TaxTMI 
TaxTMI 
2023 (2) TMI 243
X X X X Extracts X X X X
X X X X Extracts X X X X
....e also confiscated the Mercedes car bearing registration No. DL ICQ 7525 seized from the appellant under Section 115(2) which was registered in the name of M/s PRK Diamonds Pvt. Ltd and allowed it redemption on payment of a fine of Rs.10,00,000/-. Penalty of Rs. 50,00,000/- was imposed on the appellant under Section 112(b) (i) and a penalty of Rs.15,00,000/- on Shri Ahadees under Section 112(a)(i). 2. The facts of the case are that the Directorate of Revenue Intelligence [DRI] received intelligence that a person aged about 26/27 years and around 5‟5" tall will be carrying smuggled gold bars of foreign origin and would hand them over in a white Mercedes car bearing registration No. DL ICQ 7525 near Gate No. 3 of Rajeev Chowk Metro Station on 07.12.2015 around 16.00 hours. Officers kept surveillance in the area and at around 16.15 hours, a person of the description carrying a slinging black bag entered the car and handed over the black bag to another person sitting in the front passenger seat. The other person handed over a pink polythene bag in return. At this stage, DRI officers knocked at the front door of the car by showing their identity cards and asked them to open the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....k polythene bag. Under the belief that the car, the gold and the cash were liable for confiscation, they were seized. Statements of the appellant, Shri Ahadees and the driver Shri Goswami were recorded. 9. In his statement dated 8.12.2015 the appellant said that he had joined his father‟s business in gold jewellery in the year 1997 and that he opened a company in the name of M/s PRK Diamonds Pvt. Ltd., Karol Bagh which would purchase diamonds in wholesale and sell to different retailers. In November 2015, one Shri Mushtaq, suggested to him to start business of smuggled gold and introduced him to one Shri Harish of Dubai and gave his mobile number. Shri Harish called him from Dubai and told him that he would send gold through his man and after selling it in the market the appellant should hand over the sale proceeds to him. Earlier, on 1.12.2015 and 5.12.2015 Shri Harish had sent him 8 kg. gold each time. At the time of receiving gold he would pay some amount to the person who handed over the goods and he would pay the rest after selling the gold. 10. Further, on 7.12.2015 he received a call from Shri Harish who told him that Shri Ahadees would be contacting him on 7.12.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd that Vodafone connection 7289970347 which was recovered from Shri Sunny Kakkar and which was being used for communication with Shri Ahadees for smuggling operations was registered in the name of one Shri Beisenbek Kaskyrbayev a Kazakhstani national but no such person was found at the given address. Enquiry with the Foreigners Regional Registration Officer, New Delhi showed that Shri Beisenbek left India on 21.4.2015 and was not in India when the connection was obtained in his name. Call details obtained from the telecom operator showed that there were calls between this number of Shri Sunny Kakkar and the number of Ahadees on 1.12.2015, 5.12.2015 and 7.12.2015 - the three days on which they had carried smuggled gold as per their statements. The present case pertains only to the gold seized on 7.12.2015. Based on these investigations it appeared that the 8 kg gold seized on 7.12.2015 was of foreign origin, smuggled into India and gold is not freely importable. It also appeared that as per Section 123 of the Customs Act the burden of proving that the gold was not smuggled rested on the person from who it was seized. 16. The show cause notice was issued to the appellant on 2.6.2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....successfully running the business of consultancy in aviation and the currency recovered from him is not exhorbitant in his business. 20. Personal hearing was fixed for several dates. The adjudicating authority changed and the new adjudicating authority (who passed the impugned order) fixed personal hearing on 27.9.2017 but neither the appellant nor Shri Ahadees appeared. A second personal hearing was fixed on 10.10.2017 during which Shri Ashutosh, Advocate appeared on behalf of the appellant and sought cross-examination of Shri Ahadees. Shri Nitin Johsi, Advocate appeared on behalf of Shri Ahadees and said that his client could not appear on that date and sought an adjournment. Third personal hearing was fixed on 24.10.2017 but again nobody appeared on behalf of Shri Ahadees. Fourth personal hearing cum cross examination before the adjudicating authority was fixed on 9.11.2017 and Shri Ashutosh, Advocate of the appellant appeared and cross examined Shri Ahadees record of the cross examination is as follows; Q.1 Are you permanent resident of Kerala? What is your age and qualification? Ans: Yes, I am 28 years old and graduate in BCA from Bangalore. Q.2. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om his possession to be released to him unconditionally. He further prayed that the vehicle recovered from his possession also should be released to him unconditionally. We, therefore, find no basis for the appellant to challenge the recovery of the gold when the entire prayer in this appeal itself states that the gold and the car were recovered from him. We also note that in the reply to the show cause notice before the adjudicating authority also the appellant never contested the recovery of the gold but only were legally imported into India. 23. The following other submissions were made by the learned counsel for the appellant : (i) The principles of natural justice were violated as no opportunity was granted to the appellant to represent the case by way of filing an oral and written arguments after the culmination of cross examination of Shri Ahadees K. On a specific query from the Bench as to whether the date fixed for cross examination was only for cross examination or cross examination and personal hearing learned counsel fairly submits that it was for both. On a further query as to any written request was made for further opportunity to make written submissions ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bars were smuggled and that they were not brought into India through any legal channel. In fact, he himself disclosed that the gold was sent by some person named Harish from Dubai. Investigation established that the appellant was knowingly involved in purchase of smuggled gold for monetary benefit. (iii) Appellant failed to produce any proof or document in support of his claimed retraction at the earliest opportunity. It is settled law that retraction from statements tendered under Section 108 of the Customs Act 1962, if any, needs to be addressed to the same authority. No such retraction in the instant case took place. (iv) Unscrupulous and covert activities resorted by the Appellant like(a) using mobile number of a fictitious person that was obtained using forged/fake documents, (b) choosing to take delivery of precious goods like gold bars at a public place rather than a safer place like his office/shop, and (c) ordering his driver to speed away the vehicle after seeing the DRI Officers on the day of interception i.e. on 07.12.2015 go to establish his mens rea behind the illegal acts of acquiring and disposing of the smuggled gold. All these activities have bee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hicle/Carriage proves that it was so used without the knowledge or connivance of the owner himself, his agent, and the person in charge of the Conveyance/Vehicle/Carriage. (x) A person in conscious possession and control of smuggled goods liable for confiscation becomes liable for penal action under Section 112(b) of the Customs Act 1962. 25. We have considered the submissions made by both sides and perused the records of the case. 26. The questions which need to be answered in this case are: (i) Were the 8 gold bars correctly confiscated under Section 111(b) and 111(d)? (ii) Is the confiscation of Mercedes car under Section 115 and its redemption on payment of fine of Rs. 10 lakhs correct? (iii) Was the fine of Rs. 50 lakhs correctly imposed on the appellant under Section 112(b)(i)? 27. We note that the confiscation of the cash under Section 121 and imposition of fine on Shri Ahadees have not been assailed before us. 28. The undisputed facts of the case are that the 8 bars of gold weighing 1 kg each were seized from the possession of the appellant. The bars were packed in a polythene bag with address of a jeweller from Dubai. Each of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....all under the category of smuggled gold as per Section 2(39). Another important section in this regard is Section 123 which reads as follows: SECTION 123 - Burden of proof in certain cases. - (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be - (a) in a case where such seizure is made from the possession of any person, - (i) on the person from whose possession the goods were seized; and (ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person; (b) in any other case, on the person, if any, who claims to be the owner of the goods so seized. (2) This section shall apply to gold, and manufactures thereof, watches, and any other class of goods which the Central Government may by notification in the Official Gazette specify. 33. Section 123 shifts the burden of proof from the Department to the person from whom the goods have been seized in respect to gold and certain other goods which are notified. Undis....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... These statements corroborate each other and with the panchnama. The cross-examination of Shri Ahadees by the learned counsel for the appellant also confirm the facts pertaining to this seizure and also that on previous two occasions smuggled gold was transacted between the appellant and Shri Ahadees. The mobile phone recovered from the appellant and which was used to communicate with Shri Ahadees was also obtained in the name of Shri Kaskyrbayev a Kazakhi national who was not even in India at the time the SIM card was issued which corroborates the clandestine nature of the transaction in the confiscated gold. 35. Thus, the seizure of the gold from the possession of the appellant as recorded in the Panchnama and admitted in the statement which is also affirmed the appeal before us by the appellant itself is undisputed. It is also undisputed that it had foreign markings and has been certified by the jewellery expert to be of foreign origin. The only question which remains is if it was legally imported or smuggled and the burden of proving that it was legally imported rests upon the appellant. There is not even an assertion in the application before the learned CMM by the appella....