TaxTMI 
TaxTMI 
2023 (7) TMI 1410
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....om the premises of Roopam Sarees, 3, Chetan Seth Street, Kolkata- 700007, under Section 111(b) and 111(d) of the Customs Act, 1962; (b) I order for confiscation of the seized wrapping and concealing materials i.e. shredded pieces of newspapers used for wrapping / concealing the gold bars, cut pieces of the gold bar having no commercial value under Section 119 of the Customs Act, 1962; (c) I order for confiscation of the seized Indian currency amounting to Rs. 20,16,100/- (Rupees Twenty lakh Sixteen thousand and one hundred) only under Section 121 of the Customs Act, 1962; (d) I impose penalty for Rs. 4,50,000/- (Rupees Four lakh fifty thousand) only upon Shri Anurag Jalan Under Section 112(b) & Section 114AA of the Customs Act, 1962; (e) I impose penalty for Rs. 25,000/- (Rupees Twenty five thousand ) only upon Shri Shreyash Agarwal under Section 112(b) of the Customs Act, 1962; (f) I impose penalty for Rs. 50,000/- (Rupees Fifty thousand) only upon Shri Dhan Kishore Agarwal Under Section 112(b) of the Customs Act, 1962; (g) I impose penalty for Rs. 25,000/- (Rupees Twenty five thousand) only upon Shri Shri Param Hans, under Sec....
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....an was found present in the said premises. On search the following goods were recovered. (i) 23 (twenty three) number of bags made of HDPE and cotton having foreign marking upon them containing Silver granules believed to be of foreign origin totally weighing 418.700 kgs. and valued at Rs.1,95,11,420/- (ii) 505 pieces of mixed white coloured silver coins collectively weighing 10.082 Kgs. Valued at Rs.4,20,668/- (iii) 20 pieces of gold coins believed to be made of gold of foreign origin collectively weighing 91.9 grams and valued at Rs.3,51,701/- (iv) Indian currency notes of denomination of Rs. 2000, Rs. 500, Rs. 200 & 100 totally amounted to Rs. 20,16,100/- 2.5 As Shri Anujrag Jalan failed to produce any licit document in support of legal possession, acquisition dealing with the goods as mentioned above. Accordingly, all those were seized under Section 110 of the Customs Act, 1962 on the reasons to believe that those were smuggled into India from Bangladesh in contravention of the provision of the Customs Act, 1962 and liable for confiscation under Section 111 of the Customs Act, 1962. Indian currency of Rs. 20,16,100/- (Rupees Twenty Lakhs S....
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....n his voluntary statement under Section 108 of Customs Act, 1962 has inter alia stated that on direction of his employer Shri Dhan Kishore Agarwal he kept the packets containing 4 pcs of gold hars and 5 pcs of cut pieces of gold bars totally weighing 6356.05 gm in his custody. The said gold was delivered to him by Baikunth Prasad, an employee of Shri Anurag Jalan; that against query Shri Anurag Jalan told him that he was facing some problem in keeping those gold with him for the time being but assured to take back the gold as early as possible; that he had not asked the Anurag Jalan about the source of the gold; that previously on two occasion in January, 2020 he kept some packets of gold in similar quantity in the same safe as per instructions of Dhan Kishore Agarwal; that those packets of gold were also sent by Shri Anurag Jalan through Baikunth Prasad; that however, on those two occasions Shri Anurag Jalan took back those packets of gold on the next day. 2.9 Shri Anurag Jalan in his voluntary statement under Section 108 of Customs Act, 1962 has inter alia admitted that he is the owner of the seized gold weighing 6.356 kgs and 4 kg seized from the premise of Roopm Saree and fr....
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....r Das Street, Sonapatty. Kolkata 700007: that in the said room at Manohar Das Street another employee of Shri Anurag jalan, Shri Dilip Singh also used to stay with him; that some persons used to come to the shop of Shri Anurag jalan and deliver gold biscuits; that Shri Dilip Singh used to get those gold biscuits melted from different melting workshops of Burrabazar to form gold bars that Shri Dilip Singh used to keep those gold bars in the almirah of room No. 405 of 61, Manohar das Street Sonapatty and deliver to other persons; that he also used to accompany Dilip Singh to the gold melting workshops sometimes; that after 10 January 2020. Anurag Jalan looked visibly worried and sent Dilip Singh to his native place, that after that Dilip Singh used to contact him from a new mobile number 8481927656 instead of his old mobile number 8017979210. 2.11 Shri Baikunth Prasad further submitted that after departure of Shri Dilip Singh, he was entrusted with the job of receiving smuggled gold biscuits from different persons, got those gold biscuits melted from different melting workshops to form gold bars and either keep those gold bars in the almirah of room No. 405, Manohar Das Street or ....
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....l as by email The summons sent by post was returned undelivered by the postal authority with remarks after much inquiry it was ascertained that the addressee left the place. However against summons sent through email a reply dated 03.09.2020 received from Shri Param Hans, Proprietor of Prithvi Gold. By the said letter it was intimated that Prithvi Gold is a broker only. He had purchased the gold from Kratika Jewellers and sold the same to Jalan Bullion & Jewellers. He only earned the brokerage amount which was the difference amount between sale and purchase price. 2.15 Under cover of his letter dated 08.09.2020. Shri param Hans also forwarded among others an unsigned Tax invoice purportedly of Kratika Jewellers. As per that unsigned invoice total 9520.800 gms gold bar were sold to Prithvi Gold on 14.01.2020 total value of which was shown as Rs. 3,82,94,086/- In the said invoice, there is also no mention of mode of payment. From the Ledger Account of Prithvi Gold, also submitted by Shri Param Hans, it is found that payment was stated to be made to Kartika Jewellers through bank on following different dates 05.02.2020- Rs. 10,00,000/- 06.02.2020- Rs. 9,50.000/- ....
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....- on 12.02.2020 through cheque. On further investigation, it was found that Smt Ranjana Tribrewal is the sister of Shri Anurag Jalan and she had other monetary transactions with Jalan Bullion & Jewellers as well. 2.18 In support of legal procurement of the silver coins, Shri Anurag Jalan submitted copies of journal voucher dated 17.01.2020 & 20.01.2020, bills dated 17.01.2020 of S K Coins Maker and two letters dated 15.01.2020 & 18.01.2020 of Jalan Bullion & Jewelers. It was claimed that total 10 kg Silver was supplied by Jalan Bullion & Jewellers to S K Coins Maker for manufacturing coins. The manufacturing charges were Rs. 600/- per kg and total Rs. 6000/- was paid by Jalan Bullion & Jewellers to S K Coins Maker. Interestingly nowhere in the bills of S K Coins Maker the number of Pcs of silver coins manufactured by them were mentioned, only total quantity of 10 kg were mentioned in their two bills. In this connection it is also to mentioned, only total quantity of 10 kg were mentioned in their two bills. In this connection it is also to mention that after examining the seized silver coins, govt. approved assayer Shri AB Kundu Jewellers declared that our of 505 pieces mixed whi....
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....stigation. But the Revenue has failed to adduce any positive, affirmative and tangible evidence to establish the charges that the goods were actually smuggled from Bangladesh and has proceeded on unwarranted assumptions and presumptions. 3.3 It is the submission that it is a settled law that the reasonable belief cannot be formed on mere pretense or suspicion. In this case, the Panchnama drawn by the DRI is a narration like a caged parrot wherein without there being any iota of evidence, the allegation has been raised on a mere suspect of alleged smuggling from Bangladesh. 3.4 He also submitted that there is no evidence to the contrary put up by the DRI and the entire gold bullion being of Indian origin along with the silver granules, which were cohesively covered by the proper document of title and the claim of the appellant cannot be faulted with and all along, it is the settled law that the benefit of presumption under Section 123 under the Customs Act, 1962 does not go in favour of the Revenue because there is the absence of formation of reasonable belief and above all a seizure and no foreign marking on the impugned gold nor any case of defacing or any interception at In....
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....scharging the burden of Section 123 of the Customs Act, 1962. To support this contention, he relied upon the decision of the Hon'ble Supreme Court in the case of Ramesh Kumar Baid, which was followed by the High Court of Allahabad in the case of Jaimata Ji Enterprises. 3.12 He further submitted that the term "smuggling" has not been defined under Customs Act and the said issue has been examined by the Hon'ble High Court of Delhi in the case of Shanti Lal Mehta Vs. Union of India & Others reported in 1983 (14) ELT 1715 (Del). 3.13 He further submitted that the statement of Shri Anurag Jalan taken into custody, does not have any evidentiary value in the absence of independent corroboration. To support his contention, he relied on the decision of the Hon'ble High Court of Bombay in the case of Union of India Vs. Kisan Ratan Singh reported in 2020 (372) ELT 714 (Bom.) and he also relied on the decision of the Hon'ble Supreme Court in the case of Vinod Solanki Vs. Union of India reported in 2009 (233) ELT 157 (SC) and also he relied on the decision of the Hon'ble High Court of Madras in the case of Chennai I Vs. Sainul Abideen Neelam reported in 2014 (300) ELT 342 (Mad.). He also ....
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.... circumstances, the order of the absolute confiscation of the gold in question and cash seized during investigation and the penalties imposed on the appellants, is to be sustained. 5. Heard both sides and considered the submissions. 6. After going through the arguments advanced by both sides and after going through the impugned order and after going through the reports placed before us, we find that the following issues have been raised under consideration : Issue No. (1) Whether in the absence of formation of reasonable belief, the presumption under Section 123 of Customs Act, 1962, goes in favour of the Revenue or not ? We find that in this case, it is alleged against the appellants on the basis of formation of reasonable belief that they were involved in smuggling of gold and silver from Bangladesh and therefore, search was conducted on the premises of the appellants, wherein certain gold bar/pieces were recovered and it was alleged that they believed to be a foreign origin and clearing being a notified items under Section 123 of Customs Act, 1962. Therefore, onus on the appellants to show that they have procured the said gold from licit means or not. 7. We hav....
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....t the goods were of foreign origin and smuggled into India from Bangladesh. 17. The Appellants also relied upon the following decisions in support of their argument that the 'reasonable belief' must be supported with other independent corroborative evidences. (i) In Assistant Collector of Customs v. Charan Das Malhotra, 1971 (1) SCC 697, Shelat J., has held reasonable believe to be relevant and not extraneous. (ii) In Kewal Krishan V. State of Punjab, AIR 1967 SC 737, Kapur J., while dealing with identical provisions had clarified that confiscatory power based on 'reason to believe' has to be exercised only on the satisfaction based on certain objective material. 18. The Appellants relied upon judgment of the Hon'ble Supreme Court in the case of Sita Ram Sao Vs State of Jharkhand reported in (2007) 12 SCC 630, wherein the Hon'ble Apex Court defined the word 'Corroboration' as under: "34. The word 'corroboration' means not mere evidence tending to confirm other evidence. In DPP Vs Hester (1972) 3 AIR ER 10.16, Lord Morris said: "The purpose of corroboration is not to give validity or credence to evidence which is deficient or suspec....
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....the Board on appeal. Only 7 items have been confiscated. These consist of 2 packets of diamonds and 5 ornaments. The petitioner claimed that they belonged to the queen mother of Nepal. A letter was written to queen mother. On her behalf a reply was received that she had given certain ornaments to the petitioner for polishing, remaking etc., though not for sale. But this was done later on. The letter was written on 3-7-1967. The reply was received on 24-7-1967. But at the time of seizure all that the officer had before him were 2 packets of diamonds and 5 ornaments. Neither the diamonds nor the ornaments had any foreign markings or label to suggest to the customs that these were smuggled goods. In the search list these two packets of diamonds are described as "appearing to be diamonds". This shows that the customs officer did not believe them to be diamonds on any reasonable ground. The ornaments had no foreign label or making. They were ordinary ornaments as are worn in this country. There was nothing peculiar about them. Nothing extraordinary. On this material could any reasonable man entertain a belief that these were smuggled goods 59. The belief must be such as any rea....
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....ms officer reasonably believe that the goods were smuggled. The petitioner knew better. 62. The customs officer merely thought that as the goods had not been accounted for these are smuggled goods. At the time of seizure what happened was this. The petitioner was present at the shop. He told the customs officer that they were duly entered in his account books but his accountant had gone to the income tax officer. The officer did not wait for the man to arrive to explain the entries to him. He seized the goods and took them away. This was not a case of reasonable belief. It was a case of suspicion. A case of speculation. A case of guess work. 63. As a result Section 123 did not apply to the case. There was no reasonable belief. No presumption could be raised under Section 123. There was no obligation on the petitioner to prove that the goods were not smuggled. The burden of proof was wrongly cast on him. The entire inquiry was vitiated." 20. From the above discussion, we observe that the 'reasonable belief' on which the DRI officers presumed that the gold bars/pieces were of smuggled nature is not supported by any corroborative evidence. There is no docume....
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....elief that they are smuggled goods . The burden of proving that they are not smuggled goods shall be on the person, who claims to be the owner of the goods so seized or from whose possession the goods are seized. The contention of the Department is that in the instant case, the onus of proving that the gold bars/pieces were not of smuggled in nature, lies on the Noticees from whose possession the impugned goods were seized. The Revenue contended that both Rajesh Kumar Yadav and Umanath did not produce any document for their lawful possession of the recovered gold bars/pieces at the time of seizure in Gaya Railway Station on 10/01/20. 22.3 The contention of the Appellants is that the gold bar/pieces were not of foreign origin. Section 123 of Customs Act is applicable only to foreign marked gold. Also the gold bars/pieces sized is not of 99.99 purity. Since, there is no foreign mark available on the gold bars/pieces seized from the Appellants, the provisions of section 123 is not applicable in this case. 22.4 The Appellants relied upon many decisions to support their case. In the case of Sanjeeb Kumar @ Pappu Kumar vs Jt CC, Lucknow, 2019 (369) ELT 1177 ( Tri-All), ....
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....iraj Pokhraj Jain (supra) wherein in Para 19 which is extracted below wherein the Hon'ble High Court observed as under - "19. The burden was, therefore, on the prosecution to prove that the goods were smuggled. For this the prosecution relied upon the evidence of Hebbar who stated that he believed the goods to be smuggled, because watches and watch straps were of foreign origin, the import of which was heavily restricted and prohibited and they were found in huge quantity. The foreign origin of the watches is tried to be shown from the foreign markings on the watches. The question whether the foreign markings of goods can be treated as admissible in evidence was considered by Naik J. in Criminal Appeal No. 3 of 1966, decided on 22nd December, 1966. Among the property involved in that case were some gold slabs. The slabs bore the marking "Johnson Mathey 9990 London". Naik J. observed in his judgment that the markings do not speak for themselves and that evidence would be hearsay evidence. There was nothing to indicate that the markings were really done by Johnson Mathey in London. No presumption can arise in regard to the markings, unless there is evidence to show that thos....
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....017) wrote a letter to Shri Vijay of Trissur to hand over gold to the bearer of the letter and both the letter and the gold were recovered from his son Shri Naga Venkata Raghavendra (Appellant in Appeal No. 30495 of 2017). Both the appellants had travelled by train from Trissur to Vijayawada. Naga Venkata Raghavendra was acting suspiciously when the Officers approached him. Subsequent statements were contradictory to each other. These factors by themselves cannot, in our considered opinion, constitute the basis for forming a reasonable belief that the seized gold was smuggled. Therefore, the Officers did not have a reasonable belief in the first place to assert that the seized primary gold was smuggled gold which is essential to shift the burden on to the accused under Section 123. The case of Om Prakash Khatri (supra) was different inasmuch as in that case while the foreign markings were missing on the gold in that case the carriers had admitted that they were carrying smuggled gold for Shri Khatri and that it was smuggled through Kerala and they were carrying it to Bombay and marks and numbers have been deleted to avoid being caught. They also admitted that they avoid air travel ....
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.... the gold in question is not sold by M/s Prithi Gold to the appellant. Moreover, the appellants have discharged their onus under Section 123 of the Customs Act, 1962 by producing invoices in support of their claim that they are the owners of the gold in question. In view of the above evidences and discussions, we hold that the appellant has discharged the onus that the source of procurement of gold. Therefore, Issue No.(2) is answered in favour of the appellants. Issue No. (3) Whether on the basis of retracted statements of the conoticees and the retractions thereof, can be relied upon to establish the guilty of the appellants when the procedure prescribed under Section 123 of the Customs Act, 1962, was not followed or not ? The Revenue has also relied upon the various statements recorded during the course of investigation. The statement of Shri Anurag Jalan was also recorded but the same has been relied upon by the Revenue to allege that the gold in question is smuggled one. 12. Further, we take note of the fact that the Revenue has relied upon the retracted statement of Shri Anurag Jalan, the said issue was also examined by of this Tribunal in the case of Shri Balwant....
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.... Customs (Prev.) West Bengal 2003 (160) ELT 816 (Tri-Kolkata). Non-appearance before DRI Officer in response to summons is not a ground for holding that the appellant is guilty-The entire case is based upon the statement of the Driver which is in the nature of uncorroborated statement of a co-accused and cannot be made the sole-basis for penalizing the appellant. v) Jahed Mondal Vs. Commissioner of Customs (Prev.), West Bengal-2002 (149) ELT 319 (Tri.-Kol.) Para 8 & 11.). Penalty has been imposed upon Shri Jahed Mondal based upon the statement of Bablu Biswas who was intercepted by the Customs Officer from whose possession one gold biscuit has been recovered. Penalty cannot be imposed on the basis of confession of co-accused unless corroborated by other evidences. Non- appearance in response to Summons cannot be a factor or criteria in determining the guilty conduct of the appellant. vi) Narayan Das Vs. Commissioner of Customs, Patna- 2004 (178) ELT 554 (Tri.-Kolkata) Para-6. Mere inculpatory statement of the co-acused about the purchase of gold from the appellant cannot be the basis of imposing penalty under Section 112(b) of the Custom....
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....andates that the evidence of the witness has to be recorded before the Adjudicating Authority, as in such an atmosphere, there would be no occasion for any trepidation on the part of the witness concerned." 27. The Appellants submits that the Adjudicating Authority, therefore, should follow the procedure to rely on the statement as relevant for proving the truth of the contents of the statement, to admit the statement in evidence. In this case, the said mandate has not been followed and hence the statement of the co-accused in this case cannot be said to be voluntary and his statement also cannot be said to be true and correct and shall not be taken as evidence. 28. The Appellants submits that after examination by the Adjudicating Authority the question of cross-examination would arise as has been held in Prakash Raghunath Autade- Vs. Union of India - 2022 (380) ELT 264 (Bom.). 29. The Appellants further relied upon the decision of the Tribunal in the case of S. Mohanalal reported in 1987 (29) ELT 63 (Tri-Madras) wherein the Tribunal held that "it will be unfair to fasten the appellant with penal consequences merely on the basis of a statement recorded fr....
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....t of the Order is reproduced below: Smuggling - Burden of proof - Retracted confessional statements of co-accused - No efforts made to prove that confessional statements were voluntary - Accused were not examined during adjudication - HELD : Confiscation and penalty order based only on retracted statements of accused persons were not sustainable - It was contrary to settled legal position, illegal, arbitrary and liable to be set aside - Sections 108, 111, 112 and 123 of Customs Act, 1962. [paras 22, 25, 26] Evidence - Confessional statement of co-accused - It is not substantive evidence against another co-accused - It can at best be used for assurance to Court - In absence of any substantive evidence, it was inappropriate to base conviction of accused on statements of co-accused - Section 108 of Customs Act, 1962. [para 25] 31.2 The Tribunal in the cases of Principal Commissioner of Customs (Prev.), Delhi Vs. Ahmed Mujjaba Khaleefa [2019 (366) ELT 337 (T) dismissed the appeal of Revenue holding that jewellery not bearing any foreign marking - other than statement of passenger no other proof produced by Revenue to substantiate the claim that jewellery were....