TaxTMI 
TaxTMI 
2021 (8) TMI 1168
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....ii) Shri Nalin Govindbhai Soni (father-in-law of Shri. Krunal Soni & Father of Smt. Bhavisha Soni). During search, officers found 4 Gold Bars weighing 1 Kg each from the pockets of pant of Shri Krunal Soni and 4 Gold Bars weighing 1 Kg each from pockets of pant of Shri Nalin Soni, i.e. total eight Gold Bars weighing 8 Kg and on verification, their purity was found 995.0 with Market value prevailing on the date of verification was found Rs. 2,49,20,000/- (Rs. Two Crore Forty Nine Lakh Twenty Thousand only) by Government Approved Valuer. On being asked for documents showing legal import, purchase-sale of said eight Gold Bars, Shri Krunal Soni stated that he was not in possession of any such documents. Therefore, the said 8 kgs gold bars were seized under reasonable belief that the same were liable to confiscation under the Customs Act 1962. 2.1 In follow up actions, statements of various persons were recorded by DRI and investigation proceeded on the basis that carriers apprehended with 8 kgs gold gave name of one Jitendra Soni as supplier of Gold and on interrogation the said Jitendra Soni gave names of 3 persons who had delivered said seized Gold. Jitendra Soni stated to have ob....
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....iddhartha Nagar, Khodiyar Nagar Cross Road, New VIP Road, Vadodara, and; Shri Krunal Soni S/o Shri ThakorbhaiSoni, R/o 10, Vallabh Villa Society, Opp. Khodiyar Temple, Khodiyar Cross Road (Char Rasta), New VIP Road, Vadodara - 390018. (ii) Shri NalinbhaiSoni S/o Shri GovindbhaiSoni, R/o N-1, Savita Park, Near Govind Wadi, Isanpur, Ahmedabad. (iii) Shri ThakorbhaiSoni S/o Shri JayantilalSoni, R/o A/8, Omkara Heritage Society, Near Siddhartha Nagar, Khodiyar Nagar Cross Road, New VIP Road, Vadodara, and; Shri ThakorbhaiSoni S/o Shri JayantilalSoni, R/o 10, Vallabh Villa Society, Opp. Khodiyar Temple, Khodiyar Cross Road (Char Rasta), New VIP Road, Vadodara - 390018. (iv) Shri Tushar Soni S/o Shri ThakorbhaiSoni, R/o A/8, Omkara Heritage Society, Near Siddhartha Nagar, Khodiyar Nagar Cross Road, New VIP Road, Vadodara, and; Shri Tushar Soni S/o Shri ThakorbhaiSoni, R/o A-103, Shyam Residency, Nr. R. P. Vasani International School, Nava Naroda Road, Ahmedabad. (v) Shri Jitendra Soni S/o Shri BhanuprasadSoni, R/o 21, Sudarshan Colony, Near Punit Nagar Part-3, Satellite, Ahmedabad, and; Shri Jitendra Soni S/....
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....Jitendra Bhanuprasad Soni. He argued that such heavy penalty of Rs. 25,00,000/- imposed on this individual Appellants is not fair, justified and deserves to be set aside in this case. He submitted that penalty is imposed on Appellant without hearing him and there is no case for imposing penalty on this Appellant, who has co-operated in investigation and disclosed all particulars correctly whatever he knew. Appellant has no criminal background and have never been involved in any criminal activity including any cases under Customs Act 1962, except the present case. Appellant have neither smuggled 8 Kgs Gold in India nor he has any objection with the confiscation of 8 kgs Gold. The penalty imposed upon Appellant is very harsh and deserves to be set aside. Appellant has not claimed ownership or possession of seized & confiscated 8 kgs Gold. He argued that Penalty u/s 112(b) of Customs Act 1962 requires Mens rea on record, which is not existing in the present case. Hence, the entire penalty deserves to be set aside, in the interest of justice. 4. Shri P.P. Jadeja, Counsel appearing on behalf of Appellant shri Ajesh Patel, while reiterating grounds of Appeal and submissions in synopsi....
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.... are in judgment of the Hon'ble Division Bench of Tribunal in mainly the decisions referred in Appeal and in the following case: • 2001 (127) E.L.T. 415 (Tri.-Mum.) - S.K. Chains v. CC(Preventive), Mumbai. • 2002 (149) E.L.T. 427 (Tri.-Kolkata) - Girdhari Dubey v. Commissioner of Customs (Prev.)Kolkata 5. Shri Vinod Lukose, Learned Superintendent (Authorised Representative), appearing on behalf of the Revenue reiterates the findings of the adjudicating authority and has submitted that arguments by both the Appellants are untenable and accordingly he argued that their Appeals may be rejected. He has also filed written submission in order to object the arguments made on behalf of the Appellants and has contended that since gold is covered under section 123 of the Customs Act 1962 the burden of proving that seized Gold bars are not smuggled goods is on Appellants, which Appellants shri Jitendra B. Soni have not discharged for seized 8 kgs Gold bars and Shri Ajesh Patel for 100 gms Gold bar and hence, confiscation of 8 kgs Gold, 100 gms Gold and also penalty on the Appellants may be upheld. 6. Heard both the sides and perused records. I find that Penalty....
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....us, it was required to establish that Shri Jitendra B. Soni definitely knew that the said 8 kgs Gold was smuggled into India. However, from records, it is not coming out that Appellant shri Jitendra B. Soni knew that said 8 kgs Gold was smuggled into India or that the 8 kgs Gold was liable to confiscation under section 111 of Customs Act 1962. It is settled law that penalty being quasi criminal in nature cannot be imposed on assumptions and presumptions. Facts of the case in hand do not reveal any such element of mensrea or conscious knowledge qua the Appellant Jitendra B. Soni. His Statement is that doing such purchase-sale in cash may "create doubt" and as Gold was without having supportive bill or lawful document for their import, he had "suspicion" that they might have been smuggled. Thus, statement "he had suspicion that Gold might have been smuggled", but he was not aware that it was smuggled only. Further, purchase of such quantity in cash may be for any reason may "create doubt" and may be objectionable under provisions of Income Tax, but such cash transaction of Gold in India will not make such Gold liable to confiscation under Customs Act 1962. Shri Jitendra Soni acted on....
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....gled goods knowingly, such circumstantial evidences cannot be taken to be the proof of the fact of smuggling for imposing penalty. Penalty u/s 112(a) under Customs Act 1962 is for any "act, omission or abetment" in improper import of goods and does not require mensrea, whereas penalty u/s 112(b) ibid operates for smuggled goods after its improper import and requires mensrea. Ingredients required for imposing penalty are not existing to impose penalty under Section112(b) of Customs Act, 1962. Penalty imposed against Shri Jitendra B. Soni deserves to be set aside. 8. Now, I take up case in Appeal No. C/12079/2018-SM filed by shri Ajesh Patel, Proprietor of M/s Patidar Bullion, Ahmedabad who has claimed that seized 100 gms Gold from his business premises on 13/14-09-2016 is out of his legally procured trading stock on that day which is not liable to confiscation and hence he prays to set aside confiscation of the seized 100 gms Gold bar and penalty of Rs. 25,000/- imposed on him. 9. I find that Shri Ajesh Patel is the proprietor of M/s Patidar Bullion, Ahmedabad and has been engaged in purchase & sale of Gold, Silver Bullions. Seized 2 pcs of Gold bar 200 gms are claimed to be o....
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....-09-2016, closing stock of Gold remained 2642.627 gms. The investigation has not adduced evidence to show that seized 200 gm gold was smuggled into India. The gold in question was seized in town after it has been entered into India and it may have changed many hands after its import into India. When gold has come in hands of shri Ajesh Patel in the normal course of business of sale/purchase, they have received it with Bills without having any serial number. When O-I-O has released 100 gms Gold it was shown to have been imported by Kotak Mahindra Bank in 2010, but it had come in hands of Appellant Ajesh Patel much later before seizure in year 2016. I find force in Appellant's argument that as per prevailing Trade practice in market, Gold of 100 gms were received without any mark/serial number in purchase Invoices and accordingly Appellant has taken entry of stock in Books of Account for their trading purpose. Thus, it is impossible in normal market practice followed all over India, to know that gold purchased by him from Indian market for sale is gold imported from customs ports or not. I find that O-I-O has confiscated 100 gms Gold which is not liable to confiscation, as impugned O....
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....t, 1962 stands discharged and also holding that there is no legal requirement of mentioning markings of gold bars in sales bill and original importers themselves not showing such markings in delivery/sales documents issued by them and Revenue having failed to prove that gold bars not purchased by respondent and same procured from any other sources, confiscation not sustainable and further holding that Onus shifted to Department when assessee discharged his burden by producing bills showing purchase of gold in terms of Section 123 of Customs Act, 1962. [para 4] • In the case of Nitya Gopal Biswas v/s CC(P) - 2016 (344) E.L.T.-209 (Tri - Kolkata), it has been held that reasonable doubt of smuggled nature of foreign marked gold may be sufficient for the purpose of seizure of gold, by virtue of Section 123 of Customs Act, 1962, but the same is not sufficient for confiscation when appellant has produced legal document of their licit acquisition and that Department not able to establish the smuggled nature of seized foreign marked gold, whereas claimant appellant has been able to discharge his burden by providing licit document of purchase of 60 foreign marked gold biscuits,....
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....for sustaining the confiscation of 32 pcs. of foreign marked gold which has been claimed by Shri Giridhari Dubey we find no reason for imposition of any penalty on Shri Giridhari Dubey. 10. I find that the above view is in compliance to prevailing Rules in India. If revenue wants that gold dealers of foreign marked gold in India should indicate the brand names with respect to each brand then foreign marked gold should have been declared as one of items under Chapter IVA of Customs Act, 1962. 11. This issue is settled (as revenue has not filed any appeal against above judgments). Thus, there is no requirement under prevailing law to mention brand or marks or numbers of foreign marked gold on sale/purchase documents. Hence, confiscation ordered deserves to be set aside in this case. Appellant Shri Ajesh Patel has submitted to follow decisions relied upon as above which are applicable in facts of this case. Shri Ajesh Patel also submits that by impugned O-I-O one 100 gms gold pc was released unconditionally, but while release the said 100 gm gold bar, customs authorities have unreasonably recovered penalty of Rs. 25,000/- for release of 100 gm Gold, which may be allowed as conse....