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TMI Blog2023 (10) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... uty free imported gold into domestic market for sale. Shri Prem Sagar Arora was also Partner of another firm M/s Mine O Gold engaged in trading of gold, jewellery and export of gold jewellery. 3. Search was conducted at the residential and factory premises of Shri Prem Sagar Arora, and more than 25kgs gold and jewellery items and cash amounting to Rs.20,00,000/- were found. During investigation, modus operandi of Shri Prem Sagar Arora was revealed as follows whereby he misused the EOU Scheme:- a) M/s Mahalaxmi Jewel Export imported duty-free gold from UAE on FOC basis or outright basis for the purpose of manufacture of gold jewellery to re-export to UAE based supplier. b) Shri Prem Sagar Arora also opened a Shell Firm in Dubai called M/s Al Rabiha Jewellery Trading by promising hefty salary to one Mr Vishal Kumar. c) Prem Sagar Arora started mixing copper in gold jewellery and started exporting it by misdeclaring it as pure gold jewellery to fulfil his export obligation against the import of duty free gold. M/s Mahalaxmi Jewel Exports employees namely Shri Amit Kumar, Shri Sahib Kumar Bala, Ajay Dubey, Bharat Kashyap, Omendra Singh, Chitanjan and Vishnu Dutt also admitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvoices; and Serial number was erased by him because as he regularly cut the gold to sell small pieces to various customers. 8. DRI procured Call Detail Records of Shri Saurabh Arora, which showed that he was in regular contact with the Appellant. In the Show Cause Notice, it is mentioned that Prem Sagar Arora was asked about the CDR and he stated that he would direct his son Saurabh Arora to follow up with the Appellant for payment of diverted gold. 9. Accordingly, Show Cause Notice was issued proposing confiscation of seized gold under Section 111, currency under Section 121 as sale proceeds of smuggled gold and penalty under Section 112(b) on M/s Mahalaxmi Jewel Exports, Shri Prem Sagar Arora, M/s Mine O Gold and the Appellant. 10. The impugned order confirmed all the allegations of the Show Cause Notice against all Noticees, hence the present appeal is filed before the Tribunal. However, the present appeal is limited only to the Appellant Shri Anshul Jain. 11. Dr. Anup Kumar Srivastava and Shri Rahul Raheja, learned Counsel for the appellant state that the case against the appellant has been made on the basis of assumptions and presumptions and there is not an iota of evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dian Evidence Act, 1872, clearly sets out the sequence of evidence, in which evidence-in-chief has to precede cross-examination, and cross-examination has to precede re-examination. 14. It is only, therefore,- (i) after the person whose statement has already been recorded before a Gazetted Central Excise officer is examined as a witness before the adjudicating authority, and (ii) the adjudicating authority arrives at a conclusion, for reasons to be recorded in writing, that the statement deserves to be admitted in evidence, that the question of offering the witness to the assessee, for cross-examination, can arise. The following orders of the Tribunal also support the same:- * H S Chadha vs Commissioner of Customs (Prev) Delhi 2020 SCCOnline CESTAT 8, affirmed by Hon'ble Supreme Court vide order dated 14.02.2023 in Civil Appeal Diary No 28951 of 2020. * Kudrat Corporation vs Commissioner of Customs Ahmedabad 2020(7) TMI 705 * Anil Gadodia vs Commissioner of Customs (Preventive) Delhi 2020(4)TMI 82 * Linear Technologies vs Commissioner of Customs (Preventive) Delhi 2022 (9) TMI 1131 held that "Undisputedly, the process prescribed under Section 138B was not followed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence to the fact that he would ask his son Saurabh Arora to follow up with the Appellant regarding payments of diverted gold, is based purely on presumption and assumption as none of the four statements of Prem Sagar Arora have any question about calls between Saurabh Arora and the Appellant, or that he ever asked his son to talk to the Appellant regarding payments. Ld Counsel further states that there has been no investigation by DRI from Saurabh Arora or the Appellant regarding the calls. He also states that since Saurabh Arora has not been made a Noticee, it was incorrect on the part of the Appellant to be made a Noticee. 18. Ld. Counsel states that the gold confiscated from the Appellant had marking of "VALCAMBI SUISSE 995", which is different from the bars imported by Prem Sagar Arora in B/E No 10240 dated 01.12.2016 and B/E No 8974 dtd 02.10.2016 as these had Country of Origin as UAE. Also, DRI has not recovered any gold bar with marking "VALCAMBI SUISSE" during searches at the residence or factory of M/s Mahalaxmi Jewel Exports. This shows that the seized gold is not similar in any manner to the gold imported or allegedly diverted by Prem Sagar Arora. 19. Ld Counsel furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewel Export. Ld Counsel states that the appellant's statement clearly shows that he purchased foreign origin gold from many people like Saurabh and M/s Somya Bullion, NTS, Global, P C Gold etc and the seized 1kg gold bar was probably bought by RTGS from M/s Somya Bullion, and that Serial number of the seized gold bar was erased by him because he regularly cuts gold to sell small pieces to various customers. Ld. Counsel states that this statement clearly reflects that there is nothing incriminating in the Appellant's statement regarding any commercial dealing with Prem Sagar Arora and that the seized gold and cash was illegally seized by DRI as it was legally acquired and duly reflected in his Books of Accounts.. 21. Ld. Counsel states that the Appellant has satisfied the requirement of Section 123 of the Customs Act as proper Invoice, Cash Ledger, Stock Ledger, Balance Sheet, Books of Accounts etc were submitted to the Department showing legitimate acquisition of gold which was never challenged and his statement also reflects the same. Various statements also show that he was not associated with M/s Mahalaxmi Jewel Exports in any manner, nor did he have any commercial dealings wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bullion & Jewellers, Cash Ledger, Stock Ledger, Balance Sheet and Trial Balance showing legal acquisition and ownership of the gold and cash. The Appellant's Stock Ledger clearly showed that he had 1218.255 grams of gold on 19.12.2016 from which DRI seized 1kg gold bar. The Cash Ledger, Balance Sheet and Trial Balance also clearly show that the appellant had Rs.44,33,223/- in his Books of Accounts as "Cash in Hand" on 19.12.2016 from which DRI seized Rs.41,75,000/-. It is also reflected in his Books of accounts that he had more than Rs.1,95,00,000/- when demonetisation was announced and that he had deposited more than Rs.1,50,00,000/- in the bank since then. We also find that neither it is unusual, nor illegal for a jeweller to have this amount of cash, especially if it is duly accounted in his Books of Accounts. We also find that two days later, the Appellant reiterated his documentary evidences regarding legitimate ownership of the seized gold and cash. He did not admit to any wrongdoing, nor did he say that he was involved in buying diverted duty free gold from M/s Mahalaxmi Jewel Exports. Infact, the appellant's Ledger shows absence of any sale-purchase with Prem Sagar Arora. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra. 31. We also hold that in absence of Prem Sagar Arora's examination by the adjudicating authority, his statement cannot be relied upon for passing the impugned order against the appellant, more so since the Appellant had requested for his cross examination, as it does not adhere to the tenets of Section 138B Customs Act, as held by G-Tech Industries (supra), H S Chadha (supra), Kudrat Corporation (supra), Anil Gadodia(supra), Linear Technologies(supra), Mittal Pigments(supra), Karim Jaria(supra) and Joginder Kumar(supra). 32. We also find force in the submission of the learned Counsel for the Appellant that without any corroboratory evidence or any other proof, a sole statement of co-noticee cannot be the only basis to impose penalty or to allege any mala fide on the Appellant, as held by Surinder Kumar Khanna (supra), Shakil Ahmed Khan(supra), Sushil Kumar Kanodia(supra) and Mahabir Prasad (supra). 33. Therefore, in view of the above discussions and decisions cited supra, there can be no confiscation of the seized gold bar and currency under the Customs Act, 1962 and it is accordingly quashed. Imposition of penalty on the Appellant is also untenable and is set aside. Since t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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