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TMI Blog2002 (9) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, the burden of proof lies on the person who possesses the gold & they would like to make further investigation; the Police Inspector informed them that the seized property shall be handed over to the Customs Department, after obtaining the court's permission as Shri D.S. Srinivas was arrested for a case registered under Section 41D read with Section 102 of CrPC and produced before VI Addl. Metropolitan Magistrate and was released on bail. Meanwhile it was also brought on record by the Advocate for the appellants that the said gold had been claimed by M/s. Seethal Jewellers as received from Indian Overseas Bank, by an application made to the Magistrate. 2. Enquiries were thereafter conducted, a show-cause notice was issued to Shri D.S. Srinivas, Shri Lakhanraj, Proprietor of M/s. Seethal Jewellers and one Shri D. Prakash Chand, Proprietor of M/s. Prakash Jewellers asking them to show cause, why the gold in question should not be confiscated and penalties imposed on them. After hearing the appellants and considering their submissions, the Commissioner held, as regards the liability of the absolute confiscation of 49 foreign marked gold biscuits under the provisions of Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bars on a later date and by enquiry from his office staff known that gold bars bought from Canara Bank were kept by Shri Prakash Chand and this fact could have been deposed during any recording of statement or even vide a letter, before Customs authorities after investigation made him aware on 21-4-98 of the fact that seized gold was not covered by documents submitted till date. Hence it is very clear that Shri Lakhanraj of M/s. Sheetal Jewellers was trying to dispose of smuggled gold bars through Shri D.S. Srinivas who was caught by the police official around 2.30 PM on 12-3-98. This fact of timing is also corroborated by the statement of Shri B.H. Srinivasmurthy of M/s. Rajat Jewellers who has deposed that Shri D.S. Srinivas had sold him one 10 Tola gold biscuits of "SWISS BANK CORPORATION" marking around 1.30 PM. When Shri D.S. Srinivas was caught, Shri Lakhanraj produced the available legal document with him to prove legitimacy of the seized gold in form of Bill of Entry and purchase invoice from IOB, Bangalore. These documents were proved to be not pertaining to the seized gold by investigation on the basis of markings on the seized gold bars and gold bars sold by IOB, Bangalo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign marked gold biscuits is liable to confiscation under Section 119 of the Customs Act, 1962. (M) Shri Lakhanraj, Shri D.S. Srinivas and Shri Prakash Chand have vide their replies and during the personal hearing stressed on the time factor. They have argued and stressed the fact that Shri Prakash Chand had taken delivery of "SWISS BANK CORPORATION" marked gold bars from Canara Bank, Bangalore at Air Cargo Complex at 1.45 PM and handed over the gold to M/s. Sheetal Jewellers at 2.00 PM. Part of this consignment was handed over to Shri D.S. Srinivas who was caught at 3.45 PM by police officials. But I am not at all considering documents submitted on 7-5-98 as evidence for the reasons very clearly explained in Para 28(I) of this order. As these documents are not relied upon, the statements and occurrences on record show very clearly that seized gold bars are smuggled into India and are liable for confiscation. As attempt had been made to legitimise the gold import by producing a duty paid document (i.e. Bill of Entry No. 16354, dt. 10-3-98 filed by Canara Bank) at a later date which does not fit in, in view of the statements made and explained in findings vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n from the Police Inspector Ulsoor Gate Police Station vide a letter dated 12-3-98 intimating the seizure of gold biscuits seized from Shri D.S. Srinivas and only thereafter they visited the said police station and made enquiries about the seized gold. They have drawn a separate Mahazar and conducted independent investigations and recorded the statements. Therefore, we find that this is not a case of seizure made by police and its transfer to Customs. It is a case of fresh seizure by the customs authorities who after making detailed enquiries have entertained a belief to seize the gold. Therefore, the provisions of Section 123 of Customs Act are very clearly applicable in the facts of this case and the burden of proof as per this Section would shift on the person from whose possession the gold has been seized or and any other person who claims the gold thereof. The law as settled by the Supreme Court in the case of Gian Chand - 1983 (13) E.L.T. 1365 (S.C.) and Others will not come to the rescue of the appellants herein. Similarly other case law also does not help them. (b) The appellants herein, including Shri Lakhanraj has explained the gold, found and sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... canvassed, that Shri Lakhanraj would not remember/forget the facts, when he went to the Police Station. The fact of the gold being part of a consignment from Canara Bank, received with the assistance of his friend Shri Prakash Chand would be fresh in his mind, if the belated version is true. A gold dealer in normal course would have immediately correlated 50 bars, out of so many other bars having received from Canara Bank on the very same date, not even a few hours before the seizure was effected by the Police. How and why he should not do so cannot be explained naively as is being made out on behalf of Shri Lakhanraj. If the gold found with Shri D.S. Srinivas was the part of the lot received from Canara Bank and brought by his friend Shri Prakash Chand from the Customs and Bank at about 1.30 PM to 2.00 pm. Then in the normal course that would have been the first explanation/claim of Shri Lakhanraj. Thus we concur with the learned Commissioner's finding, that the claim of the seized gold to be part of the consignment received from Canara Bank was an afterthought and is not a fact. Since, Shri D.S. Srinivas and Shri Lakhanraj have failed to satisfactorily account for the possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that action has not been taken against Shri Srinivas Murthy cannot dilute the value of his statement as regards the consideration of Rs. 47,150/- as sale price, for the receipt of 50th biscuit, at about 1.30 PM on 12-3-98 and the fact of Shri D.S. Srinivas having given the same from 50 biscuits given to him by Shri Lakhanraj before 1.30 PM on 12-3-98. (e) When we find that 49 biscuits are liable for confiscation and we are upholding the confiscation, we find that Shri D.S. Srinivas having indulged in acquiring possession of and on disposing of smuggled gold and Shri Lakhanraj of having supplied the said smuggled gold to Shri Srinivas, we find both of them liable for penalty under Section 112(b) as arrived at by the learned Adjudicator. We find no reasons to interfere with the penalty imposed. (f) As regards the penalty on Shri Prakash Chand, on the charge of giving a false statement and attempting to legitimise the smuggled gold bars for the reasons as arrived at by the Commissioner extracted herein above, to find him liable for penalty under Section 112B(ii) of the Customs Act, 1962, cannot be upheld by us. The penalty on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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