TaxTMI 
TaxTMI 
2018 (7) TMI 280
X X X X Extracts X X X X
X X X X Extracts X X X X
....h diamonds concealed in his personal baggage from Congo without any legal import document and that he had handed over the said rough diamonds to Shri Pravin Ajudiya for sale in local market. It was alleged that this act of omission and commission on the part of both of them have rendered the seized rough diamonds weighing 10,510,60 carats valued at Rs. 4,24,34,182.00/- liable to absolute confiscation under Section 111(d), (1) and (m) of Customs Act, 1962. 3. It was alleged that Shri Pravinkumar R. Ajudiya and Mr. Tshimanga Mukadi Jean have committed offence punishable under Section 135(1) of the Customs Act, 1962, as they have knowingly concerned themselves in Smuggling of rough diamonds in violations of provisions of Section 11 read with Section 77 of the Customs Act, 1962 and FTDR Act, 1992. 4. It was alleged that Shri Bharatbhai Savaliya, the owner of Locker No. 1774, Princess Plaza Safe Deposit Vault, Varachha, Surat had acquired the smuggled diamonds from Shri Pravinbhai Ajudiya on 06/08/2011 without KPC and other legal import documents and had concealed the same in his above locker as per instructions of Shri Pravin Ajudiya. Besides, Shri Bharatbhai Savaliya was also in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ean had denied that he has smuggled any rough diamonds while coming from Congo to India. It was only in his second statement dated 18/08/2011 wherein he admits that approximately 6700 carats of rough diamonds were carried by him during his visit on 05/08/2011. He argued that the allegation was of smuggling 6667.460 carat of diamonds, however, in the DRI proceeding 10510 carats of diamonds were seized. He argued that in these circumstances there is no evidence regarding smuggled nature of diamonds. Mr. Bharatbhai Savaliya in his statement dated 08/08/2011 has stated that at around 7 pm on 06/08/2011 two bags containing rough diamonds was handed over to Shri Pravinhbhai Ajudiya on 05/01/2007. In his statement he has also stated that Mr. Pravinbhai Ajudiya meet him between 5:30 to 6:00 pm on the same day for depositing in the locker. He argued that in these circumstances it can be said that the diamonds found in the locker were not the diamonds allegedly given by Mr. Jean to Pravin Ajudiya. He pointed out that Shri Dineshbhai is the director of the Princess Plaza Safe Deposit Vault Pvt Ltd- Surat. He further, pointed out that they have produced an affidavit from the Dineshbhai dated 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ough the above submission; we find that the goods in question are diamonds which are not notified goods in terms of Section 123 of the Customs Act. In these circumstances the onus to establish the smuggled nature of goods is on the Revenue. 13. The evidences presented before us is in the shape of recovery of diamonds from 2 places, one from the Hotel room and other from the locker. The charge of smuggling is totally based on the statement of Mr. Jean recorded on 08/08/2011. The impugned order takes note of the recovery of diamonds from the locker of Shri Bharatbhai Savaliya. It also takes note of the fact that the said diamonds were covered in daily newspaper Divya Bhaskar dated 04/08/2018. It also states that the said diamonds were of Congo origin and that the diamonds were recovered from room number 102 of Hotel Jivan Dhara- Surat occupied by Shri Pravinbhai Ajudiya. The order relies on the statement of Shri Leon and Mr. Jean. It also relied on the declaration made by Mr. Jean and Mr. Leon at the time of their arrival in India, which showed they were not carrying any rough diamonds. The impugned order relies on the facts that the appellant cannot produce any legal document or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in it has been held that the retraction of confession has to be examined in light of the other corroborative evidences. Similarly the impugned order also relied on the decision of Bombay High Court in the case of ACC (Prev), Bombay Vs Ahmed Abdulkarim 2009 (247) ELT 97(Bom) wherein it has been held that the retraction need to be examined in the light of other facts and circumstances on record. The impugned order also pointed out that Mr. Jean had denied the knowledge of English language although the last paragraph of the retraction is in his own hand writing. The impugned order pointed out, form the hand writing it can be said that Mr. Jean had good knowledge of English. 16. The impugned order discussed the retraction of Mr. Pavinbhai Ajudiya that in his retraction dated 11/08/2014 stated that he had neither given any rough diamonds to the Shri Bharatbhai Savaliya for safe keeping in the locker in the diamonds were recovered from his Hotel room. Impugned order also pointed out that the statement was recorded of Mr. Pravinbhai Ajudiya in his own hand writing and contains the facts which were known to him only. The impugned order also discards the assertion allegedly application o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ication of Section 106 of Evidence Act, 1972 the burden of proof stands shifted. In the said decision following has been observed: 1. The appellants have also been contending that the Collector misconstrued and mis-applied the various decisions of the Supreme Court's and particularly so in respect of applicability of the provisions of Section 106 of the Evidence Act, and that he failed to appreciate the ratio in the case of Ambalal v. Union of India. We find that in paras 60 and 61 the Collector has based his decision on the following judgments of the Hon'ble Supreme Court : (I) Labchand Dhanpatsingh Jain v. State of Maharashtra (II) State of Maharashtra v. Natwarlal Damodardas Soni (III) Vira Ibrahim v. State of Maharashtra (IV) Collector of Customs v. D. Bhoormull Applying the ratio of these judgments the Collector recorded his findings in para 62 of the impugned order in regard to the legality of the seizure. In regard to the application of the basic principle underlying Section 106 of the Evidence Act. Hon'ble Supreme Court in para 44 of the judgment in Bhoormul's case held as follows : "These fundamental principles....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de the said provision applicable to the facts of the case while giving different interpretations. The ld. Member (Judicial) in terms of the Circular 95/2003-Cus., dated 6-11-2003 held that the burden of proof in respect of non-notified goods under Section 123 of the Customs Act lies upon the Revenue. Whereas the ld. Member (Technical) observes that the initial burden to prove that they are smuggled is on the Departmental authorities and later shifted on the person in possession of goods. 13. Section 123 of the Customs Act relates to seizure of smuggled goods and other notified goods. The emphasis is on "smuggled goods" and not on "goods". Presumption under Section 123 of the Customs Act would arise only after proof of the fact that the goods seized were within the meaning of Sec. 123 of the Customs Act. This section does not rise to a presumption that any goods seized should be taken to be gold or other such articles to which the Section applies; Section 123 of the Act enacts that where any goods to which the section applies, are seized under the Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....principle as explained by the Hon'ble High Court being canvassed by the Department that "it is not the law that in all cases of non-notified goods, the burden is on the Revenue to prove illegal entry of those goods into the country. Earlier the Tribunal in the same case observed that it is well settled law that in the case of non-notified it is Revenue to prove the illegal entry to the country. The Hon'ble Bombay High Court has upheld the order of the Tribunal in the light of the legal position highlighted by the Hon'ble Supreme Court in the case of D. Bhoormull. 15. I have gone through the citations submitted by the ld. JDR Shri Pardeshi. Most of the judgments pertain to the Tribunal except one judgment of Hon'ble Gujarat High Court and that of D. Bhoormull case of Hon'ble Supreme Court. The Tribunal West Zone, Mumbai, has held in most of the cases that the Department has discharged the burden by adducing so much of evidence that is sufficient to raise presumption in its favour, wherein the person in possession of the smuggled goods could not inform the sellers of the smuggled goods, as such, the confiscation of the goods held to be legal since the burden of proof has not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vation of ld. Member (Technical) that the goods are in trade quantity as such the circumstances would show that the goods are smuggled one, has no force in law. Both sides agree that the goods are importable and traded in the Indian market. They claim the Manager Shri Bokadia has bought them in open market at MusafirKhana at Mumbai and booked through M/s. Delux Road Lines Pvt. Ltd. Therefore, requirements under Section 78 of Foreign Trade Development (Regulations) Act, 1972 and rules made thereunder should not be made applicable for purchase of goods from open market. No law has been shown by ld. JDR that the buyer of goods should identify the seller and failing which goods deemed to be smuggle" 20. Section 123 of the Customs Acts puts the onus of establishing smuggled nature of goods on the Revenue, except for the notified goods. Diamonds are not notified under Section 123. In these circumstances by mere failure to explain Licit acquisition of diamonds the burden of proof under Section 123 is not discharged. It is also a fact that diamonds are freely traded in the open market. A person may acquire legally or illegally from the market. Failure to explain legal acquisition does n....