TaxTMI 
TaxTMI 
2023 (12) TMI 1156
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....old by Touch Stone Method and certified the recovered gold collectively weighing 1199.550 gms. Of foreign origin valued at Rs.30,90,109/-. Further, the said recovered 11 pieces of foreign origin gold were seized under Section 110 of the Customs Act, 1962 in absence of any documents evidencing licit possession, on the reasonable belief that the same are liable for confiscation under the provision of Customs Act, 1962. 2.(i) Shri Amti Deshmukh, a Smelter, in his statement dated 29.01.2015 recorded under Section 108 of Customs Act, 1962, inter alia, stated that Shri Ranjit Rawat, employee of shri Shankar Lal Goyal had come with 1 kg. bar bearing foreign marking along with one biscuit of 116.6 gms and 8 cut pieces and a half of 116.6 gm. Piece for melting. 2.(ii) Shri Ranjit Rawat, employee of Shri Shankar Lal Goyal, Prop. of M/s. Rahul Jewels, in his statement dated 29.01.2015 recorded under Section 108 of Customs Act, 1962, inter alia, stated that his job was to take 24 carat foreign marked gold biscuits for melting from Shri Shankar Lal and after getting the gold melted, get the melted gold back from the smelter; that he had been doing this job for around last 3-4 years. Furth....
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..... 4. After completing the investigation, show cause notice dated 27.07.2015 was issued as to why the gold recovered should not be confiscated under Section 111(d) read with Section 120 of the Customs Act, 1962 and appropriate customs duty on the seized gold should not be recovered under Section 125 of the Act and penalty should not be imposed under section 112 of the Act. The show cause notice was adjudicated by the order-in-original dated 31.01.2017, whereby the adjudicating authority concluded that the appellant was knowingly involved in the handling of the smuggled gold of foreign origin, and was in conscious possession and he failed to discharge the onus on him that the seized gold was validly imported. The gold having been imported in contravention of the provisions of the notification no.12/2012 - Custom dated 17.03.2012, as amended, read with Section 11 of the Customs Act, and section 3 of the Foreign Trade (Development and Regulation) Act, 1992 was liable for confiscation under section 111 of the Customs Act and thereby liable to penal action under section 112(b) of the Act. The appeal filed by the appellant challenging the said order was dismissed by the impugned order ....
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.... cut pieces which has also been admitted by Ranjit Rawat in his statement that he had taken 1200 gms gold biscuits (foreign marked) for melting to Shri Amit Deshmukh. The appellant Shri Shankar Lal Goyal in his statement dated 29.01.2015 under Section 108 of the Act admitted that he purchased one kg. of foreign marked gold bar without any bill. In the synopsis and submissions filed by the appellant, he has categorically stated in the opening paragraph that the present appeal relates to seizure of 11 cut pieces of gold weighing, 1199.550 gms. valued at Rs.30,90,109 from a melter, Shri Anil Deshmukh belonging to the present appellant. Thus appellant is the owner of the gold recovered which have been found to be of foreign origin without any bill or any supporting document. 9. The basic challenge by the appellant is that the gold is not a 'prohibited item' and is not liable to be confiscated absolutely, more so when there was no proposal in the show cause notice. We do not find any merit in the submissions made by the appellant and the law on the issue is well settled by several judgements of the superior courts. Before adverting to the decisions, the statutory definition of 'prohi....
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.... can be stated that (a) if there is any prohibition of import or export of goods under the Act or any other law for the time being in force, it would be considered to be prohibited goods; and (b) this would not include any such goods in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either 'absolutely' or 'subject to such conditions' to be fulfilled before or after clearance, as may be specified in the notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specified in sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods." 12. Similar issue was raised before the Madras High Court in the case of Malabar Diamond Gallery P. Ltd Vs. Ad....
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....dia is highly regulated and bulk importation of gold item could only be affected by the nominated banks, agencies or business houses in the manner laid down by various DGFT regulations as well as the RBI circular or by the eligible passengers in the manner provided by the relevant regulations as the main object of the Customs Act is to prohibit smuggling of goods and sternly deal with the same as can be gathered on a conjoint reading of Section 2(25),11(2)(c), 111 and 112 of the Act. The concluding para reads as under: "70. In the foregoing discussion, we answer the issues framed to the effect that Section 2(33) of the Act shall also include importation of such goods within the scope of "prohibited category" with regard to which the mandatory condition under the Act as also in other relevant notifications/circulars issued by the DGFT, the RBI or any other authority have not been complied with ,or in other words the restrictions imposed by the concerned authorities have not been adhered to. We further have no hesitation in holding that the importation of the gold is a prohibited item within the meaning of Section 2(33) of the Act; and that redemption in case of imposition o....
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....This in fact reaffirms our conclusion that Section 2(33) would not only cover situations where an import may be prohibited but also those where the import of goods is either restricted or regulated. A fortiori and in terms of the plain language and intent of Signature Not Verified Digitally Signed By:NEHA Signing Date:21.08.2023 17:00:50 Section 2(33), an import which is effected in violation of a restrictive or regulatory condition would also fall within the net of "prohibited goods. 147. We are further of the considered opinion that the absence of a notification issued under Section 11 of the Act or Section 3(2) of the FTDR would have no material bearing since a restriction on import of gold stands constructed in terms of the FTP and the specific prescriptions forming part of the ITC (HS). Those restrictions which are clearly referable to Section 5 of the FTDR and the relevant provisions of that enactment would clearly be a restriction imposed under a law for the time being in force. Once the concept of prohibited goods is understood to extend to a restrictive or regulatory measure of control, there would exist no justification to discern or discover an embargo erected e....
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....appellant and whether it has to be treated as 'prohibited goods' on conjoint reading of Section 2(33) defining prohibited goods and Section 11 of the Act prohibiting importation and exportation of goods. The appellant in the present case has not been able to produce any documents to show that the gold in question (foreign origin) recovered was validly imported by paying requisite customs duty as gold falls in the category of 'dutiable goods', that is goods chargeable to duty and on which duty has been paid. Infact in his statement recorded under Section 108 of the Act, the appellant admitted that he did not have any legal document to prove the possession of the gold of foreign origin. Though the appellant stated that he purchased 1 Kg. gold of foreign origin from M/s Sai Buillion out of which he sent around 920 gms plus 116 gms. and 50gms of Biscuits to Shri Amit Deshmukh through his employee Shri Ranjit Rawat but on the contrary, M/s Sai Bullion not only denied having sold any gold bar to the appellant but also stated that the son of the appellant, namely Shri Rahul on 29.01.2015 had approached M/s Sai Buillion to provide them for a bill of 1 Kg. gold which they declined to do so ....
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....nded premises and was in possession of documents evidencing licit acquisition of primary gold bars and gold jewellery and therefore could not have been regarded as prohibited. Considering this, the provisional clearance of the gold, gold jewellery, and silver was allowed. Thus the said case is not applicable to the facts of the present case and the appellant is not entitle to claim any parity on that basis as he has miserably failed to show the procurement and the possession of the gold by way of any legal document and hence we are of the view that no reliance can be placed on the said orders. 17. Having come to the conclusion that the gold seized of which the appellant claimed to be the owner without any valid documents of purchase, has to be treated as 'prohibited goods' and gold falls under the category of 'dutiable goods' but the appellant failed to prove that the liability to pay the customs duty was discharged and by necessary implication the seized gold are 'smuggled goods', we further hold that the seized goods are liable for confiscation under Section 111(d) whereby goods which are imported or attempted to be imported contrary to any prohibition imposed by or under the ....
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....the Customs Act the Court rejected the prayer for provisional release of the goods, observing as under: "93. Keeping in mind, the objects and purpose for which, Customs Act, 1962, is enacted, dealing with prohibition/restriction, this Court is of the considered view that the competent authority, has to arrive at a satisfaction, as to whether, goods seized and liable for confiscation, can be released provisionally, pending adjudication, and in that context, the role of the Courts, in exercise of the powers, under Article 226 of the Constitution of India, should be confined only to test such satisfaction, arrived at, by the competent authority, with regard to the objects of the Customs Act, 1962 and any other law for the time being in force. When the competent authority, under the Customs Act, 1962, makes a plea that there is a prima facie case of smuggling and that the appellant has failed to discharge the burden, in terms of Section 123 of the Customs Act and when the adjudication proceedings are pending, we are of the considered view that it would be appropriate to direct provisional release? 95. Under the Customs Act, 1962, the authorities are duty bound to pass....
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....cording to the rules of reason and justice; and has to be based on relevant considerations. The quest has to be to find what is proper. Moreover, an authority acting under the Customs Act, when exercising discretion conferred by Section 125 thereof, has to ensure that such exercise is in furtherance of accomplishment of the purpose underlying conferment of such power. The purpose behind leaving such discretion with the Adjudicating Authority in relation to prohibited goods is, obviously, to ensure that all the pros and cons shall be weighed before taking a final decision for release or absolute confiscation of goods." 17.(iv) In Nidhi Kapoor (supra), the Delhi High Court while holding that an infraction of a condition for import of goods would also fall within the ambit of section 2(33) of the Act, and thus their redemption and release would become subject to the discretionary power of the Adjudging Officer, also observed : "136. We also take note of the significance of Section 111 of the Act which deals with the confiscation of improperly imported goods. While dealing with the circumstances in which the imported goods may become liable for confiscation, the provision f....
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....LT 136, where it has been held that it is a basic and settled law that what has been admitted need not be proved. We therefore reject the contention as raised on behalf of the appellant as frivolous and baseless. 20. Lastly, the learned Counsel for the appellant submitted that request was made for retesting of the seized gold by melting purity because the contents of the Panchnama was not recorded correctly and the purity certificate was also issued without any basis but the same was not allowed. We find from the records that on 29.01.2015, on the date of search itself, a Certified Jewellery Appraiser was called on spot who tested the recovered gold by touchstone method in the presence of two independent witnesses and certified the recovered gold. In order to deal with this contention, we would also rely on the decision of the High Court of Kerala in the case of Mammu and another Vs. Assistant Collector of Central Excise - 1984 (171) ELT 54, where it has been held that, since no definite tests have been prescribed under law, whether an article is gold of particular quality and purity, it has to be borne in mind that the opinion of an expert on this point is relevant under Sectio....