TMI Blog2000 (9) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... d at Rs. 10,10,000/- and 26304 gms. of gold chains and Indian currency of Rs. 8,64,000/-. Investigations were made. Statements were recorded. Show Cause Notice was issued alleging liability to confiscation of the foreign marked gold and gold chains weighing 10583 gms. allegedly manufactured out of illegally acquired foreign marked gold. In the Show Cause Notice, Section 123 of the Customs Act, 1962 was invoked. During the investigations and during the hearing before the adjudicating authority, the appellants pleaded that the gold was lawfully acquired during the course of their business. Supporting evidence was produced. The Commissioner did not accept the various pleas made by the appellants. He confiscated the gold and chains absolutely a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the 80s on an average 250 Tons of gold was smuggled into India every year. Any smuggling is bad for the economic health of the country as it would defeat the very purpose behind imposition of restriction on import. The case of gold is more acute. Unchecked smuggling of gold would threaten the very stability of the country's currency. There was a time when the paper currency in the country was backed fully by the gold held by the Govt. Over the last century the basis and the support for the currency has shifted from Gold reserves to the country's assets. But every Central Bank still keeps a gold reserve called Monetary Reserve. Thus, gold in the hands of the Central Govt. would make the currency strong and conversely the gold in the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permitted to import and sell gold. At a later date passengers of Indian origin arriving into India after a prescribed period of stay abroad were permitted to import 5 kgs. of gold. Gold can also be imported on Special Import Licences. No restrictions were placed upon the disposal of gold so imported on payment of duty. According to official statistics the legal import of gold through these Schemes was of the following magnitude : Year Import of Gold in Metric tones OGL BAGGAGE SIL TOTAL 1996 - 256 42 298 1997 62 398 68 548 1998 532 93 19 644 1999 513 39 18 570 2000 158 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Notifications also such benefit was available. Such manufacturers are exempt from licensing controls and are not required to maintain any registers or to issue invoices under the Central Excise Act also. 9.In this background we would examine the discharge of the burden placed upon the Appellants. Shri Kothari in his statement claimed that foreign marked gold under seizure was duly recorded is the firm's stock register. He named two sources of acquisition. One was a gold dealer's firm by the name, Sanghavi Dandrup Devji Co., and the other was one passenger by the name of Dilip Bhulchandani. The representative of the dealers deposed that 33 foreign marked gold pieces were sold by them under four invoices to the Appellants. Although the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isation of the consideration to Shri Bhulchandani does not establish mala fide on behalf of the appellants nor does it establish the smuggled nature of the gold. It is nowhere alleged in the Show Cause Notice that Bhulchandani did not exist or that the baggage receipts under which Bhulchandani had imported the gold was not a genuine baggage receipt. Bhulchandani has not been made a noticee to the Show Cause Notice. Therefore, it has to be held that by proving lawful acquisition, the burden cast upon the appellants has been discharged. 11.Para 8 of the Show Cause Notice raises some questions and doubts about the time lag between the acquisition of the gold and its use for manufacture in the chains. The para speaks of only the gold acquired ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore the statement of Jain does not assist the Revenue. 14.Out of the manufactured gold chains totally weighing 26304.390 gms. gold chains totally weighing 10583.39 gms have been confiscated under Section 111(d) of the Customs Act, also invoking Section 123. The remaining chains totally weighing 15721 gms were released since they were shown in the stock register. As we have observed earlier, in the absence of any requirement of showing the stock of manufactured gold chains, the mere non-entry of the chains would not automatically result in the belief that the unrecorded chains were manufactured out of the gold illegally imported. It is given in the statement of the concerned persons that the chains were manufactured from the gold rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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