TaxTMI 
TaxTMI 
2023 (7) TMI 1131
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....the office of DRI, at CGO Complex, New Delhi and upon systematic search of the car, resulted in recovery of 61 pieces of yellow metal from a cavity near the gearbox. These pieces of yellow metal were marked as serial number 1 to 61 as detailed below:- Marking No. Given by the officers Description written on the yellow metal bar Total Quantity 1 to 2 FDREMPO 165 grams each bar X 61 bars or 10,065 grams 3 to 5 FDREOLO 6 to 10 FDEREMJO 11 to 15 EDFOGO 16 to 61 R-7 3. Upon personal search of both the persons nothing incriminating was found. The pieces of yellow metal were appraised by the Jewellery Appraiser - by Mr. Vikram Bhasin, who assessed all the metal pieces/bars as of gold, having 995 purity, totally weighing 10,065 grms, valued at Rs. 2,85,25,430/-. On being asked the said persons Mr. Karan Singh and Mr. Sohan Singh could not produce any valid documents for the legal import/possession of the said gold bars. Therefore, on a reasonable belief that the aforementioned gold bars were smuggled and were liable for confiscation under Section 111 of the Act, and the vehicle used for the purpose of smuggling of the said goods was also liable for confis....
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....as to be handed to him at his Karol Bagh shop. Further submitted that the said gold did not belong to him. He admitted his involvement in smuggling of gold in past also and explained the modus operandi and name of other persons involved in it. The Appellant was put under arrest on the same day, that is, 14.12.2018. Mr. Anshul Jain inter alia also stated that he had started his shop in October 2014 in the name of 'Surya Jewellers' at Karol Bagh. He deals in trading of gold jewellery and gold bullion. Further stated, he used to purchase jewellery from various jewellers in Karol Bagh and Kucha Mahajani, Chandani Chowk in Delhi and thereafter, sell the same from the shop mostly on wholesale basis and sometimes on retail. He also stated that most of the payment to the sellers for purchase of gold bars are made through RTGS/bank and sometimes he does dealing of the gold bars in cash. On being shown the punchnama dated 13 December 2018, regarding seizure of gold along with the Creta car and the photographs of the 2 persons intercepted with the car, he identified Mr. Karan Singh, but did not recognise Mr. Sohan Singh. He further stated that the said gold belongs to 2 persons namely Mr. Ram....
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....d floor, Beadonpura, Karol Bagh, New Delhi vide punchnama dated 14.12.2018 were examined by Mr. Vikram Bhasin, jewellery appraisar on 17.12.2018 in presence of Shri Ghanshyam Jain (father of Appellant). As per the appraisal report, the 3 pieces of metal bars were of silver having purity 999 and weighing 1454.99 grms in total. The market value of the 3 silver bars was assessed at Rs. 59,332/- (tariff value Rs. 55,853). 11. Summons were issued to Meenu, Jatin and Harish who were stated to be living with Karan Singh and Sohan Singh (in Noida flat) and engaged by the Appellant - Anshul Jain, for assisting in smuggling. But none of them appeared for recording of the statement. 12. In a subsequent statement recorded on 15.02.2019, the Appellant inter alia stated that he could not contact Mr. Jeevan Singh as his mobile number is switched off and could not get any information about Mr. Ramey and Mr. Thomas. Further stated that Mr. Jeevan Singh used to work at Omji Ashahram Tounch at Karol Bagh. However, due to sealing of the shop, Jeevan Singh left Delhi after that. Further stated that he knew Jeevan Singh since 2012-13 and used to send gold for purity testing at his shop. On being asked....
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....ips to Purnia for carrying gold to Delhi. At Purnia, they used to meet Shri Babu Maan and Shri Mukesh Singh Rajput who used to deliver the gold and hide the same in the car at Purnia. 17. During the search of flat at Noida where Karan Singh, Sohan Singh and other carriers were living, three notepads were found. On being shown, the notebook No. 1 to Karan Singh, he stated as follows: Page No. Details as stated by Karan Singh in statement dated 14.12.2018 Page No. 1 Payment received from Shri Anshul Jain to him in lieu of delivery of gold from Purnia to Delhi Page No. 3 Payment made to staff from payment received at Page No. 1 Page No. 5 Travelling and car expenses incurred during trip by various staff (Babu, Ravi, Jatin, Harish, Mohit, Soni) Page No. 7-9 Home/Daily expenses (Noida flat) incurred by staff) Page 10 Travelling and car expenses incurred during trip by Soni 18. Further the said notebook also contains the details of payment by Karan Singh to other staff/carriers. 19. Notebook no. 2, it appeared contains the details of expenses, incurred by Shri Mohit for home and car service expenses. Also recorded is receipt of Rs. 22000/- on 19.11.2018 and Rs.....
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....uggled nature and were being brought to Delhi for sale. Thus it appeared that all these persons were involved in the activity of smuggling by way of possessing, concealing, carrying, transporting etc. as regards the said goods which they knew or had reason to believe were liable to confiscation under the provisions of the Customs Act. 27. Accordingly, SCN dated 03.06.2019 was issued by the DRI, DZU, New Delhi being SCN No. 19/2019 proposing to confiscate the seized gold being 61 gold bars totally weighing 10.065 kgs having market valued of Rs. 3,46,87,700/-, seized on 13.12.2018, under Section 111(d) & (e) of the Act. Further proposed to impose penalty on the appellant (ii) Shri Karan Singh and (iii) Shri Sohan Singh under Section 112(b) (i) of the Customs Act for the acts of omission and commission, as aforementioned. 28. The SCN was adjudicated on contest vide O-I-O dated 26.12.2019, ordering absolute confiscation of the seized gold bars totally weighing 10.065kg having market value of Rs. 3,46,87,700/- under Section 111 (d) & (e) of the Act. Further, absolute confiscation of the three silver bars totally weighing 1454.99 gms valued at Rs. 59,332/- under Section 111 (d) & (e) o....
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..... vi. that in the said Panchnama it is mentioned that the signatories of the Panchnama i.e. Mr. Karan Singh, Mr. Sohan Singh, the Investigating Officer and the Panchas have appended their signatures. But in reality there is no such signatures on the said Appraisement report. The facts recorded under paras of the Panchnama were thus manipulated. vii. that the Respondent has erred in not appreciating the fact that due to irregularity in the Panchnama, the Appellant had requested for cross examination of the Panchas and the Officials under guidance of whom the same was made. That the Hon'ble Delhi High Court in a catena of judgments has held that Panchnama is the statement of Panchas as they are independent witness to recovery made. In this regard, reliance is placed upon case law of Commissioner of Central Excise, Delhi-| Vs. Kuber Tobacco India Ltd. (2016 (338) E.L.T. 113 (Tri. - Del.)]; viii. that the Appellant has challenged the veracity of the Panchnama and even disputed the recovery of gold in the presence of panchas; thus it was incumbent upon the Respondent to address the issue and should have allowed the request of the Appellant of cross examining the Panchas and....
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....m (2008 (13) SCALE 386], XIV. that imposition of penalty upon the appellant for the alleged offence(s) based on the uncorroborated testimonies is wholly illegal. Where there is no corroboration of the statement of co-noticee by other evidence, the other Noticee (i.e., the present appellant herein, Mr. Anshul Jain) cannot be held guilty of the alleged offence or contravention of the provisions of law alleged against him-in the present case, as alleged in the show cause notice. And, that corroboration has to be from an independent source. XV. that the learned respondent failed to consider that the appellant requested to summon Mr. Karan Singh and Mr. Sohan Singh, for cross-examination by the appellant, to ascertain the above stated facts and to satisfy the two fold test laid as a principle, for their respective statements and to ascertain as to on what basis they or any one of them had named the appellant herein, as being involved in the alleged act of smuggling and/ or have worked under the instructions/ directions of the appellant and to further bring on record the truth of the matter. Further the persons who named the present appellant have never responded to the summons sen....
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....ubmitted that provisions of section 112(b)(i) of the Act permit imposition of penalty on a person who acquires possession or is in any way concerned in carrying, removing etc. any goods, which the person knows or has reason to believe, are liable to confiscation under Section 111 of the Customs Act. The department has failed to bring on record any evidence which would prove and/ or establish the fact that the appellant had such knowledge and, therefore, the provision is not attracted. Neither is there any material available on record in the show cause notice to ascribe any knowledge or belief of the appellant. Therefore, penalty under section 112(b)(i) of the Act is not imposable on the appellant. The appellant would place reliance on the judgment of the Hon'ble Calcutta High Court rendered in the case of Commissioner of Customs Vs. Sanjib Kr. Deb, reported in 2018 (359) E.L.T. 325 (Cal.) wherein on the similar facts, where the department had failed to prove the ingredients of section 112(b) of the Act, qua the person, it was held that penalty under section 112(b) of the Act is not imposable. XIX. that the Respondent failed to appreciate that in the present case there is sei....
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....the Court of the Learned CMM, Patiala House Courts, Delhi. (iii) The statements of other Co-Noticees and the appellant are conflicting and therefore cannot be relied upon as seen from the following:- a) Karan Singh stated that the appellant's partners - Jatin, Sohan Singh, Harish and Meenu live in a rented flat in Noida provided by the appellant, for which Jatin pays rent to the landlord, but the appellant pays to Jatin. However, this defies logic because if the appellant has taken a house on rent, then he will pay directly to the landlord and not to Jatin. Furthermore, no Lease Deed has been produced by the Department. b) Karan Singh states that the appellant provided the car to him to bring gold from Purnea to Delhi. But he later states that the car is registered in Sohan Singh's name. The Departmental investigation also shows that the car was registered in the name of Sohan Singh and price was paid for by him. The appellant neither paid for the car, nor is it registered in his name. c) Karan Singh states that Mukesh and Babu Maan (partners of the appellant) in Purnea gave Karan Singh the gold and concealed it in the car. However, the appellant in his statement on 13/....
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....ing on the two silver bars clearly show that these were for display at the shop window. Moreover, in reality, Bills/Invoices for purchase of silver were given to the Adjudicating Authority, namely Invoice No SVJ/22 dated 25.10.2018, SVJ/35 dated 06.11.2018 and SVJ/36 dated 07.11.2018 from M/s Siddhi Vinayak Jewellers, 1167, 2nd Floor, Kucha Mahajani, Chandni Chowk, Delhi-110006totally amounting to 1482 gms which were then converted into the aforementioned three bars by local job workers. Also, tenets of Section 138B were not followed by the Adjudicating Authority. Thus, Section 123 Customs Act is not attracted for the seized silver as proper invoices were given and the fake same Serial numbers and fake foreign markings clearly show that it was locally purchased. Furthermore, it is not unusual for a jeweller to own silver worth Rs.59,332/-. Therefore, the silver is requested to be returned to the appellant. 31.3 As seen from his statement dated 15.2.2019, the appellant was shown alleged print outs of photos recovered from his mobile phone, to which the appellant replied that these referred to weight & measurements of gold in the normal course of business of trading in gold bullion.....
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.... of the country like Uttar Pradesh, Bihar, Assam and West Bengal. However, this has nothing to do with the case of the appellant. There is no evidence of the appellant ever going to these places. 31.8 The phone numbers being attributed to the appellant do not belong to him since the appellants name was never found in Karan Singhs phone. The Department is alleging that the appellants name was saved as "AB" or "Ani" on the basis of a retracted statement, and no other proof. 31.9 There is no CDR showing the appellants conversations with the co-Noticees near the date when the case was booked. 31.10 Even otherwise, there is no foreign marking on the gold and it is of purity 99.5% showing that it is domestic gold and not foreign gold. Domestic gold being usually of 99.5% purity, has been held in a catena of judgements, viz Final Order No 71671-71672 dated 04.09.2019 in Appeal Nos C/70395-70396/2019 titled as Neeraj Aggarwal &Bipat Bind vs Commissioner of Customs (Preventive) Lucknow. 31.11 Presumption under Section 123 applies only on people from whose possession gold is found or who claim ownership of the gold. Since the gold was never seized from the appellant's possession (but fro....
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.... appellant. 32.1 Further, in the statement recorded of the appellant on 14.12.2018 by the officers, he has admitted that he knows Mr. Karan Singh and also engaged him for the purpose of carrying of gold on behalf of Mr. Ramey and Mr. Thomas, who were residents of Guwahati (Assam). The appellant also admitted that the seized gold was supposed to be delivered to him at Delhi. He further stated that he was also working for the said Mr. Ramey and Mr. Thomas. He used to deliver the gold after receiving, as per the directions of Mr. Ramey or Mr. Thomas. Further urges that the plea for cross- examination does not carry much weight, when all the three accused/noticees were involved in smuggling in connivance with others. He relies on the ruling of Telangana High Court in Mohammad Muzammil vs. CBIC 2021-376-ELT-46 wherein the court observed: "Therefore, we are of the opinion that no prejudice has been caused to the petitioner by the action of the second respondent in denying the opportunity to cross examine to the other person who have implicated them in the said act of smuggling." 33. Reliance is also placed on the ruling in Janki Das Madan and others vs. CCE, New Delhi, C/51684-51686....
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....channel to the seller. From the facts on record, it is not established that this appellant was paying the rent for the Noida flat, where other persons alleged to be involved in smuggling were living. Further, I find no statement have been recorded of the landlord in support of allegation of the revenue. Further admittedly gold in question does not belong to this appellant, nor he has claimed the said gold from the department. I find that revenue had not made any effort to make enquiry from the said Mr. Ramey and Mr. Thomas, who were said to be the owners of the gold in question. I further find that in view of retraction made by the appellant and other conoticees, it was incumbent on revenue to examine the witnesses in the adjudication proceedings, as required under Section 138B of the Act. I further find that the whatsapp chat relied upon by revenue is also not supported by the appropriate certificate as required under Section 138C of the Act. I further find that revenue have placed reliance on the diary, stated to be recovered from the Noida flat, but I find that appellant was never put any question regarding the contents of the said diary. Thus the contents of the said diary have....