TMI Blog2024 (1) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... n origin - Once there is an admission by the appellant himself nothing further is required to be proved to the contrary. The Apex Court in SURJEET SINGH CHHABRA VERSUS UNION OF INDIA [ 1996 (10) TMI 106 - SUPREME COURT] held that confession made by the appellant binds him. Reliance is placed on COMMISSIONER OF C. EX., MADRAS VERSUS SYSTEMS COMPONENTS PVT. LTD. [ 2004 (2) TMI 65 - SUPREME COURT] where it has been held that it is a basic and settled law that what has been admitted need not be proved. Onus to proof (shifting burden) - HELD THAT:- On the issue of burden of proof, the submission that gold was entrusted to Amzad Khan and Imran Mullick for delivery to Delhi under proper voucher would shift the burden on the department to prove that it was smuggled gold, the challan issued by the appellant had no sanctity as he could not show the source of procuring the gold. The appellant has not been able to discharge the burden that he has purchased the gold as per the specified sources by the RBI - as per Section 123 of the Act the department was under reasonable belief that it was smuggled gold and therefore the burden was on the appellant being the owner of it to prove that the gold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been held to be liable for confiscation. Once it is found that the gold recovered was not under valid documents, the same would be treated as prohibited goods liable to confiscation and consequently, penalty is inbuilt and is leviable under Section 112 of the Act - Both the appellants were consciously and intentionally dealing with illegal activity of sale purchase of gold and therefore the penalty imposed by the adjudicating authority is justified and needs no interference. Appeal of appellant dismissed. Failure to Impose penalty under Section 114AA of the Act - HELD THAT:- From the perusal of the impugned order, it is found that there is no discussion by the Adjudicating Authority on the proposal of imposing the penalty under Section 114AA. Without stating anything on this issue on merit, it is considered appropriate to remand the matter to the adjudicating authority for limited purpose to consider the said proposal in the light of the facts and circumstances and the legal provisions. The appeal filed by the Revenue is allowed by way of remand. - MS. BINU TAMTA, MEMBER (JUDICIAL) AND MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Shri Rakesh Kumar, Authorised Representative for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gold illegally to Mohd. Wajid in Delhi at the behest of Sh. Suresh Bhonsle. Amjad Khan also referred to certain instances where he alone delivered gold to Mohd. Wajid in Delhi. In respect of the present consignment, both of them stated that on 12.05.2016, Sh. Suresh Bhonsle gave him three packets containing five kgs. of gold to him as well as three packets containing 5 kgs. of gold to Shri Imran Mullick, with two delivery challans of M/s. Buillion Traders, Siliguri for delivery to Mohd. Wajid at Delhi and for this they boarded Brahmaputra mail on 12.05.2016 and reached Old Delhi Railway Station at around 6.3 0 a.m. on 14.05.2016, when they met Mohd. Wajid at 9.40 am. and as soon he handed over a bag, the DRI officers intercepted. 4. Shri Mohd. Wajid in his voluntary statement recorded under Section 108 of the Act on 14.05.2016, stated how he met Shri Suresh Bhonsle in December 2015, at a function in Kathmandu, Nepal, and thereafter Shri Bhonsle called him up to sell 3/4 kgs. of gold through him. He then contacted Mohammed Abid who agreed to sell the gold at Delhi. In his statement, he specifically stated that Sh. Bhonsle had told him that the gold was from outside India. Mohammed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition of penalty under Section 112(b)(i) and Section 112(b) and also under Section 114AA of the Act. On adjudication, the proposal in the show cause notice was affirmed ordering absolute confiscation of the seized gold and penalty was imposed as under:- (iii) I impose under Section 112 (b)(i) of the Customs Act, 1962, a penalty of Rs.75,00,000/- (Rupees Seventy Five Lakh Only) on Shri Suresh Bhonsle S/o Late Jaysingh Bhonsle, partner of Bullion Traders and resident of 86/87, S.S. Market Siliguri (W.B.) which should be recovered from him forthwith. (iv) I impose under Section 112(b) of the Customs Act, 1962, a penalty of Rs.20,00,000/- (Rupees Twenty Lakh only) on Shri Imran Mullick S/o late Shoib Mullick, which should be recovered from him forthwith. (v) I impose under Section 112(b) of the Customs Act, 1962, a penalty of Rs.20,00,000/- (Rupees Twenty Lakh only) on Shri Amjad Khan, S/o late Mohd. Khan, which should be recovered from him forthwith. (vi) I impose under Section 112(b) of the Customs Act, 1962, a penalty of Rs.5,00,000/- (Rupees Five Lakh only) on Mohd. Wajid @ Bunty, S/o Shri Saddik Ahmad, which should be recovered from him forthwith. (vii) I impose under Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw on the issue of import of gold. On the issue of penalty under Section 112(b), he submitted that the gold was seized of which the appellant was the owner but he could not produce any evidentiary document showing that the gold was acquired legally. Referring to the provisions of Section 114 AA of the Act, Shri Rakesh Kumar submitted that the present case was of creating false/fake documents to mask the smuggled gold which was transported to Delhi. 13. Over the period, the law on the subject relating to import of gold is well settled by catena of decisions interpreting the statutory provisions, particularly the definition of prohibited goods under Section 2(33), dutiable goods under Section 2(14) and smuggling as defined under Section 2(39) of the Act read with Section 111 providing for various circumstances under which confiscation can be made, Section 110A and read with Section 125 for provisional release on payment of redemption fine and Section 123 requiring the burden of proof to be discharged by the person in possession or owner of the seized goods that they are not smuggled goods. 14. On examining the facts of the present case, we find that there is no dispute that huge quan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C) where it has been held that it is a basic and settled law that what has been admitted need not be proved. 16. On the issue of burden of proof, the submission that gold was entrusted to Amzad Khan and Imran Mullick for delivery to Delhi under proper voucher would shift the burden on the department to prove that it was smuggled gold, we are of the view that the challan issued by the appellant had no sanctity as he could not show the source of procuring the gold. The appellant has not been able to discharge the burden that he has purchased the gold as per the specified sources by the RBI. There was no record or entry in their stock register of the gold covered by the challans issued. Moreover, the statement of Shri Shyamal Roy, the accountant of M/s Buillion Traders that there had been no transactions of sale-purchase of gold due to strike also corroborates that the delivery of gold under the challans was fraudulent and illegal. In the circumstances, as per Section 123 of the Act the department was under reasonable belief that it was smuggled gold and therefore the burden was on the appellant being the owner of it to prove that the gold seized was not smuggled gold, which remained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of goods under the Act or any other law for the time being in force, it would be considered to be prohibited goods; and (b) this would not include any such goods in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either absolutely or subject to such conditions to be fulfilled before or after clearance, as may be specified in the notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specified in sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods. 12 . Similar issue was raised before the Madras High Court in the case of Malabar Diamond Gallery P. Ltd Vs. Additional Director General, Directorate of Revenue Intelligence, Chennai - 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id down by various DGFT regulations as well as the RBI circular or by the eligible passengers in the manner provided by the relevant regulations as the main object of the Customs Act is to prohibit smuggling of goods and sternly deal with the same as can be gathered on a conjoint reading of Section 2(25),11(2)(c), 111 and 112 of the Act. The concluding para reads as under: 70 . In the foregoing discussion, we answer the issues framed to the effect that Section 2(33) of the Act shall also include importation of such goods within the scope of prohibited category with regard to which the mandatory condition under the Act as also in other relevant notifications/circulars issued by the DGFT, the RBI or any other authority have not been complied with, or in other words the restrictions imposed by the concerned authorities have not been adhered to. We further have no hesitation in holding that the importation of the gold is a prohibited item within the meaning of Section 2(33) of the Act; and that redemption in case of imposition of gold which is brought into India illegally in the form of smuggling does not entitle the owner or importer for automatic release/redemption of such item, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or regulated. A fortiori and in terms of the plain language and intent of Signature Not Verified Digitally Signed By: NEHA Signing Date:21.08.2023 17:00:50 Section 2(33), an import which is effected in violation of a restrictive or regulatory condition would also fall within the net of prohibited goods. 147 . We are further of the considered opinion that the absence of a notification issued under Section 11 of the Act or Section 3(2) of the FTDR would have no material bearing since a restriction on import of gold stands constructed in terms of the FTP and the specific prescriptions forming part of the ITC (HS). Those restrictions which are clearly referable to Section 5 of the FTDR and the relevant provisions of that enactment would clearly be a restriction imposed under a law for the time being in force. Once the concept of prohibited goods is understood to extend to a restrictive or regulatory measure of control, there would exist no justification to discern or discover an embargo erected either in terms of Section 11 of the Act or Section 3(2) of the FTDR. This more so since, for reasons aforenoted, we have already found that the power to prohibit as embodied in those two prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng goods brought from a place outside India shall be liable to confiscation: (b)any goods imported by land or inland water through any route other than a route specified in a notification issued under clause (c) .. (d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force; The factum of recovery of such large quantity of 10 kgs. of gold concealed under the shirt speaks for itself and the appellant being the owner thereof was unable to provide any licit document of procuring the gold, justifies the confiscation under Section 111(b) and 111(d). Taking note of the fact that the appellant had indulged in such illegal gold transactions in the past, the absolute confiscation needs to be affirmed and therefore the gold seized cannot be provisionally released in terms of section 110A read with Section 125 of the Act. The decision in Abdul Razak vs. Union of India, 2012 (275) ELT 300 (Ker.) and in the case of Malabar Diamonds Gallery P. Ltd Addl. Director General, DRI, Chennai 2016 (341) ELT 65(Mad.) has h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts to show that these were not smuggled. Therefore, the presumption is that these are smuggled gold. As discussed above, these coins are liable for confiscation under Section 111(d) of the Customs Act. In Shankar Lal Goyal s case with reference to absolute confiscation, we have observed as : 17.(iii) The issue whether the goods are liable to absolute confiscation has been dealt by the Supreme Court in Union of India Vs. Raj Grow Impex LLP 2021 (377) ELT 145 (SC) and referring to the provisions of section 125 of the Act, it was observed: 69.1 A bare reading of the provision aforesaid makes it evident that a clear distinction is made between prohibited goods and other goods . As has rightly been pointed out, the latter part of section 125 obligates the release of confiscated goods (i.e., other than prohibited goods) against redemption fine but, the earlier part of the provision makes no such compulsion as regards the prohibited goods; and it is left to the discretion of the Adjudicating Authority that it may give an option for payment of fine in lieu of confiscation. It is innate in this provision that if the Adjudicating Authority does not choose to give such an option, the result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 108 is on record and the same is admissible in evidence as per the settled law. Infact the appellant has tried to get out of his confessional statement recorded on 15.07.2016 by submitting a letter through his advocate dated 16.11.2017 to say that he was forced and threatened to give his statement. The retraction sought to be made after one year and five months does not inspire any confidence as it is an afterthought based on legal advice by his counsel and hence needs to be rejected. Reliance is placed on Surjeet singh Chhabra (supra) that confession, though retracted, is an admission and binds the petitioner. 21. Much emphasis has been laid by the appellant on the veracity of the test report by the jewellery appraiser and the request for re-testing. In this regard we find that the appellant had approached the Delhi High Court for re-testing in Writing Petition No. 9174/2017 which was disposed of vide order dated 17.10.2017, granting liberty to the appellant to agitate the issue before the adjudicating authority. As per the common practice, jewellery appraiser is called immediately at the spot and he on the basis of touchstone test ascertain as to whether the metal ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, respectively, the provisions thereof are quoted below : 112. Penalty for improper importation of goods, etc. Any person, (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or (b) who acquires possession of or is in any way 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 under section 111, shall be liable, (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty 216 [not exceeding the value of the goods or five thousand rupees], whichever is the greater; As gold is a restricted item, the same has been treated as prohibited goods in view of the interpretation placed by various decisions on the definition of prohibited goods as defined in Section 2(33) and hence the same have been held to be liable for confiscation. Once it is found that the gold recovered was not under valid documen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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