TaxTMI 
TaxTMI 
2018 (10) TMI 1161
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....tified in allowing the Appeal of the Respondents herein and setting aside the order of confiscation of the seized gold, by totally discarding the confessional statements given by the Respondents under the provisions of section 108 of the Customs Act, 1962, which are in the nature of admissible legal evidence, as clearly mandated by the Hon'ble Supreme Court in the case of (i) K. I. Pavunny v/s. The Assistant Collector (HQ), (1997) 3 SCC - 721 and (ii) Naresh J. Sukhwani v/s. Union of India (1996) SCC (Cri) 76? (b) Whether in the facts and circumstances of the case and in law, the Tribunal is justified in holding that the Respondents have discharged their burden/ onus cast on them in terms of the provisions of section 123 of the Customs Act, 1962 to prove and/or establish that the huge quantity of 575 gold bars seized from their custody is not the smuggled one, inspite of the fact that no legal evidence, such as maintenance of any basic Books of Accounts whatsoever, Registration details under the provisions of Sales Tax, Payment of Purchase Price of the gold, Payment of Government Levies, like Income Tax, Sales Tax etc., duly supported by the Annual Returns, etc has been prod....
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...., 2000, the statement of Mr. Anis Ashraf (Driver of Respondent No.1) was recorded under Section 108 of the Act when he stated that the delivery of gold bars was taken from one Mr. Chetanbhai at Mumbai. However, in his subsequent statements, he indicates that gold bars were purchased from Ahmedabad. It was also explained that Rs. 21 lakhs were sale proceeds of gold. These sale proceeds were received from one Mr. Padambhai who withdrew the amounts from Vyasa Bank, Nariman Point, Mumbai; (d) On 9th March, 2000, Respondent No.1 made a statement under Section 108 of the Act to the Officers of Respondents. In his statement, Respondent No.1 stated that 575 seized gold bars were purchased from one Mr. Chandubhai (also known as Bhupendra Thakkar); (e) At the same­time, on 9th March, 2000, the Officers of the Respondent recorded the statement of one Mr. Devang A. Patel at Ahmedabad. In the statement made under Section 108 of the Act, Mr. Patel, stated that he works for one Mr. Bhupendra Thakkar whose firms are - M/s. Pawan Jewellers and M/s. Paras Bullions. He also stated that he purchases gold bars from local dealers in Ahmedabad and delivers the same as per instructions of his em....
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...., the other Respondents herein amongst others, were also called upon to show cause why penalty under Section 112 (a) and (b) of the Act should not be imposed upon each of them. (k) The Respondents resisted the show cause notice. At the personal hearing, Respondent No.1 reiterated that the seized gold is not a smuggled gold. Therefore, no issue of its confiscation arises. The burden cast upon him by virtue of Section 123 of the Act, the Petitioner submitted has been discharged. Thus, the notice be dropped; (l) On 1st July, 2002, the Commissioner of Customs (Adjudication) passed an order, confirming the show cause notice dated 6th September, 2000. The above confirmation , on consideration of evidence was on the basis that the theory of purchase of gold bars from local market is not acceptable. This, included the discrepancy in the bill books, inability to explain the funding for purchases and the frequent calls made by Respondent No.1 to Dubai. Thus, the 575 gold bars were confiscated under Section 111 (d) and (j) of the Act, Indian currency of Rs. 21 lakhs were confiscated under Section 121 of the Act and the jeep in which the gold and cash were secreted, were confiscated unde....
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....from whose possession and/or the person who claims ownership of the goods to prove that the seized goods are not smuggled goods. However, before the aforesaid burden could be cast upon the person who claims to be the owner of the seized goods, the Revenue should be able to establish that the goods seized under Section 110 of the Act, was on a reasonable belief that the imported goods were smuggled goods. Therefore, where seizure is a subject of challenge on the ground of absence of reasonable belief then, the question of burden of proof on the person, claiming to be the owner of the goods, would arise only when the challenge to seizure is, negatived. In the facts of the present case, neither before us nor before the authorities under the Act, has the Respondent No.1 challenged the seizure for absence of reasonable belief that the seized gold was smuggled goods. Thus, the burden of proof in this case is upon the Respondent to establish that the seized gold bars are not smuggled. 8 We shall now take up for consideration, the substantial questions of law in seriation, as under:­ (A) Re. Question (a):­ (i) This question essentially proceeds on the basis that as the Res....
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....o evidence to establish licit ownership/possession of gold bars. (iii) We are of the view that in the absence of evidence in the form of regular Books of Account, Registration under the Income Tax and Sales Tax, etc., cannot ispo­facto lead to the conclusion that the seized gold bars, are smuggled gold bars. These may lead to proceedings for breaches of other Acts but it does not follow from it that the gold bars are smuggled goods. In fact, if a person in possession of the stolen gold is able to establish that it had come into India after a proper declaration and compliance of the Act, no confiscation under the Act, can arise. Proceedings under the Indian Penal Code may be initiated by the police for theft, but it would not by reason oftheft become smuggled goods. Moreover, smuggling as defined under Section 2 (39) of the Act, is an act or omission which will render goods liable to confiscation under Sections 111 of the Act for import and 113 of the Act for exports. On reading of Sections 111 and 113 of the Act, not keeping proper books of accounts or not being registered with the Income Tax and/or Sales Tax Authorities, is not an omission which renders the good liable for ....
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....ere smuggled and the Respondent No.1 had failed to discharge the burden cast upon him under Section 123 of the Act. (viii) On the other hand, Mr. Nankani, learned Senior Counsel for Respondent No.1, submits that: (a) the question as admitted does not give rise to any substantial question of law as the view taken is one on facts and a possible view. Therefore, no interference is warranted; (b) In any case, the burden of proof cast upon Respondent No.1 under Section 123 of the Act, stood discharged on not only giving details of the source of gold bars but also giving evidence of source of source. Therefore, confiscation of the gold is not warranted as held by the impugned order; (c) The Explanation was initially offered on the date of seizure by the Respondent's Driver that the delivery of the gold bars was taken from Mumbai. However, later in the subsequent statement, it is stated to be taken from Ahmedabad. This later statement is in accord with the documents produced in respect of the seized gold bars and corroborated by the statements of two independent witnesses viz: Devang Patel (recorded on 9th March, 2000 and 14th March, 2000) and Mr. Bhupendra Thakkar alias C....
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....t these discrepancies were also found in respect of bills issued to other customers. So far as the inconsistency in the statement of the Driver of Respondent No.1 is concerned viz; the place from where gold was taken possession of i.e. Ahmedabad or Delhi, is one plea of inconsistent evidence. The subsequent statement of taking possession of gold from Ahmedabad, in fact, is in accordance with documents on record and corroborated with the statement of Mr. Bhpendra Thakkar and Mr. Devang Patel. The fact that M/s. Pavan Bullions were not found at the given address when visited, is to be considered in the light of the fact that, M/s. Pavan Bullions were duly registered with the Sales Tax Authorities, having a sales tax account number, their accounts were audited by a Chartered Accountant and relevant income tax returns were also produced to establish the existence of M/s. Pavan Bullions. Further, the Tribunal found that M/s. Paras Jewellers and M/s. Pavan Bullions were firms in existence and not fictitious firm. This finding of fact, on the basis of record, is a possible view as the Revenue in the face of the above record with the authorities, did not investigate further or bring on rec....
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....dent and that has to be discharged up to the hilt. We are unable to understand the above submission. Section 123 of the Act, statutorily imposes a reverse burden of proof i.e. not upon the person (Revenue) who assert that the gold in possession of the Respondent No.1 is smuggled gold but on the person (Respondent No.1) who is found in possession of goods notified under Section 123 of the Act. However, this reverse burden of proof does not do away with the manner of discharging the burden of proof. Thus, the manner of discharging the burden of proof by shifting of the onuswould be as applicable to all other civil proceedings. Mr. Sethna, placed reliance upon Nizam Institution of Medical Sciences v/s. Prasantha S. Dhananka & Others 2009 (6) SCC 1 in particular, paras 77 and 78 thereof. We find that this decision, in fact, reiterates the general principle laid down by the Apex Court in R.V.E. Venkatachala Gounder (supra) about the shifting onus. Besides, one must not loose sight of the fact that the Nizam Institution of Medical Sciences (supra) decision dealt with Medical negligence, where the doctors would be best able to explain the circumstances leading to a particular result. In f....