AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 147
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....mber TS08 UD 0204 on 07.10.2020. The officers intercepted said car at Venkatachalam Toll Plaza, Nellore while coming from Chennai (at about 21.15 Hrs), in presence of the two Panchas. Two persons were found travelling in the said car. The driver thereof introduced him as Shri Pathan Jaffar Sadik and the co-traveller was identified as Shri Gudipati Subba Reddy. On being specifically asked about possessing/carrying smuggled gold of foreign origin, both of them admitted that they were carrying the gold on their person. They also admitted to not to have any bill/invoice for the said gold. Both of them were searched in the presence of both the Panchas. Shri Gudipati Subba Reddy removed a cloth belt tied to his waist, on opening whereof, two newspaper wrapped packets tied with rubber bands, were found in the said belt. On unwrapping, three unevenly shaped yellow metal bars having 999 mark on one side of bars and six small uneven sized pieces of yellow metal were recovered. Shri Pathan Jaffar Sadik also took out a newspaper wrapped packet tied with rubber bands from the pocket of his trouser. On getting it unwrapped, one un-evenly shaped yellow metal bar having 999 mark on one side of the....
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....se is an offence. They dealt with the purchasing and selling of such smuggled gold with clear knowledge that same was liable to confiscation. Shri Gudipati Subba Reddy in his statement dated 08.10.2020 also stated that he agreed to sell his 2000 grams of smuggled gold to Shri Suresh Kumar of Guntur who had a Jewellery Shop in Patnam Bazar area, Guntur. Shri Suresh Kumar was therefore examined who vide his statement dated 02.11.2020 though acknowledged his firm to be engaged in sale and purchase of gold and silver bullion and jewellery but he outrightly denied to know Shri Gudipati Subba Reddy. 1.4 Shri Pathan Jaffar Sadik retracted his statement vide his letter dated 21.10.2020 mentioning that on 05.10.2020, he was having a balance stock of gold ornaments in his shop, weighing 597 grams, he got those ornaments melted by Shri Jadhav Duryodhan, gold refiner at Narasaraopeta and obtained 500 grams of melted gold with 99.9% purity. A letter of said Shri Jadhav Duryodhan was also annexed therewith and it was said melted gold that he was carrying to Chennai to purchase some ornaments. However, because no deal could struck that he was returning back with the said 500 grams of melted go....
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....particular fact is impressed to be sufficient to hold that there is no cogent reason of any reasonable belief with the DRI Officers to hold the recovered gold to be a foreign origin. Thus the authorities below have wrongly invoked Section 123 of the Customs Act, 1962. It is further submitted that all the appellants have fully cooperated during the investigations and all relevant facts have duly been brought to the notice of DRI Officers. The requisite documents in the form of invoices of purchasing gold through Shri Shaik Imtiyaz were brought on record to prove that the gold in the hands of Shri Gudipati Subba Reddy and Shri Pathan jaffar Sadik was melted FT gold, hence, no question arises for it to be of foreign origin. It is mentioned that not only the confiscation has wrongly been ordered, the penalties on all the appellants have also been wrongly imposed. Accordingly, the order of Commissioner (Appeals) is prayed to be set aside and the appeals are prayed to be allowed. To support his submissions learned Counsel has relied upon the following decisions: (i) Amba Lal Vs. The Union of India and Others reported as 1961 AIR 264, 1961 SCR (1) 933 (S.C.) (ii) J. Sure....
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....parties. The points of adjudication to my opinion are as follows: (i) Whether Section 123 of the Customs Act, 1962 is invocable in the given set of circumstances. (ii) Whether the gold recovered in question was actually the gold of foreign origin illegally imported into Indian Territory and thus is liable for confiscation. (iii) Whether appellants are liable for penalty. 6. First point of adjudication Section 123 of the Customs Act postulates the theory of 'reverse burden of proof.' The Section reads as follows: 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 ow....
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....also the statement as recorded under Section 108 of the Customs Act are admissible in the evidence. Hon'ble Supreme Court in the case of Naresh J. Sukhawani Vs. Union of India reported as 1996 (83) E.L.T. 258 held that the statement recorded under Section 108 of the Customs Act, 1962 made before the customs officers is not a statement recorded under Section 161 of Cr.PC., for customs officers not being the police officers. Therefore, the statement got recorded by customs officer is the material piece of evidence which can be used as substantive evidence connecting the deponent with the contravention of the customs act. Thus, I do not find any reason to reject the statement of both the appellants from whose possession the gold in question was recovered about admitting the gold to be a foreign origin. Hence, I do not want to differ from the findings arrived at by the adjudicating authorities below that Section 123 Customs Act, 1962 has rightly been invoked. 6.3 In view of the above discussion it is held that Section 123 of the Customs Act, 1962 has rightly been invoked by the department. 7. Second point of adjudication The appellants have taken a plea that the seizure in que....
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....facts, I hold that there appears no evidence to prove the gold recovered from Shri Gudipati Subba Reddy is the gold which got melted by Shri Shaik Imtiyaz. This observation receives corroboration from the statement of Shri Shaik Imtiyaz that shape of remelted gold given to Shri Gudipati Subba Reddy was always used to be uniform in one shape and the pieces were never used to be uneven broken or cut. He even stated that he cannot remember that he had melted a large quantity as that of 2000 grams of gold on 06.10.2020. Similarly Shri Jadhav Duryodhan also acknowledged melting gold for Shri Pathan Jaffar Sadik but he also has emphasized that he always used to return the melted gold into one piece of uniform shape instead of those being into several pieces of cut and uneven shape. Apparently and admittedly the gold recovered from the possession of Shri Gudipati Subba Reddy was in the form of two gold bars and six small uneven and cut pieces and the one recovered from Shri Pathan Jaffar Sadik was in the shape of one bar and three small uneven cut pieces of gold. These observations are sufficient for me to hold that even the retracted version receives no cogent proof rather it is highly i....
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....ncealed in the shoes and secret pockets of the backpack. Learned counsel submitted that this should apply to only cases when the goods are being unloaded and not when the goods are being carried domestically in train. We have considered this argument. The section applies either before or after unloading. Thus, if smuggled goods are unloaded after concealing then by this logic it should not matter that they were being carried in a concealed manner. A smuggler carrying a jacket full of gold biscuits can land and once he unloads the jacket, if the argument of the learned counsel is accepted, the concealment should not matter. 7.6 A careful reading of section 111(i) shows that it does not matter whether the concealment was before or after unloading so long as the concealed goods are either dutiable or prohibited goods. Dutiable goods as per section 2(14) means any goods which are chargeable to duty and on which duty has not been paid. Thus, once the duty is paid on the imported goods, they are no longer dutiable goods. Thereafter, one is free to carry them wherever, in any manner whatsoever they please. For instance, if any goods were imported and the duty has been paid on them, whe....
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....eady mentioned above nothing is produced by any of the appellants. 7.8 I also observe that gold of Indian origin is generally of 916 purity (22 carat). Bureau of Indian standards has certified BIS 916 22 carat, BIS 958 23 carat, BIS 750 18 carat, the 999 quality is the 24 carat gold. It is 22 carat gold which is used in ornaments. Hence for India, the most popular quality of gold is BIS 916 instead of 999. Admittedly the recovered gold was of 999 quality. Apparently the melters of the gold have acknowledged that FT gold that is the gold received after melting the ornaments is generally of 95 to 99.5 purity. One of the melter has apparently gone to the extent of admitting that FT gold can never have 999 purity. None of the appellants have placed on record any evidence showing as to how the gold recovered from them was having 999 purity. On the contrary, the gold of foreign origin is always of 999 purity. In any case, since it was under the reverse burden policy that the appellants had to prove for the recovered gold to not to be the smuggled one but no evidence is produced on the record which may discharge the said burden of the appellants. Hence, I find no reason to differ with ....
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....the object which the Legislature had in view. In a subsequent decision by Hon'ble Supreme Court in the case of Superintendent and Remembrancer of Legal Affairs to Government of West Bengal Vs. Abani Maity AIR 1979 SC 1029; (1979) 4 SCC 85, 90, the law is stated in the following terms: "19. Exposition ex visceribus actus is a long recognized rule of construction. Words in a statute often take their meaning from the context of the statute as a whole. They are, therefore, not to be construed in isolation. For instance, the use of the word 'may' would normally indicate that the provision was not mandatory. But in the context of a particular statute, this word may connote a legislative imperative, particularly when its construction in a permissive sense would relegate it to the unenviable position, at it were, 'of an ineffectual angel beating its wings in a luminous void in vain'. 'If the choice is between two interpretations', 'the narrower of which would fail to achieve the manifest purpose of the legislation, we should avoid a construction which would reduce the legislation to futility and should rather accept the bolder construction based on the view that Parliament would l....