TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 730
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....that the revenue has failed to establish the fact that the cash recovered from the respondent and others are sale proceeds of the smuggled gold and therefore the cash seized cannot be confiscated and no penalties are imposable. 2. The revenue has raised the following substantial questions of law for consideration:- (a) Whether the Learned Tribunal erred in law in not holding that the statements of the Respondent/Noticee No. 1 i.e. Rajendra Kumar Damani was voluntary, while giving credence to the Noticee's submission that they were retracted. The statements made by Respondent/Noticee No. 1 on 07.08.2018, 08.08.2018, and 25.07.2019 were all in his own handwriting and in his vernacular, which indicates that the statements were all voluntary ? (b) Whether the Learned Tribunal erred in law in not holding that the that the third statement, which is also in his own handwriting and in his vernacular, is after the gap of almost a year, in which he has reiterated his original statements. The attempted retraction was almost a year after the initial statement and the noticee had made no mention of any threat or coercion in the initial bail hearing, and hence has to be construed as an ....
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....signed by the respondent herein. When the respondent was questioned, he stated to have admitted that the entire cash is the sale proceeds of smuggled gold and silver. The DRI officers called upon the respondent to produce documents but they could not produce any document to show that the ceased articles were not of foreign origin. 5. In the simultaneous search conducted in the second premises, eleven number of yellow colour metallic bars believed to be gold of foreign origin concealed inside old and used newspapers and several bundles of huge amount of cash of Indian currency secreted in metallic vault fitted on the wall was found. The respondent is stated to have admitted that he is the owner of the shop and the other two persons were his employees and that the eleven yellow colour metallic bars believed to be gold of foreign origin were smuggled in nature and that he used to store those smuggled goods in the said metallic vaults at his shop for selling those to others and the recovered amount of Indian currency are the sale proceeds of such smuggled gold sworn by him on earlier occasions. Statement of the respondent was recorded under Section 108 of the Customs Act, 1962 (the Ac....
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....ferred to and it was stated that the burden of proving that the gold is not smuggled gold shall be on the person, who claims to be the owner of the goods so seized or from whom whose possession the goods are seized. In paragraph 27.1 of the show cause notice the role of the respondent has been set out. 9. The adjudicating authority namely The Additional Commissioner of Customs (Preventive) afforded an opportunity of personal hearing to all the noticees on 11.11.2019 including the respondent who has represented by the learned advocate in the hearing fixed on 24.01.2020. The reply given by the respondent was considered and by order dated 16.09.2020, the gold and silver were ordered to be absolutely confiscated as well as the order for absolute confiscation of the Indian currency which was seized, a sum of Rs. 70,00,000/- was imposed as penalty on the respondent. Aggrieved by such order, the respondent and the other noticees filed appeal before the Commissioner of Customs (Appeals) and by order dated 31.12.2021, the appeal filed by the respondent was dismissed. Challenging the said order, the respondent and others preferred appeal before the tribunal which was allowed and challenging....
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.... belief that goods are smuggled goods is to be judged from the Customs Officers experience and that sufficiency of material leading to formation of belief is not generally open to judicial review. However, the opinion of the customs officers cannot be wholly objective and the courts can examine the correctness and the circumstances leading to such belief. Therefore, it would be sufficient if the circumstances on the material before the officer, prima facie gives sufficient grounds to entertain the belief, one such factor being prior information. 14. Having noted the above legal position, we are required to examine as to what was the stand taken by the respondent and the two others co-noticees. As could be seen from the averments set out in the show cause notice, and the adjudication order, a slight inconsistency is noticed in what the respondent and other noticees have stated. In the statement recorded under Section 108 of the Act on 06.08.2018, from the respondent herein who was the first notice, he had stated as herein:- 9. Statement of Shri Rajendra Kumar Damani alias Raju Damani was recorded under Section 108 of the Customs Act, 1962 on 06.08.2018, wherein, he inter-alia stat....
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....ansaction did not have any legal documents. VI. He has an account in H.D.F.C Bank and Axis Bank of Bourbourn Road Branch. The total balance, at that time, in both the accounts, amounts to Rs. 6 lac approximately. He also stated that he did not have any other bank account either in his name or in the name of his company i.e. Rajendra Kumar Mahaswari. VII. On 06/08/2018, he reached his Office at 72 Manohar Das Street, Kolkata 700007, at around 11 AM in the morning. As usual, his three Parties namely, Maa Ambay Jewlers, Sankar and Aloke came and gave delivery of 4kgs, 2 kgs and 2 kgs of gold bars of 1 kgs, of foreign origin without any markings to him. With that he reached his shop/godown at 17 Pageyapatty, Kolkata - 700007. He already had 2.50 Kgs Gold in the Office. In the morning only Shri. Anil Agarwal of Banda had told him that to buy 4 kg gold for which Shri. Anil Agarwal of Banda had sent Rs. 1 Crore 8 lakh through his staff to shop/godown at 17 Pageyapatty, Kolkata - 700007 at around 12 noon. He had kept 8 kgs gold in his shop/godown at 17 Pageyapatty, Kolkata, took Rs. 35 Lakh with him and came back to his Office at 72 Manohar Das Street, Kolkata. Thereafter, Officers of ....
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....ters connected therewith, explained the role of the respondent in paragraphs 27.1 of the show cause notice which is as follows:- 27.1 Shri Rajendra Kumar Damani alias Raju Damani: From the statement dated 06.08.2018 and 07.08.2018 of Shri Rajendra Kumar Damani alias Raju Damani, recorded under Section 108 of the Customs Act, 1962, it could be seen that Shri Rajendra Kumar Damani used to do trading of the smuggled gold and silver of foreign origin by way of procuring them from different person at Sona patti, Kolkata. The very fact that he never did the trading of Gold and silver under cover of legal documents establishes that the Gold and silver which he used to trade are procured illegally. Shri Rajendra Kumar Damani, in his Statements, given under Sec. 108 of Customs Act, 1962, has categorically admitted that the 11 pieces of gold bars seized from his possession are smuggled gold of foreign origin which had been melted and were delivered to him without markings, as per his instructions. It is ostensible that the huge cash in India currency, recovered from the office and residential premises of Shri Rajendra Kumar Damani were the sale proceeds of the illegal gold. Shri Rajendra K....
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....ni, knowingly indulged himself in smuggling of gold for monetary benefit. Further, Shri Damani appears to have suppressed the name of actual supplier of the smuggled gold by naming some of the name of small businessman of Sonapatti, Kolkata with a mala-fide intention to hide the actual supplier of the smuggled gold from the clutch of law of the land. Thus it appears that Shri Rajendra Kumar Damani had been knowingly involved in the Illegal activity of smuggling gold and he in connivance with Shri Bhola Ray @ Bholi Ray and Shri Sanatan Behera alias Hari smuggled 11 pcs of gold weighing 10500.800 gms valued at Rs. 3,15,02,400/-, 9 pcs of gold coin, valued at Rs. 2,07,000/- and 509.100 grams of silver granules, valued at Rs. 19,448/-, in the instant case of seizure, along with seized Indian Currency Note of Rs. 1,74,76,500/-. It therefore appears that he is involved in carrying, removing, keeping and dealing with the said goods in any other manner which he knew were liable for confiscation under Section 111 (b),111 (d) & 121 of the Customs Act, 1962, and thus appears to be liable for penalty under Section 112 (a) and/or 112 (b) & 117 of the Customs Act, 1962. 16. In the reply to th....
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....nts could be produced by the respondent and the two other co-noticees in support of legally possessing the silver granules. With regard to the Indian currency notes which was seized the adjudicating authority holds that the respondent failed to produce any documents evidencing the source of the said cash and has referred to the admission in the statement recorded under Section 108 of the Act that they are the sale proceeds of the smuggled goods. In the background of these facts, the order of absolute confiscation and imposition of penalty was passed. 19. Before the appellate authority, the grounds raised by the respondent and other co-noticees before the adjudicating authority were reiterated in a more elaborate fashion and the decisions of the courts were referred to. The appellate authority considered the stand taken by the respondent and the other two co-noticees and found that the respondent and other co-noticees could not produce any document in support of importing/ possessing/ carrying/ otherwise dealing with the gold so recovered and seized from them and they had failed to discharge the burden of proof as required under Section 123 of the Act and accordingly affirmed the v....
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.... stating that the source of procurement of the said gold is made from old jewellery purchased in exchange of cash during the long period of time and due to the stock of gold was melted through the said old jewellery and converted into gold bars. The tribunal holds that this fact has not been verified by the revenue. After recording such a finding, the tribunal has referred to certain decisions and holds that he noticees have explained the source of procurement of gold which is not denied by the revenue and further having no mark on the gold and purity of the gold is not in conformity of the foreign gold, the benefit of doubt goes in favour of the noticees. 23. Further the tribunal holds that the statements recorded during the investigation was retracted by the respondent and other two co-noticees and they are not admissible in absence of corroborative evidence. After referring to certain decisions, the tribunal hold that the currency seized from the respondent and the other two co-noticees were not established by the revenue with corroborative evidence to show that the same are the sale proceeds of smuggled gold and then proceeds to refer to a certain decision and has recorded its....