TMI Blog2021 (9) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue. As admittedly, the gold having no foreign markings, the onus would be on department to prove the smuggled nature of the same. This onus was not discharged. Moreover, the provisions of Section 138B of the Customs Act have not been complied with and therefore, the sanctity of the statement recorded under section 108 has been lost and consequently, it cannot be conclusively relied upon - Valuer is expected to arrive at the purity and value of the Gold in a scientifically established manner. If his services were required only to value the Gold, the same can be arrived on the basis of day to day Bullion rates announced by various exchanges. In addition, fact remains that the Gold did not have any foreign markings; it has not been established that the same has been smuggled. The circumstances would certainly create reasons to believe that the impugned gold could be a smuggled one necessitating further probe. It does not constitute reasonable belief to seize the goods under Section 123 of the Customs Act, 1962. Confiscation - HELD THAT:- Neither foreign origin of the gold nor the nature of the same being smuggled is conclusively established other than merely relying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent witnesses. 2. Statement of Shri Kishan Kumar Dhuria was recorded under Section 108 of the Customs Act, 1962,on 18.01.2019 wherein he inter-alia stated that he was working for Shri Deepu Mishra alias Shri Sarvendra Kumar Mishra (appellant) of Allahabad; he had departed from Allahabad on 15.01.2019 by Kalka Mail to Kolkata with ₹ 64.42 lakh, which was given by Shri Deepu Mishra, for purchasing and bringing of two gold bars totalling two kgs approximately; on reaching Kolkata, he stayed in Dropadi Dharamsala, where one person came to meet him; after speaking to Shri Deepu Mishra over his mobile phone, and on his direction he handed over the said amount of ₹ 64.42 lakh to that person; the said person gave him two pieces of gold bars (1 kg. each totally weighing 2 kg), not having any marking on the gold bars; no paper of gold bars was given to him at the time of delivery; as directed by Shri Deepu Mishra, he was going to Kanpur to deliver the gold to Mahendraji at Naya Ganj, Kanpur; he has earlier also visited Kolkata three times and had brought foreign origin gold bars for Shri Deepu Mishra of Allahabad; he does not know the name and address of the person who gave h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d bar to M/s Mishra Jewellers; two pieces of gold bars (totally weighing 2 kg) seized from the possession of Shri Kishan Kumar Dhuria was in addition to the gold bar being carried by Shri Ram Bol; Shri Kishan Kumar Dhuria has reached Kolkata on 16.01.2019 and collected the gold bars, whereas the Invoice No. 01230 was issued on 15.01.2019 when Shri Kishan Kumar Dhuria was at Allahabad. Therefore, the gold recovered from the possession of Shri Dhuria is not the same gold as sold vide Invoice No. 01230 issued by M/s Jalan Jewellers; it appeared, three pieces of gold bars were being carried jointly by Shri Kishan Kumar Dhuria and Shri Ram Bol; neither Shri Mishra (the appellant) nor M/s Jalan Jewellers has clarified about the invoice number, mode of payment of the other gold bars being carried jointly by Shri Kishan Kumar Dhuria and Shri Ram Bol and the transactions in respect of earlier visits of sixteen times. 4. Further enquiry by Customs at Allahabad, revealed that the shop of M/s Mishra Jewellers, was lying closed on 24.01.2019; Krishna Kumar Verma (a resident nearby) stated that the premises of M/s Mishra Jewellers had been purchased by one Shri Sarvendra Kumar Mishra about si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his statement recorded under Section 108 of the Customs Act, 1962, that he had gone to Kolkata with cash of ₹ 64.42 lakhs to procure the gold and have also disclosed other trips in the recent past for procurement of gold, on payment of cash and have further stated that no invoice was given to him on delivery of gold under seizure, and further stated that the gold seized by GRP does not have foreign marking, as such markings are erased by the traders at Kolkata to conceal the foreign origin of such gold; on the basis of aforementioned premises, the Customs have formed reasonable belief that the gold was of smuggled nature; therefore, as per Section 123 of the Customs Act, 1962, the onus to prove licit source of gold have shifted on the appellant; had Shri Ram Bol been carrying the purchase document, he would have immediately joined the enquiry, which he did not do; Tribunal, in the case of Nazir Ahmed vs. CC, Lucknow reported at 1998 (101) ELT 667, held that gold bullion found to be high purity, and no documents produced to prove illicit purchase of gold, thus sufficient for reasonable belief to hold that the gold bullion are liable to confiscation under Section 110 of the Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion surely creates an unpleasant situation; point to be noted is that Panch witnesses are Shri Shyam Kumar a labourer and Shri Rakesh Patel driver of the Customs department. He submits that in the case of Ramcharan Soni Vs. Commissioner of Customs (Prev.) Patna reported in 2001 (136) ELT 811 (Tri. Kolkata), this Tribunal held that as regards assay of the gold in question, it is noticed that the same was got done by Shri V.K. Barnwal, a Goldsmith, by touch stone method; Caratage of the gold indicated by him is only approximation and cannot be said to be a definite finding; in a matter where smuggled nature and foreign origin are attributed to the seized gold, it is expected of the Customs Officers to obtain an unassailable assay report from a competent and authoritative agency like Government Mint; it cannot be imagined that the Customs Officers are unaware of this requirement; Yet, they were rest content with the assay report of the local Goldsmith, who failed to express any categorical and definite opinion. He submits. 9. Learned Advocate further submits that the appellant requested the department many times for the cross-examination of the witnesses, but always it was denied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also mentioned. He submits that Hon ble Patna High Court, in the case of CCCE S.T., Patna Vs. Gopal Prasad reported in 2020 (371) ELT 243 (Pat.) held that the Tribunal has given a categorical finding that the respondent No. 1 herein had produced retail invoices of M/s Bhawana International, in order to substantiate his claim that he had purchased two pieces of gold bars from Chandni Chowk, Delhi on 14.4.2014, and on his instructions his brother Chandreshwar Prasad Sah (respondent No. 3) had handed over the gold pieces to Sujeet Kumar (respondent No. 2) for carrying it to Patna to hand it over to Mahavir Prasad, to make gold ornaments in exchange of the said gold. It has also given a finding of fact that the proprietor of M/s. Bhawana International was shown only photograph of the seized gold when he denied that the said gold bars were not sold to respondent No. 1. The retail invoices of M/s. Bhawana International submitted by the respondent No. 1 containing VAT /TIN and PAN were never shown to its proprietor. It is not the case of the appellant that the bill and retail invoices are false and fabricated. 11. Learned Advocate also submits that the department s case is onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing for the Revenue supports the impugned order. 14. Having considered the facts and circumstances, we find that admittedly this is a case of town seizure wherein, the impugned gold was intercepted, initially taken possession of by the officer of GRP and then handed over to the Customs. Admittedly, the gold did not have any tell-tale foreign markings and it was merely accused that the markings were removed to hoodwink investigation. The place where seizure took place is not Customs Area. Hon ble Supreme Court in the case of Gian Chand Ors( Supra), wherein in case of seizure by the Police and thereafter the possession was shifted to the Customs Officer held that the pre-requisite of seizure is not satisfied. Accordingly, it is held that the circumstances as required under the Customs Act are not satisfied and consequentially the whole burden or onus to establish the smuggled nature of gold is on the Revenue. 15. Further, the only evidence relied upon by the Revenue is the statement of Shri Kishan Kumar Dhuria, wherein he stated that the gold may be of foreign origin, as according to his knowledge gold is smuggled through Bangladesh into India, which he received at Kol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusive proof that the gold is of foreign origin and smuggled. 17. We further find that one of the appellants, Shri Sarvendra Kumar Mishra claimed the ownership of impugned gold by letter dated 22-1-2019 and submitted a GST invoice dated 15-01-2019 issued by M/s Jalan Jewellers, Kolkata, in support of licit purchase; payment of ₹ 13,00,000 has been made; ₹ 40,92,946 was adjusted by sale of Gold of 1293.190 gm to M/s Jalan Jewellers, Kolkata and balance of ₹ 9,47,054 was paid on 12-02-2020. Such invoice produced has not been found to be untrue or false by the Revenue. The adjudicating authority has given a finding that the Proprietor ofM/s Jalan Jewellers, Kolkata did not turn up on summons. We fail to understand as to what prevented the officers to search the premises of the same in Kolkata albeit by the officers of Customs in Kolkata. Having not done so, the department cannot wash off their hands just by saying that M/s Jalan Jewellers have not cooperated. We further find that the adjudicating authority finds that the Banking Transactions were not complete; the invoice did not have proper GSTN number and that GST returns were not filed. Staggered payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving documents. Shri Ram Bol was not examined by the officers so as to contradict the claim of the appellants, claiming that he did not present himself before the officers. Considering the seriousness of the charge, it was incumbent upon the department to falsify the claim of the appellants. Shri Sarvendra Kumar Mishra was also not examined claiming that he did not turn up on summons. Examination of these two was crucial to the investigation. Under such circumstances the conclusions drawn by the department are mere conjectures and an allegation of grave nature such as smuggling cannot be established on the basis of conclusions drawn on insufficient investigation. 20. We find that this Bench in the case of Mridul Agarwal Vs CC, Lucknow 2018 (362) E.L.T. 847 (Tri. - All.) held that- 19 . Having considered the rival contentions and after going through the record, we find that Gold is not a prohibited item and can be imported upon payment of duty. Further, it is a case of town seizer and the customs officers have seized the Gold on the suspicion of smuggling, without there being any actual evidence of smuggling. We find that the whole case of revenue is based on the retracted s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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