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TMI Blog2025 (1) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of M/s. Arvind Kantilal & Co., under Section 112 (b) of the Customs Act, 1962 as he was carrying the above gold for the Angadia firm M/s. Arvind Kantilal & Co. The concurred findings in substance of both the lower authorities are as follows: "I find that the said gold bar of foreign origin was detained by DRI on 16.11.2013 from the premises of an Angadia firm in Ahmedabad for further investigation and during investigation, appellant 1 claimed the ownership of the said gold bar vide their letter dated 26.11.2013. As per Section 123 of the Customs Act, 1962, it is obligatory on the part of the person who is in the possession of the goods or claiming ownership of the seized goods, to prove that the goods are not smuggled goods. In the present case, appellant 1 was required to produce documents evidencing legitimate import of the said gold bars of foreign origin in India. Appellant 1 had produced the copy of Bill of Entry No.327575 dated 20.10.2013 of M/s. Kotak Mahindra Bank Limited, Coimbatore along with a copy of packing list. Appellant 1 has also submitted zerox copy of Invoice No.124 dated 15.11.2013 of M/s. Mahaveer Bullion, Kolhapur indicating sale of 1000 grams gold to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to how two last numbers got erased so as to not remain visible. 3. Department through its A.R on the other hand, denying the burden of proof was discharged and apart from reiterating the findings places reliance on 2022 (380) ELT 205 (Tri. Chennai)-RAVI NAKHAT VS. COMMISSIONER OF CUSTOMS, CHENNAI-II. Specially paragraph 5.7 & 5.8 which are reproduced below: "5.7 Though the appellants contend that they have furnished documents for the purchase of gold and that they have discharged the burden as per Section 123 of the Customs Act, 1962, their contentions do not find merit as the invoices are not free from doubt. Section 123 reads as under :- "Section 123. Burden of proof in certain cases. - (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be - (a) in a case where such seizure is made from the possession of any person, - (i) on the person from whose possession the goods were seized; and (ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not supported by any evidence that Gold Bar wt. 1000 gms is improperly imported into India and in absence of compliance of such requirement, seizure of Gold Bar wt. 1000 gms worth Rs. 31,37,500/- is not justified or sustainable, and confiscation thereof allowing on duty, R/F and Penalty deserves to be vacated or quashed and set aside allowing substantial benefit to the Appellants. 5. The DRI's case is based on general Intelligence[Not specific for the Appellants], interception of Angadia at Ahmedabad Railway station, examination of parcels, detention of goods on 16-11-2013, seizure of goods on 06-05-2014, issuance of SCN on 09-05-2014 and then O-I-O dated 132- 01-2015 and O-I-A dated 08-09- 2015. However, DRI has not recorded statement of any person in this case, though SCN has been issued to 2 parties. Annexure-A to SCN dated 09-05-2014 on page No. 90 in Appeal clearly shows that No statement of anyone is recorded/relied upon. Evidences on record are not sufficient to confiscate gold or impose penalty. Suspicion in this case by Revenue has tried to replace facts, which has resulted in erroneous orders passed by Adjudicating Authority against Appellants. Revenue has not proved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per prevailing Trade practice in market, Gold of 1000 gms were received normally as sale purchase and accordingly Appellant had taken entry of stock in their Books of Account for 995.0 gold in their trading purpose. O-I-O has confiscated 1000 gms Gold which is not liable to confiscation, as it has not considered the fact that gold is legally imported gold received by shri Virendra Patel. This is case of town seizure and DRI seized Gold on suspicion that it is smuggled, without evidence of its smuggling. Foreign marks only on Gold are not sufficient for the confiscation in the adjudication of such town seizure cases. When smuggling of 1000 gms Gold is not proved, in town seizure, confiscation of Gold is not justified. 7.2 O-I-O/O-I-A have not correctly appreciated that entire case is made on erroneous suspicion that since last two digits of gold bar is not clearly visible, it did not tally with serial number mentioned in B/E. Thus, the base of the case and finding by adjudicating authority is incorrect and not having any valid justification. Appellant M/s Jyoti Jewellers also provided copy of packing list with the Bill of Entry and in packing list serial No. AF 9576 to 9600 is men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble under the Customs Act 1962. 8. Decisions relied by Revenue are on different facts and not applicable in this case. Decision 2022 (380) ELT-205 (Tri-Chennai)-Ravi Nakhat Vs Commissioner Customs, Chennai-II produced by the SDR during PH is a case where elaborate investigation was conducted, misdeclaration was established by evidences and statements were also recorded during and gold was confiscated absolutely. Thus, facts of that case & this case under consideration are totally different and not applicable in this case. In such case of 2024 (389) E.L.T. 444 (Cal.)- CC(P) vs Rajendra Kumar Damani @ Raju Damani also is a case wherein during elaborate investigation conducted, misdeclaration was established by evidences and inculpatory statements were also recorded, which were retracted later on during proceedings and gold was confiscated absolutely. Therefore, this case also is on different and it cannot be made applicable in these 2 Appeals by M/s Jyoti Jewellers and Hitesh Pate. Gold is not a totally prohibited item and Gold can be imported upon payment of duty on certain conditions to be followed by concerned importers. For town seizure cases, Appellant has submitted that after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been able to discharge his burden by providing licit document of purchase of 60 foreign marked gold biscuits, further holding that in the light of liberalized policy of Central Government it cannot be held that all the foreign marked gold being bought and sold in India is of smuggled nature and confiscation and penalties imposed were set aside. * The Division Bench of Tribunal in the case of 2001 (127) E.L.T. 415 (Tri.-Mum.) - S.K. Chains v. CC(Preventive), Mumbai wherein seizure of foreign marked gold viz. 33 gold pieces seized from appellant duly recorded in firm's stock register and Gold claimed to have been acquired from a gold dealer firm is not approved holding that burden of proof on appellant discharged in terms of Sections 123 of Customs Act, 1962. [para 9]. Further, it has also been held in that case that admission of purchase of foreign marked gold biscuits from open market without receipt not indicates that gold under seizure is illegally imported, there being no Central Act in existence requiring maintenance of any documents indicating such receipts in terms of Section 110 and 123 of Customs Act, 1962. * In 2002 (149) E.LT. 427 (Tri.-Kolkata) - Girdhari Dubey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Balance Receipt issue closing stock, while dealing in Gold/silver purchased and sold. Thus, confiscation of 1000 gms Gold is not sustainable in facts of this case and deserves to be set aside. 9. Appellant has relied upon various decisions which are part of its submissions. Thus, When O-1-0/0-1-A observe that authorised Importers like MMTC do not provide import documents like Bill of Entry to each such purchaser and hence asking for such import Bill of Entry to prove legitimate import is quite harsh. Revenue should have accepted appellant's clarification and import documents, which they have produced while claiming seized gold during investigation. The allegations in SCN and findings thereon by O-IO/ O-I-A are not correct and not supported by any valid evidence for confiscation of seized gold are on assumptions and presumptions. 0-1-0/O-IA have not correctly appreciated that out of 2 Gold Bars, one was released by DRI in investigation considering the similar documents produced by Appellant. The documents produced by Appellant should have been accepted for gold Bar confiscated as well. Hence, confiscation of Gold Bar is not justified and deserves to be set aside and the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves to be set aside. The Redemption Fine imposed is also not justified and deserves to be set aside as the seized gold bar was not liable to confiscation. Thus, appellants seeks to consider all submissions and to allow appeals with consequential benefits. The appellants have substantiated their cases for justice by setting aside confiscation of gold and duty, R/F and penalty recovered." 11. This Court has considered the facts as well as the legal position submitted by both the sides in this regard. It is clear that at the relevant time, the foreign marked gold was not the prohibited item it was the rather restricted. This is the reason that the same has been released on payment of redemption fine of Rs. 2,00,000/- along with Customs Duty of Rs. 3,23,163/- and the penalty of Rs. 1,00,000/- imposed on the other appellant. While the appellants are not claiming that the gold was not of the foreign origin but they have produced a Bill of Entry of import, the same by Kotak Mahindra Bank and have claimed the purchase, to be legitimate and also duly indicated the same to be reflected in books of accounts and also in the challan while sending and receiving back the gold biscuits from the j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so seen that while releasing the gold biscuits in the form in which it was seized by the department no melting has been directed as per records. The vital question therefore arises that if the gold biscuit was seized in the form in which it was liable to seizure, then why not at the time of ordering its release the same was directed to be released under supervised melting to prevent the possibility of its being resold the market in the form of smuggled gold is removed. Again this Court is of the view that the matching of first two digits in figure running in thousand also by preponderance of probability shows that the gold was not smuggled, as not only last two digits of the tens were found (each lacking of visibility) but also the receipt of its import by Kotak Mahindra Bank was matching with the first two numbers. The Biscuit was very much of Credit Suisse and matching in other details. The probability that a smuggler will be able to procure the documents i.e. Bill of Entry of import by scheduled bank and that too of the same agency of credit to easy and that two of the matching in first to important digits out of four from smuggling channels is rather remote. Therefore, the onus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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