TaxTMI 
TaxTMI 
2013 (4) TMI 7
X X X X Extracts X X X X
X X X X Extracts X X X X
....in recovery of gold and articles thereof and silver ornaments besides Indian currency of Rs. 24 lakhs as detailed below :- S.No. Description Wt. in grams 1. Foreign Marked gold bars 1100.960 2. Primary gold 1206.430 3. Gold Lagadi 149.270 4. Gold ornaments 73.530 Total gold 2530.190 Silver ornaments 313.500 2.1 As the occupants could not produce any documents showing the licit possession and ownership of the goods, the same were seized under a panchnama dated 5-11-2009 by the Police. The owner and the driver were arrested under Section 41(1)(d) of the Cr.P.C. 1973 and produced before the Judicial Magistrate First Class (JMFC), Pune, for judicial custody who rejected the request of the Police and were released vide order dated 6-11-2009. The Police then informed the Commissioner of Customs, Pune about the arrest of the owner and driver of the vehicle and seizure of the gold and silver. The Asst. Commissioner of Customs, Pune, vide letter dated 6-11-2009 requested the Police authorities to hand over the seized goods, cash, vehicle and the same were taken over by the Customs from the Police and were seized under the provisions of the Customs Act. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cured the gold/ornaments, were searched and no incriminating documents could be recovered. Statements of these traders were also recorded. Sri Harinarayan Bhaattad of Sri Balaji Traders in his statement dated 10-11-2009 admitted that he had given 4 gold bars weighing 100 gms. each, having foreign markings of purity 99.9 to the appellant which he had procured from M/s. Chanda Anjaiah of Secunderabad under proper documents. Similarly Sri Vinod Kumar Bhattad of Sri Ganesh Jewellers also admitted to have given five gold bars of 100 gams each of foreign origin to the appellant and also a cash of Rs. 2.5 lakhs for purchasing gold for making ornaments and the said gold bars were purchased from traders in Secunderabad. The other traders did not claim to have any transaction with the appellant. The appellant on the other hand submitted on 16-11-2009 documents from 9 traders (by way of letters) of Narayanpet under which he had procured gold bars/ornaments totally weighing 2085.170 gms and cash of Rs. 2.5 lakhs. 2.4 The department also got the purity of the gold seized from the appellant tested by M/s. Tanishq. The purity of 10 gold bars of 100 gms each and 2 half gold bars of 50 gms each, h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....From the facts of the case, it is evident that the goods were seized by the Police under the presumption that they were stolen property and the goods were not seized by the Customs from the appellant. Therefore, the burden to prove the gold in question is not smuggled is not required to be discharged by the appellant and it is for the department to establish that the goods are smuggled and this onus has not been discharged by the department. He relies on the following judgments in support of his above proposition, namely :- (a) Gian Chand & Others v. State of Punjab [1983 (13) E.L.T. 1365 (S.C.) (b) State of Maharashtra v. Prithviraj Pokhraj Jain [2000 (126) E.L.T. 180 (Bom.)] (c) Nirmala Reddy (sic) v. CC, Hyderabad-II [2006 (196) E.L.T. 410] (iii) Naved Ahmed Khan v. CC, Bangalore [2005 (182) E.L.T. 494] (iv) H. Ismail v. CCE & C, Cochin [2001 (133) E.L.T. 191] 4. Mere foreign marking on the gold does not by itself establish the smuggled nature of the goods. It can at best establish the foreign origin of the goods. He relies on the following judgments in support of his contention, namely :- (i) Naved Ahmed Khan v. CC, Bangalore [2005 (182) E.L.T. 494] (ii) Jitendra Pawar ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat possession was transferred to Customs authorities under Section 180 ibid, there was no fresh seizure under the Sea Customs Act, 1878. The provisions of Sea Customs Act and the Customs Act, 1962 are identical with respect to the seizure and the onus of proof in the instant case. From the records it is evident that it is the police who seized the goods on 6-11-2009 and thereafter they were handed over to the Customs authorities by the police on the request of the Customs authorities. In other words, the Customs authorities did not seize the goods from the appellants; therefore, the provisions of Section 123 which casts the onus on the appellants to prove that the goods are not smuggled is not applicable, inasmuch as no seizure has been made from the appellant by the Customs. The same view has held by the Hon'ble High Court of Bombay in the case of Prithviraj Pokhraj Jain (cited supra) and by this Tribunal in a number of cases such as Nirmala Mitra [2001 (138) E.L.T. 1037 (Tri.-Kol.)], E. Eshwara Reddy, Naveed Ahmed Khan, etc. Therefore, the burden and onus of proof to establish the fact that the goods are smuggled lies on the Revenue and not on the appellants, in terms of the jud....
X X X X Extracts X X X X
X X X X Extracts X X X X
....other words, the Customs have not discharged the onus of proving that the goods under seizure were smuggled into the country and, therefore, are liable to confiscation under the provisions of Customs Act. The decision of this Tribunal in the cases of Naved Ahmed Khan, Jitendra Pawar and Monoranjan Banik support the case of the appellant. 7.3 It is also pertinent to note that show cause notices were issued to all the nine traders of Narayanpet proposing penalty under Section 117 of the Customs Act, alleging connivance with the appellant in the smuggling of gold. The proceedings against them were dropped by the adjudicating authority without citing any reasons. In other words, the adjudicating authority has given the benefit of doubts to all the nine traders; if that be so, it is incomprehensible why the appellant who procured the gold from these nine traders was not given the same benefit of doubt. The only evidence which the department has, against the t appellant is the statement which he had given on 6/7-11-2009 wherein the appellant had admitted that the goods under seizure are smuggled. However, the appellant has subsequently produced evidence, by way of letters/bills, to show....