TaxTMI 
TaxTMI 
2013 (6) TMI 346
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....s under Section 111 (d) of the Customs Act, 1962. He had also imposed penalty of Rs.50,000/- each upon Shri Faiyaz Ahmad and Syed Zaki Ishrati on 3.6.2005. 3. The Customs Appeal No.1 of 2012 under Section 130 of the Customs Act, 1962 arises out of an order passed by CESTAT, New Delhi dated 15.6.2011 by which it dismissed the application for rectification of alleged mistakes in the order of CSAT No.510 of 2010-SM dated 28.4.2010. The application was filed under Section 129B (2) of the Customs Act, 1962. It was dismissed as the CESTAT did not find any error on the face of the record warranting the recall of the order and for rehearing the appeal. 4. Brief facts giving rise to these appeals, as stated in the order of the Addl. Commissioner (Customs), Central Excise, Kanpur are as follows:- "Acting on an intelligence, a team of Customs & Central Excise officers of Agra Division visited the residential premises situated at 35/233 B, Indra Puri. At the time of visit, Sh. Faiyaz Ahme S/o. Sh. Ashiaz Ahmed R/o 28, Deep Nagar, manager of M/s. Zarafahan Chemical (P) Ltd., which is also situated in the same premises, was available. The officers executed the search warrant issued by t....
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..../- on 10.8.94 from the residential premises situated at 10-B, Saresh Nagar, Agra. Therefore S/Sh. Faiyaz Ahmad and Zaki Ishrati were served with a notice C.NO. VIII (10) Cus/Gold/2/94/1574-76 dated 25.1.96 to show cause to the undersigned as to why 1681.500 gms. gold biscuits and pieces thereof of foreign origin totally valued at Rs.7,71,273.00 should not be confiscated under Sec. 111(d) of the Customs Act, 1962 and why penalty not be imposed upon them under Sec. 112 of the Customs Act, 1962. In reply to the aforesaid show cause notice, Sh. Faiyaz Ahmad vide his letter received in this office on 21.3.95 stated that the assayer report was doubtful in as much as he was not competent and authorized to assess gold biscuits that the report simply indicates that the gold pieces bear foreign markings & no origin of country has been mentioned, that the purity of the gold had been assessed by the assayer as 999 but in quite a few pieces the figures written were 9999 & these figures did not prove that the gold was of foreign origin. Sh. Faiyaz Ahmad further stated that his initial statement was recorded under duress and his revised statement was not an after thought but was based on....
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.... the affidavit of Shri Faiyaz Ahmad dated 12.8.1994, retracting his statement. 9. A written brief was filed by Shri A.K. Jain on behalf of Shri Zaki Ishrati on 12.1.1994 raising following issues:- "(A) The assayer Sh. Narendra Ku. Paraswani was not an approved valuer under the Customs Act, 62, he did not have the required equipment to test the purity of gold and that the seized gold should have been sent to the Govt. of India Mint to test its purity." 10. The Adjudicating Authority held that Shri Narendra Kumar Parswani of M/s Bhajandas and Bros. Jewellers, Agra was called by the customs officers to make an on the spot assessment of the weight and purity of the seized gold, which is the usual practice in such cases. Shri Parswani gave a certificate of gross and net weight and value of the gold. He did not certify the purity of the gold pieces. He mentioned the marking of purity inscribed on the metal and gave his independent opinion after conducting the 'kasauti test', which has its own limitations, but is considered as sufficient proof. The adjudicating authority observed:- "As regards sending the gold to Govt. of India Mint to test its purity, I find that no....
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....melted in the manufacturing premises of the company for making liquid gold. Both of them, however, pleaded ignorance about the 16 pieces of gold comprising of 8 gold biscuits recovered from the grass in the lawn. They stated that the same must have been kept by someone to implicate them. They did not accept the ownership of the 16 pieces of gold. 13. The prosecution relied upon the statement of Shri Faiyaz Ahmad, Manager dated 10.8.1994 under Section 108 of the Customs Act, 1962, wherein he stated that all the seized biscuits and pieces of gold were purchased by him on 9.8.1994 from Choti Saraf, Firozabad on cash payment without any bill or voucher. Shri Faiyaz Ahmad repeated the statement on 11.8.1994. Subsequently, by his affidavit dated 12.8.1994 he retracted the statement, however, the source of acquisition of the gold was not retracted. The Adjudicating Officer did not accept the argument that the gold was recovered in the factory-cum-office premise, a part of which is used by Shri Zaki Ishrati as guest house. The prosecution stand found support from the Panchnama and the statement of Shri Faiyaz Ahamd that the gold was recovered from the residential portion. 14. Shri Fa....
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....and found that since the statement of persons are corroborated by recoveries, and the parties has not adduced any evidence to be established that the statements were recorded under duress or coercion, the statements will carry full evidenciary value. 19. The demand for cross-examining the panch witnesses was not accepted on the ground that on the report received from Agra Division, the panch witnesses were not traceable. As regards the cross-examination of the assayer, it was found that his report was in the capacity of expert, and the experts are not generally allowed to be cross-examined. The two jewellers, whose statements were recorded were not relied upon by the prosecution and therefore the request to produce them as witnesses was not accepted. The Addl. Commissioner, Customs, Central Excise, Kanpur thus passed the order of confiscation of gold biscuits and imposition of penalty on both Shri Faiyaz Ahmad and Shri Syed Zaki Ishrati. 20. The Commissioner (Appeals), Customs and Central Excise, Kanpur gave following reasons to reject the appeal:- "I have carefully examined the case records, grounds of Appeal and also the written submission made by the Appellants, through....
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....y on the appellant to prove that the gold was procured by them legally. No such evidence was led. 22. The CESTAT found that the letters of Swarnkar Sangh, Shree Sarafa Committee and Agra Jewellers Association that the gold carrying foreign mark need not necessarily be of foreign origin, may be theoretically possible, unless some forgery was done, was not acceptable on the ground that the Adjudicating Authority has come to conclusion that the seized gold was of foreign origin and that the appellant had failed to discharge the burden of proof as contemplated under Section 123 of the Customs Act. 23. The CESTAT found that the statement of Shri Faiyaz Ahmad was clearly incriminating in nature. He sent retraction in the form of telegram and also in the form of affidavit filed in person before the Magistrate, and sent it to Collector of Central Excise, Kanpur. In the overall context including the circumstances in which the gold was seized, his subsequent retraction was not treated to have taken away the effect of statement, as the retraction was not addressed to the officer to whom the statement was given. At the most the retraction could be treated as representation or a complaint....
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....by any affidavit of his counsel. c) The prayer in the correct application is for recall of the order and rehearing the appeal which is beyond the scope of application for rectification of mistake as contemplated under section 129(B)(2). d) The application proceeds on the presumption that all grounds mentioned in the appeal memo have been actually canvassed by the learned advocate during the hearing. It also overlooks the fact that arguments by both sides precede dictation of the order. After the hearing is over, when the order being dictated is going against any party, they cannot be allowed to plead fresh grounds, as such a procedure is not a healthy one. The application also proceeds on the assumption that the only submissions which have been specifically discussed in the order have been considered by the Tribunal. It also overlooks that whatever submissions not specifically discussed did not find favour with the Tribunal. The non acceptance of the submissions/view points urged on behalf of either party cannot be treated as errors or mistakes that too apparent on face of records. e) Certain grounds on which the application has been made is also on erroneous appreciation ....
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....sting. 29. Shri Jain submits that certificate of Gold Dealers Association, Agra and other certificates of Sarafa Associations should have been taken into consideration. The bail application of late Faiyaz Ahmad was considered by the Chief Judicial Magistrate, Agra. An affidavit was also filed on behalf of Shri Faiyaz Ahmad before the Special Judicial Magistrate, Kanpur on 23.8.1994. The bail order dated 31.8.1994 by the Special Judicial Magistrate, Agra should also have been taken into consideration as evidence in the denovo adjudication order. Shri Jain relied upon Customs v. Dina Aruna Gupta, 2011 (274) ELT 323 (Del) in which the Delhi High Court observed in para 32 as follows:- "32. Normally, the test applied for testing gold is furnace test but the same was not applied or resorted to in the present case. There is no evidence on record that PW3 Sr. Ramesh Chand Aggarwal was possessing any proficiency in the matter of testing gold. The certificate/ report Ex.PW1/F does not contain any data. Whereas the certificate must contain actual data and not mere opinion. Further, the gold of foreign origin has to be proved by the authentic manner. Law is well settled that mere marking....
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.... Any gazetted officer of customs duly empowered by the Central Government in this behalf, shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under this Act. (2) A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under control of the person summoned. (3) All persons so summoned shall be bound to attend either in person or by an authorized agent as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject, respecting which they are examined or make statements and produce such documents and other things as may be required; Provided that the exemption under Section 132 of the Code of Civil Procedure, 1908 (5 of 1908), shall be applicable to any requisition for attendance under this section. (4) Every such inquiry as aforesaid shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal....
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....t was held that where the authorities on the basis of materials on record, which may be sufficient in the circumstances of the case came to conclusion that gold biscuits have been in possession of the respondents were liable for confiscation and respondents committed offence under Section 112, even without taking option of presumption under Section 123, the department could have directed confiscation as the burden in such case falls upon the person from whose possession such gold biscuits of foreign markings were seized. In this case the Supreme Court held that the High Court could not have interfered with the findings of the authorities on the ground that the department had failed to discharge initial burden of proving that the goods were smuggled. 35. The four gold biscuits recovered from the drawer of the appellant were of foreign origin. The appellant produced receipt no.170 dated 6.7.1994 from Khairati Ram Desraj Delhi for purchase of five biscuits out of which one was stated to have been melted. The appellant thus proved the valid possession of these four biscuits. Regarding 16 pieces of gold comprising of eight gold biscuits recovered from beneath the grass of the lawn at....