TaxTMI 
TaxTMI 
2025 (4) TMI 973
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.... facts of the case are that on 15.09.2019, Officers of the Headquarters P&I Branch, C.C. (P), West Bengal, Kolkata intercepted Shri Sanjay Kumar Agarwal, the Appellant No. 1, at Shalimar Railway Station. On examination, he was found to be in possession of seven (07) pieces of gold collectively weighing 474.250 grams of gold valued at Rs.18,01,676/-. As the Appellant No. 1 was not having any document for licit procurement of the said gold, the said gold was detained vide Detention Memo No. 03/September/2019-2020 dated 15.09.2019 and later, converted to seizure under Section 110 of the Customs Act, 1962 vide Seizure Case No. 22/IMP/CL/GOLD/P&I/CCP/WB/2019-20 dated 12.10.2019. The gold in question was seized under the belief that the said gold hold had been illegally imported into India without payment of appropriate Customs duties. 2.1. In his statement recorded under Section 108 of the Customs Act, 1962, the Appellant No. 1 inter alia stated that he works under Shri Sanjay Kumar Kotal of M/s. Kanishk Jewellers and Bullin Private Limited, 158/A, Bidhan Park, Netaji Colony, Kolkata - 700 090 (the Appellant No. 2 herein), on whose direction he was proceeding to M/s. Shyam Narayan Je....
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....ory List / Seizure Memo under Case No.: 22/IMP/CL/GOLD/ P&I/C.C.[P]/WB/2019-2020, Dated. 12.10.2019 by the S&D Unit, C.C.[P],W.B. as per instructions/procedure laid down in the Chapter- 11 of the department's Disposal Manual-2019." 4.1. On appeal, the Ld. Commissioner (Appeals), vide the impugned Order-in-Appeal dated 19.07.2023, upheld the confiscation of gold and imposition of penalties imposed vide the above mentioned Order-in-Original dated 30.03.2022. 5. Aggrieved by the impugned order, both the Appellants have filed appeals before the Tribunal. 5.1. As both the appeals emanate from the same Order-in-Appeal, both are taken up together for decision by a common order. 6. The contentions raised by both the Appellants in these appeals are summarized as under: - i) As per Section 110(1) of the Customs Act, 1962, Officers can seize the goods only when there is a 'reasonable belief' that the said goods have been smuggled into the country without payment of applicable duties of Customs. However, in the present case, the Officers have not exercised any 'reasonable belief' that the gold in question was smuggled in nature. There is no ....
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....T. 542 (Pat.), the scope and meaning of the term 'reasonable belief' has been explained, wherein it has been held that "reason to believe" not the subjective satisfaction of the officer concerned but to be exercised in accordance with restraints imposed by law and such belief must be that of an honest and reasonable person based upon reasonable grounds. Reasons should either appear on the face of the notice or must be available on the materials which had been placed before him. 6.1. Regarding applicability of Section 123 of Customs Act, 1962, in this case, the Appellants submit that the key element under section 123 of the Customs Act, 1962 is 'reasonable belief'; that the seizure so made in the present case is clearly without 'reasonable belief'. It is thus argued that when there is clear absence of reasonable belief, the initial burden in terms of Section 123 of the Customs Act, 1962 automatically shifts to the Department. 6.2. The Appellants have also submitted that the documentary evidence submitted them clearly indicate that the gold in question was indigenously procured. It is further submitted by the Appellants that the ld. adjudicating authorit....
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....ention Memo reproduced above, I observe that the term 'reasonable belief' for seizure of the gold bars is not figuring in it. Further, it is seen that the gold is of uneven shape and not of standard weight. There are no foreign markings available on the said gold pieces. 9.2. I find that Board, vide its Circular No. 01/2017 dated 08.02.2017, has instructed to pass a specific order depicting the reasonable belief of the officer concerned while seizing the goods. Therefore, deviation thereof, clearly depicts that the seizure so made is illegal and hence, the goods are liable to be released and in corollary thereof, confiscation under Section 111 of the Customs Act 1962 is not at all warranted. Thus, when preliminary seizure of goods is in dispute, the SCN proceedings become vitiated in nature thereby making the impugned order liable to be quashed. 9.3. I also observe that Section 123 of the Customs Act clearly stipulates that a 'reasonable belief' that the gold is of smuggled in nature is mandatory for invocation of the said provision; However, in the present case no reasonable belief has been formed by the officers that the gold is of smuggled in nature and hen....
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....he Department is that in the instant case gold bars were not of smuggled in nature, lies on the Appellant No. 1, Shri Sanjay Kumar Mallick from whose possession the impugned goods were seized. The Department contended that the Appellant did not produce any document for the licit procurement of the gold bars. 10.2. I observe that Section 123 of the Customs Act clearly stipulates that a 'reasonable belief' that the gold is of smuggled in nature is mandatory for invocation of the said provision. However, in the present case no reasonable belief has been formed by the officers that the gold is of smuggled in nature and hence, the provisions of Section 123 are not applicable in this case. The burden in the instant case lies on the Revenue to prove that seized gold is of smuggled in nature. However, I find that no evidence has been brought on record by the Revenue to substantiate their allegation that the gold is of foreign origin and smuggled in nature. 10.3. I also observe that the provisions of Section 123 are not applicable to indigenously procured gold. Hence, I find merit in the argument of the appellant that the onus is on the Department to prove that the gold is of ....
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.... Mathey in London. No presumption can arise in regard to the markings, unless there is evidence to show that those markings were made by a particular company in the ordinary course of business. A Division Bench of the Gujarat High Court has also taken a similar view in Asstt. Collector of Customs, Baroda v. M. Ibrahim Pirjada, 1970 Criminal Law Journal, 1305. There, the Gujarat High Court has held that mere markings cannot be taken as proof of the fact of foreign origin of the goods as such markings and labels would be hearsay evidence. With respect, I agree with the above view." Relying on the said decision, without evidence, the benefit of presumption under Section 123 of the Customs Act, 1962 is not available to the Revenue. Therefore, we hold that the gold in question is not restricted item but being smuggled one liable for confiscation and the same can be redeemed on payment of redemption fine. We also take note of the fact that the value of gold is Rs. 1,26,22,800/- and margin of profit in the trade of gold is very less, therefore, considering the value of gold and margin of profit, we hold that the redemption fine of Rs. 5 lakhs is appropriate in the facts and circu....
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....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 as there is a high risk of being caught. Coupled with these statements was the fact the gold of very high purity. The ratio of this judgment does not apply to the present case and the facts are quite different. 15. In view of the above, we find that the officers of the Department had no reasonable belief that the gold w....
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....8. I find that the above Test Memo / Report indicates that the gold in question is not of 99.9% purity, which is usually associated with foreign origin gold. Also, the gold in question are not of standard weight. Further, I also take note of the fact that the Revenue has not brought in any evidence to prove that the gold was smuggled into India. 10.9. In view of the above discussions and the decisions cited above, I hold that the burden under Section 123 of Customs Act, to prove that the gold is not smuggled in nature, does not lie on the Appellants, in this case. The onus is on the Departmental officers that the gold is of smuggled in nature. However, I observe that the officers of the Department could not establish that the gold is of smuggled in nature. 10.10. I find that the Appellants have produced evidence in support of legal procurement of the gold, vide Invoice No. KJ/WB/19-20/1042 dated 31.05.2019 by which 700 grams of gold was purchased by the Appellant No. 2 (M/s. Kanishk Jewellers and Bullion Pvt. Ltd.) from M/s. Kartikey Jewellers Pvt. Ltd. It has been stated that out of this, 474.250 grams of gold was given to the Appellant No. 1 for the purpose of delivering th....
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....he ld. adjudicating authority has held that the goods are liable for confiscation vide the Order-in-Original dated 30.03.2022. Considering the documentary evidence submitted by the appellants, I do not find any reason to reject the evidence of legal procurement of the gold produced by the Appellants. Consequently, I hold that the provisions of Section 123 of the Customs Act, 1962 are not applicable to this case. 10.13. As the Appellants have submitted enough evidence for legal purchase of the gold domestically, I hold that the confiscation of the gold under Section 111 of the Customs Act, 1962 is not sustainable and hence, I set aside the same. 11. Regarding the penalties imposed on the Appellants, I find that the ld. adjudicating authority has imposed the penalties under Section 112 of the Customs Act, 1962. As the gold is not liable for confiscation, there is no offence committed by the Appellants warranting imposition of penalty under Section 112 ibid. Accordingly, the penalties imposed on the Appellants under Section 112 of the Customs Act are set aside. 12. In the result, I set aside the impugned order and allow the appeals filed by the Appellants. ( Order pronounc....
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....OTAL (Rupees Eighteen 474.250 13.380 460.870 Details of Yellow Metals believed to be gold recovered from Sri SANJAY KUMAR MALLICK goods: - As stated below :- 1(One) cut pieces of yellow metal believed to be gold having inscription 995.0 1(One) very small Cut piece Yellow Metal believed to be gold having inscription S.B.R.T Brown Adhesive Tape used for wrapping the yellow metals believed to be gold TOTAL (Rupees Eighteen Total value of detained gold (99.5 karat) Rs. 18,01,676/- (Rupees Eighteen lakh one thousand six hundred seventy six) only as per value @ Rs. 3799/-per gram as on 15.09.2019 Reason for detention: Shri Sanjay Kumar Mallick is not able to submit/produce any licit documents. He stated that he is not the actual owner of the above-mentioned gold, he is a carrier, works for his employer Shri Sanjay Kumar Kotal, Kolkata. DATED SIGNATURE OF THE WITNESSES: [1] SASDUINTAM 1519619 8/9/19 [2]. Radhakanta Muity 15/09/19 [ S.O./Inspector of CustomsAR P&I Branch, C.CAPMB Kolkatams Inspector of Custo IQ. P & I Branch, CC (P), V ... DATED SIGNATURE OF THE OWNER/CUSTODIAN/AUTHORISED PERSON Malay Hajuwelup Received the copy of ....