31,50,000 was ordered to be absolutely confiscated U/s 121 on the Customs Act 1962. It was also ordered that Indian Currency amounting to Rs. 78,00,000 procured by the respondent from the Noticee 1 Sri Rajendra Kumar Dhuriya to be absolutely confiscated u/s121 of the said Act. The said lower adjudicating authority imposed a penalty of Rs. 2 crores on the respondent u/s 112(b) of the Customs Act 1962 for his act of omission and commission as discussed in the order and also imposed a penalty of Rs. 3.5 crores on the respondent u/s 114AA of the Customs Act 1962. 11. Being aggrieved and dissatisfied with the said Order dated 28/01/2020 passed by the lower adjudicating authority, the respondent filed appeal before the Commissioner Of Customs (Appeals), Customs House, Kolkata u/s 128 of the Customs Act 1962. The Commissioner Of Customs (Appeals) passed the OIA no KOL/CUS(CCP)/AKR/387/2020 dated 07/07/2020 by which he held that absolute confiscation of the 6 pcs of gold bars weighing 6 kgs valued at Rs. 1,86,60,000 and Indian Currency amounting to Rs. 3,31,50,000 is not warranted in the facts and circumstances of the case. He also held that impositi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 123 of the Customs Act 1962 must be raised on acceptable materials. It is therefore imperative that as per Section 123 when there is reasonable formation of belief only then the burden is cast upon the person from whose possession goods have been seized to prove that the seized goods are not smuggled. However the respondent has submitted all the required documents like GST returns, Stock Ledger, Cash book, Purchase register, Sales Register etc in support of his claim that the Gold bars are not smuggled. It was therefore the contention of the Respondent that the presumption under Section 123 of the Customs Act 1962 does not go in favour of the Revenue. 14. Regarding the closing balance shown as 6114.532 gms of Pure Gold which was wrongly mentioned by the Revenue as Pure Silver, the learned advocate for the respondent referred to the Item Register of Gold Bar showing the closing balance of gold as on 04/06/2018 of 6114.532 Pure Gold recorded in the column meant for Closing Quantity of Gold. During argument, the learned advocate for the respondent further submitted that the said closing quantity of Pure Gold included 51.3 gms of Pure Silver shown in the column meant for Inwards Quan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962. 3. The CCA failed to appreciate the fact that out of 269 invoices submitted 206 invoices involved sale of bullion only which are normally purchased by firms engaged in the manufacturing of Jewellery business. Further, all the 206 invoices were raised during the period 02.05.18 to 04.06.18 having transactional value less than Rs. 2,00,000/- in the name of Misc Party without having the name and address of the buyers. It is crystal clear that the modus operandi followed in the instant case is to create hindrance to carry out the investigation as well as an eye wash to carry out illicit transactions. The modus operandi followed goes against the principle of business practice followed as the Assessee in the instant case won't be able to take input tax credit benefit. Further, in the instant case the seized cash amounting to value Rs. 3,31,50,000/- claimed is not as per the cash shown in the cash book i.e. Rs. 3,35,76,215/-. However in the instant case the seized cash is the sale proceeds of the smuggled gold and liable to confiscation u/s 121 of the Customs Act,1962. 4. The CCA failed to appreciate the fact the amount of Rs. 78,00,000/- was recovered from the rented premis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Second ground is concerned, the issue already stands clarified by the respondent as mentioned above. We find that the learned Commissioner (Appeals) has also dwelt on this issue of closing balance of 6114.523 gms of Gold which the Revenue mentioned as Pure Silver instead of Pure Gold. We find from the opening and closing balances of the Item Register of Gold Bar that the respondent mixes a very small quantity of silver with the gold. We also find that Pure Silver of 51.300 gms shown in the Column for Inward quantity of the Item Register for Gold as on 04/06/2018 is matching with the outward quantity of 0.051 kgs as shown in the Pure Silver Item Register on 04/06/2018. Therefore there is no reason to believe or contend that the closing balance of 6114.523 gms as shown in the column meant for Closing Quantity in the Item Register of Gold bar was Pure silver instead of Pure Gold and that the seized gold was not mentioned in the Stock Register (i.e Item Register of Gold Bar). In the instant case we find that the documents i.e Purchase Register, Sales Register, Balance Sheet, Bank Account details etc submitted by the respondent during investigation which were examined/scrutinized by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized cash amount of Rs. 3,31,50,000.00. Therefore it is not understood what the Appellant Revenue wants to say in this regard. When the closing cash balance is greater than seized cash amount and hence covers the seized amount, there cannot be any question raised regarding non accountal of the seized cash amount. 3. In the last part of the third ground it is mentioned that in the instant case the seized cash is the sale proceeds of smuggled gold and liable to confiscation u/s 121 of the Customs Act 1962. But we find that no specific reasons are adduced in support of this. It is an admitted position that the respondent submitted all the documents as and when asked for by the Department. It is also an admitted position that those documents were examined and scrutinized by the department, which revealed that the purchases and sales were under proper tax invoices. It therefore leads us to believe that the Gold bars were not smuggled into the country. It is not established that there were sales of smuggled Gold. The identity of seller and purchaser is also not established by evidence. The respondent has duly accounted for the claimed amount of cash of Rs. 3,31,50,000 by submitting doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00. Respondent was also not present in the premises at the time of search. Rajendra Kumar Dhuriya has stated in his statements as mentioned in Para 6, 11/A and 11/C of the SCN that the said amount of cash belonged to his employer RinkuVerma of Allahabad and that he handed over the said cash Rs. 78,00,000 to M/s Ganesh Jewellers , Kolkata. We find that no investigation has been made regarding Ganesh Jewellers to find corroboration of the statement of Rajendra Kumar Dhuriya. However investigation was done with regard to Sri RinkuVerma and the findings of investigation done by the Varanasi Customs are mentioned in Para 14/D of the Show Cause Notice, from which we find that Sri RinkuVerma stated that he had no business relation with Sri PappuJalan/PrabhashJalan/Praveen Jalan of Ganesh Jewellers, Kolkata or JalanJewellers at 72 Manohar Das Street, Sonapatty , Kolkata. He also denied having any relation with the said recovered amount of Rs. 78,00,000. He specifically denied that he knew any person named Rajendra Kumar Dhuriya. Thus we find that no connection by evidence could be established between the said Rs. 78,00,000 and the respondent Sri Prabhash Kumar Jalan, who was not present at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms (Prev) Kolkata reported in [2016(344) ELT 209 (Tri-KOlkata)] laying down that when the appellants had produced legal documents of the licit acquisition of the foreign origin gold, he can be said to have discharged the burden and the department cannot be said to have established the smuggled nature of the seized foreign origin gold. In the present case, I observe, even at the cost of repetition, that the gold in question was not marked with foreign marking. 14. In the case of Nand Kishore Sumani Vs CCE reported in [2016(333) ELT 448(Tri-Kolkata)] the issue of the gold bars not having foreign markings and no evidence of defacing of foreign origin mark was discussed. Hon'ble Calcutta High Court in the case of Commissioner Of Customs, Excise and Service tax, Siliguri vs Nand Kishore Somani reported in [2016(337) ELT 10(CAL)] observed that foreign origin cannot be established based upon the certificate from a jeweller certifying that the purity of the gold is more than 99.50%. To the same effect is another decision of the Calcutta High Court reported as MadhukarSonabaBhagat Vs. Commissioner Of Customs (Prev), West Bengal [ 2019(368) ELT 990(Tri-Kolkata)]. In the case of Ram Nares ..... X X X X Extracts X X X X X X X X Extracts X X X X
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