2020 (3) TMI 926 - AT - Customs

Appeals overturn seizure of gold bars under Customs Act, Revenue failed to prove illegitimacy

Shri Dinesh Bansal, M/s. Lawat Jewellers Pvt. Ltd., Shri Suresh Kumar Soni, Managing Director Versus Commissioner of Customs (Prev.)

Shri Dinesh Bansal, M/s. Lawat Jewellers Pvt. Ltd., Shri Suresh Kumar Soni, Managing Director Versus Commissioner of Customs (Prev.) - TMI Issues Involved:1. Legitimacy of the seizure and confiscation of 59 gold bars.2. Justification of penalties imposed under Section 112(a) & (b) of the Customs Act.3. Verification of the origin and legal procurement of the gold bars.4. Examination of the evidence and statements provided by the appellants and the officials.Detailed Analysis:1. Legitimacy of the seizure and confiscation of 59 gold bars:The primary issue in these appeals was whether the 59 gold bars seized from the appellant were properly explained under Section 123 of the Customs Act. The Directorate of Revenue Intelligence (DRI) intercepted a vehicle near the Delhi-Haryana border and recovered 59 gold bars marked 'HARMONY, SOUTH AFRICA, 10 TOLAS, 999, FINE GOLD' from it. The gold bars were seized along with the vehicle as the appellant failed to produce any documentary evidence at the time of interception. The appellant later claimed that the gold was purchased from M/s. Lawat Jewellers Pvt. Ltd., Jaipur.2. Justification of penalties imposed under Section 112(a) & (b) of the Customs Act:Penalties were imposed on Shri Dinesh Bansal, Mr. Suresh Soni (Managing Director of Lawat Jewellers Pvt. Ltd.), and Lawat Jewellers Pvt. Ltd. under Section 112(a) & (b) of the Customs Act. The Order-in-Original No. 3/Commr/06 dated 28.04.2006 confirmed the confiscation of the gold bars and the vehicle, and imposed penalties. The Tribunal examined whether the penalties were justified based on the evidence and statements provided.3. Verification of the origin and legal procurement of the gold bars:The appellant claimed that the gold bars were purchased from Lawat Jewellers, who in turn procured them from Corporation Bank, Jaipur. The Managing Director of Lawat Jewellers confirmed the sale and provided sale vouchers and delivery orders from Corporation Bank. However, the DRI's investigation revealed inconsistencies regarding the origin of the gold bars, particularly whether Corporation Bank had Harmony brand gold bars in stock on the date of the alleged transaction.4. Examination of the evidence and statements provided by the appellants and the officials:The Tribunal reviewed statements from various individuals including the driver of the vehicle, the appellant, officials from Lawat Jewellers, and employees of Corporation Bank. The statements indicated that Lawat Jewellers had purchased gold bars from Corporation Bank on 10.09.2002 and delivered 59 bars to the appellant. The bank officials confirmed the sale but later stated that they did not have Harmony brand gold bars in stock during the relevant period. The Tribunal found inconsistencies in the statements of the bank officials, suggesting undue influence by the investigating officers.Conclusion:The Tribunal concluded that the appellant, Shri Dinesh Bansal, had sufficiently demonstrated the legal procurement of the gold bars from Lawat Jewellers, who had purchased them from Corporation Bank. The Tribunal found that the Revenue had not conclusively proven that the seized gold was different from the gold delivered by Corporation Bank. Thus, the appeals were allowed, the confiscation orders were set aside, and the appellants were entitled to the return of the seized gold and vehicle. The penalties imposed under Section 112(a) & (b) of the Customs Act were also overturned.