TMI Blog2024 (4) TMI 699X X X X Extracts X X X X X X X X Extracts X X X X ..... rity of gold was found 99.5%. Although the gold is having a foreign markings that does not establish that the gold is foreign gold as the foreign marking gold contains purity of 99.9%. In that circumstances, the Revenue has failed to make the reason to believe that the gold in question is smuggled in nature. Applicability of provisions of Section 123 of the Customs Act, 1962 - HELD THAT:- As the purity of gold was 99.5%, although there is an inscription of gold being of foreign origin, which does not establish that the gold in question is of smuggled in nature. Moreover, one of the gold bar is having marked as MMTC PAMP that the gold bar cannot be of foreign origin and smuggled one, which itself breaks the case of the Revenue. The Revenue is also relying the marking of MMTC PAMP Indian marks, therefore, how can it be alleged that the gold in question is of foreign origin and smuggled one, therefore, the Revenue has failed to make out a case of reasonable belief that the gold in question is smuggled one. Consequently, the provisions of Section 123 of the Customs Act, 1962 are applicable to the facts of the case. Admissibility of statements - HELD THAT:- The case of the Revenue is ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has stated that such gold bars were handed over to him by Mr.Sonu Tewari on the instruction of Shri Neeraj Agarwal, the Appellant No.(1), who deals in foreign origin gold and he purchased the gold from Kolkata and sold the same at Mirzapur, Varanasi Delhi. The Appellant No.(1) also owned a jewellary shop and cinema hall. To unearth the entire racket, the Appellant No.(2) was arrested on 19.06.2016 and was produced before CJM, Burdwan. Thereafter, the seized gold were sent to Chemical Examiner, CRCL, to check the purity of seized gold bars. On behalf of the Appellant No.(2), three cash memos were produced before the CJM on 30.06.2016 issued by M/s Rajshree Jewellers, Banshi Bazar, Mirzapur duly signed by the Appellant No.(1), whose details are as follows : (i) Cash Memo No.38 dated 23.10.1999 in the name of Vijay Kumar Bind, Mirzapur for sale of 2 kgs. gold valued at Rs.8,79,600/- ; (ii) Cash Memo No.36 dated 29.07.1998 in the name of Gulamabar, Mirzapur for sale of 2 kgs. gold valued at Rs.8,70,406/ ; (iii) Cash Memo No.05 dated 11.05.1998 in the name of Makkan Lal Bind, Mirzapur for sale of 1 kgs. gold valued at Rs.4,97,656/-. 2.1 During the course of Inquiry, summon was issued t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... go, the Appellant No.(2) came to him to sell 5 kgs. gold and produced three photocopies of invoices, but he refused to purchase the same in absence of original invoices and as a result, the Appellant No.(2) went back. 2.5 Further, on conclusion of the Inquiry, a show-cause notice was issued to the Appellants, why 5 kgs. of gold bars of foreign origin, should not be confiscated under Section 111 of the Customs Act, 1962 and penalties should not be imposed on the Appellants under Section 112 of the Customs Act, 1962. 2.6 The Revenue alleged that the Appellants have failed to submit the documents of procurement of gold bars of foreign origin at the time of seizure in terms of Section 123 of the Customs Act, 1962. Thereafter, the gold in question is liable for absolutely confiscation and consequently, penalties are also imposable on the Appellants. 2.7 The matters were adjudicated. The gold in question was absolutely confiscated. Penalty on the Appellant No.(1) was imposed to the tune of Rs.20.00 lakhs and for the remaining Appellants, penalties were imposed to the tune of Rs.10.00 lakhs each. 2.8 Aggrieved from the above orders, the Appellants are before us. 3. The ld.Counsel appearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ELT 622 ; (iii) CC, (Prev.), Kolkata Vs. Monoranjan Banik : 2004 (165) ELT 237. 3.2 It is his contention that the Revenue has built up its case only on the ground that the seized gold contains marking which belongs to a foreign country, hence the seized gold was of foreign origin and smuggled one whereas mere markings cannot be taken as a proof of the gold of foreign origin because markings and labels are only hearsay evidence as held in the case of State of Maharashtra Vs. Prithviraj Pokhraj Jain reported in 2000 (126) ELT 180 (Bombay). 3.3 He further submits that at the time of filing the Bail Application, the Appellants have produced the copies of cash memos to establish the licit possession of the gold at the first available opportunity before CJM but the said evidence has been ignored by the Adjudicating Authority, which cannot be ignored. To support his contention, he relies on the following judgments : (i) Krishnakumar Dhandhania : 2007 (219) ELT 736 (Tri.- Kol.) ; (ii) CC Vs. Golak Chandra Kamila : 2006 (205) ELT 665 ; (iii) S.K.Chains Vs. CC, Mumbai : 2001 (127) ELT 415. 3.4 He further submitted that the Revenue relies only on the oral evidence i.e. the statement of the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 06.09.2021 ; (vi) Nand Kishore Modi Vs. Commissioner of Customs (Preventive), West Bengal : 2015 (325) ELT 781 ; (vii) Rajesh Pawar Vs. Union of India : 2014 (309) ELT 600 (Cal.) ; (viii) Commissioner of Customs (Prev.), Kolkata Vs.Ashok Kumar Agarwal : 2017 (348) ELT 555 (Tri.-Kolkata). 3.8 He further submitted that the case of the Revenue is only on the basis of statements made by the Appellant No.(2) and the same was retracted by the Appellant No.(2) from the first opportunity. Therefore, the said statements does not have any evidentiary values in the eyes of law when the documentary evidence was contradictory to such statement , which proves that the statement was recorded under duress. To support his contention, he relies on the following judgements : (i) Saakeen Alloys Private Limited : 2014 (308) ELT 655 (Guj.) ; (ii) Union of India Vs. Kisan Ratan Singh : 2020 (372) ELT 714 (Bombay). 3.9 Therefore, he prays that the impugned order is to be set aside and the gold in question be released to the appellants. 4. On the other hand, the ld.A.R. for the Revenue supported the impugned order and denied the genuineness of the invoices produced by the appellants by saying that o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd alone, the gold is required to be released to the appellants unless contrary is proved by the Revenue, but nothing contrary have been proved by the Revenue. In that circumstances, on this ground alone, the gold is not liable to be confiscated. 10. We find that during the course of investigation, Panchanama was drawn and in Panchanama while seizing the gold, some papers were also recovered from the possession of the Appellant No. (2), but the details of those papers were neither supplied or mentioned in the Panchanama nor recorded in the relied upon documents. 11. On the other hand, the claim of the appellants is that those same papers were the photo copies of the invoices of procurement of gold by the appellants from the Appellant No.(1), who is the seller of gold to the Appellant Nos.(2), (3) (4) and the Appellant No.(1) has also admitted the facts that he has issued invoices in question of procurement of the impugned gold. In that circumstances, unless and until, the contrary is proved, the evidence produced by the appellants is admissible. 12. We further take note of the fact that as per the examination report of CRCL, the purity of gold was found 99.5%. Although the gold is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer who effected a seizure, was reasonable or not, the court was not sitting in appeal over the decision of the said officer. All that it could consider was whether there was any ground which prima facie justified a reasonable belief. That the officer had reasonable belief must be stated in the notice to show cause. It must be adjudicated upon by the authorities under the Act. At the stage of appeal or revision from the orders of the officer adjudging confiscation each successive appellate or revisional authority has also to address itself to this requirement of reasonable belief. The seizing officer either by his own evidence or other materials placed before the adjudicating authority, has to prove to its satisfaction that there was ground for him to reasonably believe that the goods were smuggled goods, that is to say that the goods were imported into the country and imported at a time and place when they were restricted or prohibited from being imported. If the adjudicating authority is not satisfied that the goods were seized on a reasonable belief Section 123 cannot be invoked and in that event it would be for the customs authorities to prove that the goods were smuggled an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there was a reasonable belief in the mind of the seizing officer that the goods were smuggled goods. It does not appear to me that he had entertained any reasonable belief at the time of seizure. Neither the board on appeal, nor the Central Government applied their mind to this question. Two reasons : 57 . Applying the principles of these cases to the facts of the present case what do we find? Two reasons were given in support of the reasonable belief. One is that the customs authorities received some information. What is that information? It was never disclosed to the petitioner. Nor was it disclosed to the adjudicating authorities. Very vague words such as `on information received are used in the show cause notice. The information on which the customs authorities act must be definite information. No one suggests that they must disclose the name of the informant. That would be detrimental to investigation and against public interest. The least they can do is to give the gist of the information so that the person from whom the goods are seized knows the nature of the information received by the customs. To hold otherwise would mean that the customs officer can act on any informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble belief could be entertained either on the basis of some external indicia or on the basis of some internal information that the goods had been illegally imported into India from Nepal or some other foreign country either without payment of duty or in contravention of any restriction or prohibition imposed by statute. There was nothing to suggest the foreign origin of the goods. There was nothing to suggest the illegal importation of the goods into the country. 60 . The goods must be smuggled goods. The word `smuggled means that the goods were of foreign origin and they had been imported from abroad. Only then does the presumption under Section 123 arise. The goods themselves did not suggest that the petitioner was an old smuggler or a dealer in smuggled goods. If there was such information with the customs, they ought to have disclosed it. The goods themselves did not suggest any illicit importation. Nor was there any inscription on the goods which could be the basis of the reasonable belief that the goods were of foreign origin. There was nothing in the appearance of the goods to suggest that they had been newly manufactured and brought into this country very recently from anot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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