TaxTMI 
TaxTMI 
2007 (3) TMI 648
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....alized u/s 112 of Customs Act, 1962. 3. The relevant facts that arise for consideration are : 3.1 On 5-10-87, the custom officers, on an information, raided the business premises of the appellant and searched his premises. During the search, the officers found besides appellant there were 6 persons, during the search the officers recovered small packets and Indian currency and foreign currency. On verification of the packets, the officers found that the packets were containing polished diamonds of varying carats. Since the appellant and others could not produce any explanation or documents for being in possession of the said diamonds, they were put under seizure. On subsequent follow up action, the residential premises of th....
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....d nature was on the Department and they have not done so. It is his submission that the Customs authorities after raid on the appellant's business/residence premises informed the income tax department about the recovery and seizure of the unaccounted diamonds, which culminated in Income tax department ordering the re-assessment of the return of income filed by the appellant and appellant firm. It is his submission that on such re-assessment, the adjudicating officer of income tax, has held that the appellant had accounted for the said diamonds in the books of accounts during the relevant period and no case is made out against the appellant as regards the suppression of income. He relies upon the adjudication order to press home the point th....
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....nd perused records. Learned Commissioner (Appeals) in the impugned order has held that the diamonds which were seized from the appellant and various persons were not at all accounted by the appellant, did not produce documents like invoices or accounts. I may, read the findings. "In the instant case, though the appellant No. 1 claims that the diamonds were purchased from various persons and shown in the Books of Account, at the time of seizure, in his statement recorded under Section 108 of the Act, he had confessed that he had no documents for the purchase of diamonds. If he had those documents, he could have referred the same in his statements. The evidence created by an assessment of the Income Tax made in the year 1991 cannot be reli....
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....goods were de-notified from the provisions of Section 123, the burden of proof to prove that goods were of smuggled nature shifts on to Department. In this case, there is no evidence brought on record to indicate that the seized diamonds were of smuggled nature. Learned SDR, argue that when the diamonds were seized from the possession of the appellant, they were covered under provisions of Section 123 of Customs Act, hence now the appellant cannot claim the benefit of subsequent de-notification of diamonds from the applicability of Section 123. I find that this very same point was agitated before the division bench of the Tribunal in the case of Shrenik J. Kothari (supra). The categorical findings of the division bench are read - "Altern....
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....n stating that the goods were his stock-in-trade but the authorities did not choose to verify the accounts. We have held that the provisions of Section 123 cannot be invoked in the facts and circumstances of this case. In this view of the matter, therefore, the burden to prove that the goods were smuggled lies on the Department. This burden has not been discharged by the authorities as the Department has not adduced any evidence to show that the diamonds are smuggled and are of foreign origin. The appellant on the other hand in our view, has given acceptable evidence that the diamonds were his stock-in-trade. In view of the above we set aside the impugned order confiscating the diamonds and also levy of penalty on both the appellants and....
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....ith diamonds was not in possession of any documentary evidence regarding licit possession of the diamonds. To my mind, the ratio laid down of the division bench, in the case of Shrenik J. Kothari (Supra) will squarely apply in this case. Respectfully following the said decision of the Hon'ble Tribunal and in the facts and circumstances of this case, I find that onus to prove that the seized diamonds are of smuggled nature shifted to the Revenue and they have not discharged the burden in any way. In the absence of any evidence from the Revenue that diamonds were of smuggled nature, absolute confiscation of the diamonds cannot be upheld. The impugned order to the extent it upholds the absolute confiscation of the diamonds are set aside. Since....