TaxTMI 
TaxTMI 
TaxTMI 
2024 (3) TMI 810
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....pellant and/or his firm M/s Venkateshwara Jewellers. 3. The brief facts are that the DRI officers at about 03.20 hours on 10.03.2020 intercepted the bus registeration number AR 01J5225 at Venkatachalam toll plaza, Nellore district. The officers identified the passengers namely Mr V. Kranti Kumar (VK Kumar for short) and Mr T. Prasannanjaneyulu (TP for short). On being asked both Mr VK Kumar and Mr TP admitted that they are carrying gold about one KG each, which is kept in a tailor made cloth belt with a zip and is tied around their waist. On being asked by the officers whether they were carrying any purchase/transport documents for the gold and from where they had purchased, both informed that they have purchased gold at Coimbatore on cash payment and they were not carrying any documents/ purchase bill for the gold they were carrying. Accordingly, the officers detained both the Appellants and took them to DRI office at Nellore. On reaching the DRI office, both the Appellants/staff took out the gold and placed it on the table before the officers. Mr VK Kumar placed one yellow coloured metal bar and 4 small pieces of yellow coloured metal and Mr TP placed one yellow coloured metal b....
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....s and voucher, and hence is liable for confiscation under the provisions of Customs Act. Accordingly, the officers seized the said goods/gold along with the packing/cover used to wrap and carry the gold. The gold recovered from Mr. VK Kumar - one Gold bar and 4 small pieces of gold, totally weighing 1004.160 gm was put in a box marked M1. Further, the gold recovered from Mr TP namely, one gold bar and 5 small pieces of gold, totally weighing 1152.210 gm was put in a box marked M2. Panchnama was drawn in presence of panchas which was concluded on 10/03/2020 at 16.00 hours. 7. Statements of both Mr VK Kumar and Mr TP were recorded under Section 108, by the officers on 10/03/2020. They, inter alia, stated that Mr. VK Kumar is working since November 2019 with Venkateshwara jewellers, as clerk and Mr TP is working since January 2020, as clerk. Both were also carrying gold on the instructions of the owner/employer, who dropped them at the bus stop on 08/03/2020. As per instructions, they left for Coimbatore with total cash of Rs.93 lakhs. On reaching Coimbatore on 09/03/2020, they went to M/s Kubera bullion at Raja Street where they met Mr B. Suresh, owner of the shop. They handed over ....
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....ales to various jewellery shops. On specific query, he stated that they receive payment for the sales made through online transfer by RTGS/NEFT. He further stated that they do not mention the serial numbers/markings of gold bar in their invoices. On specific query if they effected sales of gold bullion on cash basis, he denied and stated that they do not effect sales of gold bullion on cash basis. However, if any customer approaches them to purchase gold on cash payment, he makes arrangement by identifying some person from the market who is ready to sell on cash basis and receive commission of Rs.2000/- per kg from the purchaser. Further, on specific query, he stated that on 08/09.03.2020, unknown persons from Andhra Pradesh/Telangana approached him and requested for purchase of 2.160kgs of gold bullion on cash basis. Since he was not having sufficient stock, he made arrangement to purchase gold from unknown persons available in the market and he received commission of Rs.4300/- (@ Rs.2000/- per kg). He further stated that he did not have the details of the said two persons. As regards shortage of 910gms of gold found on comparison of stock as per records, he stated that the shorta....
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....Coimbatore with gold, he instructed his clerks to come back along with the gold. Accordingly, the said clerk Mr. V. Kranti Kumar informed him that he has booked his return journey in the evening of 09.03.2020 and will reach on 10.03.2020. In the morning of 10.03.2020, when he tried to contact his clerks over phone, their phones were not reachable. As he was down with high fever and cold coupled with restlessness and anxiety about gold, he could not take any steps immediately. Later on he was informed through his friend that gold was seized by DRI officers and his two clerks have been taken into custody. The appellant thought that gold has been seized in connection with moral code of conduct pertaining to Panchayat Raj elections, as he never heard about the DRI before. In view of the disturbances, due to corona virus, he sent his statement by email to the DRI on 23.03.2020 itself. In support of his contentions, he undertook to produce their stock register, GST Returns, Income Tax Returns, etc. He denied the depositions made by his clerks as to the bars being purchased at Coimbatore on payment of cash. He categorically stated that the gold is arising out of his stock of old jewellery....
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....ry at Narasaraopet was recorded by the officers on 11.11.2020. He, inter alia, stated that he is running a gold refinery and does not have GST registration. He never issued bills or invoices to anybody. Further, he stated that after receipt of gold ornaments from his customers, he separates the stones, if any, thereafter, gold is poured in a mould (musa) and melted in a furnace (batti); the molten gold is poured into a mould dye (gaadi raayi) and converted into solid form and delivered to his customers. On being asked by the customers to purify the gold, the gold converted into solid state is cut into pieces melted with silver balls in a furnace and then poured in a bucket of water; after cooling of the same, balls are formed which are filled in a Borosil bowl to which nitric acid is added; the gold balls convert into Coffee colour powder and settle at the bottom; this powder is pure gold. The coffee coloured powder is again poured in a mould, melted and poured into a mould dye. Such purified gold is then delivered to the customers. His refinery has mould dies of 10gms, 100gms and 500gms; as per the requirement of customer, pure gold bar is delivered. He further stated that Mr. Vij....
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....0 and also followed by a signed paper copy, received through post by Revenue on 29.06.2020. 12. It appeared to Revenue that the seized gold bars/pieces totally weighing 2156.370gms, seized jointly from Mr. V. Kranti Kumar & Mr. T. Prasannanjaneyulu, the source of which has not been reasonably explained and appeared to be of smuggled nature and further, the explanation of source given by the person claiming i.e., Mr. P.V.M. Jagannadha Rao, as herein above stated, is not reliable. SCN dt.25.02.2021 was issued proposing to confiscate the seized gold - 1 gold bar and four small gold pieces totally weighing 1004.16gms valued at Rs.43,24,415/- seized from Mr. V. Kranti Kumar; and 1 gold bar and five small gold pieces of remelted gold totally weighing 1152.21gms valued at Rs.49,61,992/- seized from Mr. T. Prasannanjaneyulu are liable to confiscation under Sec 111(d) & 111(o) of the Act and Mr. P.V.M. Jagannadha Rao was also added as co-noticee in the proposal for confiscation. Further, penalty was also proposed on all the three persons. Mr. B. Suresh Babu of Kubera Bullion was also added as co-noticee, proposing to impose penalty under Sec 112(a) & 112(b) of the Act. 13. The SCN w....
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....nnadha Rao (owner) has led cogent evidence by producing his business records, which covers the seized gold in question. Further, at the very first instance, after interception, Mr. P.V.M. Jagannadha Rao, in his statement sent to the DRI on 23.03.2020, had stated these facts. At the very first opportunity, when his statement was recorded by the officers, he has denied the statement recorded from his two staff at the interception cum seizure on 10.03.2020. He further stated that admittedly, both the said staff have also retracted their statements which was recorded by the officers on 10.03.2020 at the time of interception/panchanama proceedings. The cogent evidence led by the appellant has not been found to be untrue. Further, he urges that the statement recorded by the officers from his two staff on 10.03.2020 is the sole basis, as read with the statement of Mr. B. Suresh Babu, partner of Kubera Bullion. The said statements only raise assumptions and presumptions, having no legs to stand. 17. It is furthe urged that the appellant/claimant - Mr. PVM J Rao has filed statement of gold for the financial years 2018-19 and 2019-20, copy of delivery challans dt.25.02.2020 & 03.03.2020, is....
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....dmittedly, in the facts of the present case, the gold bars are of irregular size and weight, having no foreign markings. Thus, there is no evidence on record as to the smuggled nature of the gold in question. Admittedly, it is a case of town seizure and the person carrying gold was travelling from Coimbatore to Narasaraopet/Vijayawada. Thus, there is no basis available to Revenue for forming the opinion that the gold in question is of smuggled in nature. The said presumption is solely based on the statement recorded from other two appellants, namely, Mr. VK Kumar and Mr. TP, whose statements are more or less pari materia, which also indicates that both these persons have signed on the statements as dictated by the officers. Further, Revenue has failed to examine its witnesses in the course of adjudication proceedings, in spite of specific prayer by the appellant/claimant - Mr. PVMJ Rao. Such evidence recorded under Sec 108 during investigation of the other appellants as well as Mr. B. Suresh of Kubera Bullion, is fit to be rejected being inadmissible under the provisions of Sec 138B of the Act. The statement of the alleged seller Mr. B. Suresh of Kubera Bullion, Coimbatore, is also....
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....d bars seized. I further find that the statements recorded by Revenue from both the appellants/staff - Mr. VK Kumar and Mr. TP are pari materia and hence, it is apparent that such statements are not freely given but the person deposed have signed on the dotted line. Similarly, the statement of Mr. B. Suresh recorded under Sec 108 also does not inspire confidence. The officers did not pose any question to him as to how he came in contact with unknown persons, did he have their mobile numbers and what is the basis of stating that the gold sold through him by unknown persons was smuggled gold. It is also beyond comprehension that a person engaged in gold business for a long time, not usually entertaining cash dealings, will get involved in facilitating the purchase of smuggled gold from unknown person for a paltry commission of Rs.2,000/- per kg. I further find that the statement of Mr. B. Suresh is not admissible for denial of cross-examination and accordingly, the same is inadmissible in terms of Sec 138B of the Act. 24. I further find that the appellant/claimant - Mr. PVMJ Rao has lead cogent evidence with regard to availability of stock, evidence of conversion of old gold ornamen....