TaxTMI 
TaxTMI 
2025 (5) TMI 1035
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....13 scheduled to start from Howrah at 6.05 a.m. 2. On the basis of the said intelligence, officers of DRI Kolkata Zonal Unit identified the passenger Shri. Atu Dutta sitting on seat no. 74 of Coach No. C-4. of the said train. On enquiry, the said person accepted that he is carrying substantial quantity of gold bar/biscuits of foreign origin smuggled into India and articles made out of gold biscuits of foreign origin concealed in his black coloured laptop bag and in his person. 2.1. On personal search of Shri Atu Dutta in the presence of two witnesses, the officers found 26 pieces of yellow coloured metal in small biscuits concealed in his white coloured cotton waist belt was recovered. On search of the black coloured laptop bag, in the presence of the two independent witnesses, the officers found gold ornaments collectively weighing 3072 gms. and one yellow coloured metal bar believed to be Gold bar of foreign origin bearing foreign inscriptions as 'Valcambi Suisse, 1 Kg., gold 995.0' in it. As he was not having any licit document in support of legal importation/possession/transportation of such gold biscuits of foreign origin and gold ornaments made from foreign origi....
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....le No. 98306 90514). Then two other staff members of 'Mejda' (whose identities/ addresses and contact numbers were not known to him) handed over to him 26 pcs of gold biscuits of foreign origin believed to have been smuggled from Bangladesh and contained in a plastic packet. The transaction was made in the presence of said 'Mejda' (Pran Gopal Saha). Then, one Shri Agarwal (full name, address and phone number are not known to him) came and handed over to him one Pc. Gold bar weighing 1 Kg. having foreign inscription on the same. 2.4. On 27^th December, 2013, carrying all the above said gold biscuits and ornaments, he came to Howrah station at about 05.30 a.m. He was having reservation at Seat no. 74, Coach No. C-4 of Shatabdi Express (Train No. 12019 of 27.12.2013 scheduled to start at 6.05 a.m. At about 05.45 a.m, the DRI officers intercepted him and asked him to produce documents in support of his possession of gold ornaments and foreign origin gold biscuits which he was admittedly carrying. He had no such documents in support of possession of gold ornaments and foreign origin gold biscuits. Since the place was a crowded public place he requested the officers to....
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....Rajkot He did not purchase any gold biscuits of foreign origin. Payments were made through RTGS from his account number 910020010008520 maintained at Axis Bank, Dhanbad. The purchased gold bars were usually collected by his staff named Atu Dutta. He further stated that Shri Atu Dutta had gone to Kolkata on 25.12.2013 and he had told him to bring manufactured ornaments from his karigars at Kolkata. Shri. Naresh Agarwal categorically stated that he has not asked Atu Dutta to collect any gold biscuits/bars from the owner of M/s N P Jewellers. 2.8. The purity of the seized gold and gold ornaments were certified by M/s G. N. Hallmarking & Refinery Pvt. Ltd., 6, Banstolla Galli, Kolkata-700007 on 27.12.2013 at DRI Kolkata Office and the purity of the gold bar was confirmed as 99.5% where as that of gold biscuits were confirmed as 99.9% and that of gold ornaments were confirmed as 91.66%. 2.9. Search was conducted on 28.12.2013 at the office premises under the control of M/s N. P. Jewellers Pvt. Ltd. at 6th Floor, Om Tower, P.16, Kalakar Street, Kolkata-07. Indian Currency worth Rs. 1,88,00,800/- was recovered and seized on the reasonable belief that the same was the sale proceed....
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..... The statement of Shri Praveen Jalan of M/s Jalan Jewellers, 9, Shambhu Mullick Lane, Kolkata, was recorded on 23.01.2014, wherein he has stated that sale bill bearing no. JJ/2056/2013-14 dated 24.12.2013 was issued at the name of Jewel Jyoti Ornaments Pvt. Ltd., UG-7, Sri Ram Plaza, Bank More, Dhanabad-826001 from 72, Manohar Das Street, Kolkata by his accountant Shri Anand Sharma, whose office was at 5, Grant Lane, Lalbazar, Kolkata. The goods, as shown in the said bill was given by one of his staff named Arun Sharma under his supervision to the staff of M/s Jewel Jyoti Ornaments Pvt. Ltd. named Bikash Malakar at 43, Hariram Goyanaka Street, Burra Bazar, Kolkata (BanstalaNimbari) [on 24.12.2013]. The gold sold by him to M/s Jewel Jyoti Ornaments Pvt. Ltd. was in brick shape having weight 1 kg. The markings of company, purity and numbering were embossed on that sold gold bar. The gold bar sold on 24.12.2013 to M/s Jewel Jyoti Ornaments Pvt. Ltd. was purchased from Maa Ambe Jewellers, 47 A, Nalini Seth Road, 2nd Floor, Sonapatti, Kolkata-07 on 12.12.2013. The said gold was sold to M/s Jewel Jyoti Ornaments Pvt. Ltd on credit of 2 to 3 days. This was the first transaction. No agree....
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....6 ordered for absolute confiscation of the seized gold and jewellery in terms of Section 111 (b), (d), (f) and (o) of the Customs Act, 1962 and also ordered for confiscation of Rs. 1,88,00,800/- in terms of Section 121 of the Act. Penalty to the tune of Rs. 50,00,000/- was imposed upon Shri Atu Dutta and Shri Pran Gopal Saha (each) under Section 112 of the Customs Act, 1962. Penalty of Rs. 1,00,00,000/- was imposed upon Shri Naresh Agrawal under Section 112 of the Act. Being aggrieved and dissatisfied with the impugned Order-in-Original dated13.07.2016, the above said appeals have been filed before this Tribunal. 4. The appellants submit that in the present case, the goods so seized have been collectively claimed by Shri Naresh Agarwal under proper documents except for the seized cash; Shri Naresh Agarwal specifically states that he has no connection with the seized cash whatsoever and the same remains unclaimed by him. The appellants further states that as far as the 'reasonable belief' of the officer is concerned, the same has not been formed while executing the seizure in terms of Section 110 of the Customs Act, 1962 and the same is evident from the Seizure List itsel....
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....ts that though the term "reasonable belief" has been quoted in the Panchnama, the same remains absent from the Seizure List in the present case. It is submitted that the Circular No. 01/2017-Cus dated 08.02.2017 clearly states that whenever goods are being seized, in addition to Panchnama, the proper officer must also pass an appropriate order (Seizure memo)/Orders/etc. clearly mentioning the reasons to believe that the goods are liable for confiscation; However, in this particular case, no such reasonable belief has been formed while seizing the goods and as such, the said seizure becomes vitiated in nature; Moreso there is a clear violation of the Circular in the present case and that the provisions as laid down has not been adhered by the seizing officers. Accordingly, the appellants submit that the confiscation of the seized goods in this case is not sustainable as the seizure has not passed the test of 'reasonable belief'. 5. Regarding applicability of Section 123 of Customs Act, 1962, in this case, the appellants submit that the key element under section 123 of the Act is 'reasonable belief'; the seizure so made in the present case is clearly without 'r....
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....reof. In support of this contention, the appellants relied on the decision in the case of Commissioner of Customs (Prev.), Shillong versus Sri Sangpuia, reported in 2005(189) E.L.T.321 (Tri. - Kolkata). The appellants submit that the Department, on presumption and assumption basis, absolutely confiscated the gold without any concrete evidence and held that the gold is of foreign origin and that it has been illegally imported into India as such the confiscation of seized goods is absolutely bad in the eyes of law. In support of this contention, the appellants relied on the decision in the case of Commissioner of Customs (prev.), Shillong versus Manisha Devi Jain reported in 2019(370) E.L.T.401 (Tri. - Kolkata). 8. The appellants submit that the onus of importation is no way lies upon the appellant as he is simply a purchaser who had licitly purchased the seized gold from the respective sellers and his onus has been discharged in the very moment he produced documents related to the subject gold which hasn't been negated; the fact that the invoices were cross verified by the investigating authority with the respective sellers who had raised them strongly establishes the fact th....
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....ties imposed on them are legally not tenable and prayed for setting aside the same. 12. On the other hand, The Ld. Authorized Representative of the Revenue submits that the appellant, namely, Shri Atu Dutta was not having any document for the licit purchase of the gold biscuits and gold ornaments found in his possession on 27.12.2013 when he was intercepted at Shatabdhi Express at Howrah station; Later, during the course of investigation also, the appellants have failed to produce any documentary evidence for the licit purchase of the gold biscuits and gold jewellery. He stated that under Section 123 of the Customs Act, 1962, it is the responsibility of the person who claims ownership of the gold to prove that the same were not smuggled; In this case neither Shri Atu Dutta who was in possession of the gold nor Shri Naresh Agarwalla who later claimed the ownership of the 26 pieces of gold, could produce any evidence for the licit procurement of the gold in question. Accordingly, he submits that the ld. adjudicating authority has rightly confiscated the gold biscuits and gold ornaments in question. 12.1. Regarding the Indian Currency seized, he submits that Shri Pran Gopal Saha....
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.... believe' that the gold biscuits/ bars were smuggled in nature and the gold ornaments were made from smuggled gold?" 15. The appellants submitted that the Department has not brought in any evidence to prove that the gold in question were smuggled into India. They have drawn our attention to Section 110 of the Customs Act, 1962, wherein in has been stated that the Officers can seize the gold only on the "reasonable belief" that the gold is smuggled in nature. It has also been contended that in the present case, there was no reasonable belief on the part of the Officers concerned while seizing the goods. The appellants have also cited the Board Circular No. 01/2007 dated 08.02.2007 wherein it has been instructed that a specific order regarding reasonable belief is to be passed by the Officers while seizing the goods; there is no such exercise undertaken by the Officers, as is evidenced from the Seizure Memo; therefore, it is contended that the seizure in question itself is illegal. 15.1. We have perused the Panchnama and the Seizure Memo available on record. On perusal of the Pachnama, we find that the Officers have initiated action on the basis of a specific intelligence t....
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.... (b) in any other case, on the person, if any, who claims to be the owner of the goods so seized. Sub Section (2) states that Section 123 shall apply to gold and manufacturers thereof, watches and any other class of goods which the Central Government may by notification in the official Gazette specifies. 11. What is important to note is that Section 123 enacts that where any goods to which the Section applies, are seized under the Act in the reasonable believe that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized, the burden thus shifts under the conditions specified in the Section and the conditions being the seizure of goods to which the section applies, seizure under the Act (Customs Act) and seizure in the reasonable believe that they are smuggled goods. When these three elements are proved, the burden would shift to the accused to show that they are not smuggled goods. 12. It has been held that the section does not compel the officers to give reasons and the non-mention of reasons does not vitiate the authorization, even though it was always proper for t....
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...., he came from Delhi via Rajdhani Express and came to the restroom situated at Nimbari, Banshtala, Barrabazaar, Kolkata and during that period, four persons came to his room separately and individually for handing over gold biscuits / bars / ornaments. 16.1.1. Shri Sunil Dinda (address/phone number not known to him) came to that room first at round 3:00 p.m. and handed over to him Long Chains (33 pieces) weighing 610 gms. 16.1.2. Lalmohon (full name/address/phone number not known to him) came to that room and handed over to him 3 pieces of Ball chain (motor mala) weighing 60 gms. 16.1.3. Shailen (full name/address/phone number not known to him) and handed over to him 89 gold chains weighing 848 gms. 16.1.4. Shri Utpal Samanta (full address not known to him) came to that room to see him and handed over to him 36 pieces gold chains and 93 pieces Ear-rings (Bali) made of gold weighing 754 gms. 16.2. Thus, we observe that the said gold ornaments have been handed over to the appellant viz. Shri Atu Dutta by four different persons. 16.2.1. In his statement dated 27.12.2013 recorded at Dhanbad, Shri Naresh Agarwalla, Director of M/s. Jewel Jyoti Ornaments Pvt. Ltd, Dhanb....
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....stated that he has not asked Atu Dutta to collect any gold biscuits/bars from the owner of M/s N P Jewellers. It was also stated that the purity of the seized gold and gold ornaments were certified by M/s G. N. Hallmarking & Refinery Pvt. Ltd., 6, Banstolla Galli, Kolkata-700007 on 27.12.2013 at DRI Kolkata Office and the purity of the gold bar was confirmed as 99.5% where as that of gold biscuits were confirmed as 99.9% and that of gold ornaments were confirmed as 91.66%.. He inter alia stated that he has asked Shri Atu Dutta to collect the gold ornaments from one of the karigars by name Shri Utpal Samanta who was living at Sinthee Area of Dum Dum, Kolkata. In view of the above, the appellant, Shri Naresh Agarwalla stated that the said gold ornaments were purchased domestically. It is observed that he has produced evidence in the form of invoices and purchase bills evidencing the legal purchase of these gold ornaments. Accordingly, it has been contended that they have discharged their burden under Section 123 of the Customs Act and the confiscation of the gold ornaments is bad in law. 16.2.4. We find that on the day of interception, Shri Atu Dutta had categorically stated in hi....
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....bmitted evidence regarding the legal procurement of the 1 kg. gold bar while there is no evidence brought on record by the Department to substantiate their allegation that the said gold bar had been smuggled into India. It is also seen that they have produced documentary evidence on 17.01.2014 before the court of the Ld. CMM, during production of Shri Atu Dutta, regarding 995 purity locally acquired gold bar weighing 1 Kg. and having the marking Valcambi Suisse, as having been purchased from M/s. Jalan Jewellers, Sonapatty, Kolkata against tax Invoice No. JJ/2056/2013-14 dated 24.12.2013. 16.3.2. Thus, as the appellants have discharged their burden of proof cast upon them regarding licit purchase of the gold as required under Section 123 of the Customs Act, we hold that the 1 kg. gold bar is not liable for confiscation. (iii) Seizure of 26 pieces of gold biscuits: 16.4. In respect of the 26 pieces of gold biscuits seized, we observe that as per the statement of Shri Atu Dutta recorded on 26.12.2013, 'Mejda' (Shri Pran Gopal Saha) hadhanded over the said gold to Shri Atu Dutta on 26.12.2013. He has stated that this gold belonged to Shri Naresh Agarwalla of Dhanbad and Shri ....
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....currency was seized from the Office of Shri Pran Gopal Saha on 28.12.2013. Shri Pran Gopal Saha has been alleged to be one of the beneficiaries of the earnings accumulated from the smuggling of gold into India by the appellants and thus, the Department alleges that the Indian Currency in question are the sale proceeds of the said smuggled gold. 17.1. We find that with regard to the Indian Currency seized from Shri Pran Gopal Saha (one of the appellants herein), it has been submitted by the appellant that the money, which was recovered from his vault, was given to him by Shri Naresh Agarwalla and the money recovered from the vault of "Godrej" make installed in his office cum store room on the 6th Floor of his shop at P-16, Kalakar Street, Om Towers, Kolkata-07 (Shri Pran Gopal Saha's premises) is actually belonging to Shri Naresh Agarwalla. He has stated that Shri Naresh Agarwal used to send him money in advance through his employee to his office, which he used to keep at his Vault at the 6th Floor of his office.We also find that Shri Naresh Agarwalla has submitted evidence to claim the ownership of the currency in question. We find that there is no evidence available on record t....
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....he date of communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent. of the penalty so determined; (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value thereof, to a penalty not exceeding the difference between the declared value and the value thereof or five thousand rupees, whichever is the greater; (iv) in the case of goods falling both under clauses (i) and (iii), to a penalty [not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest; (v) in the case of goods falling both under clauses (ii) and (iii), to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest. 18.1. The essential ingredients for invok....
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....om his possession. The said currency was considered as sale proceeds of the smuggled gold. However, it has been proved that there is no evidence available to establish that the Indian currency in question was the sale proceeds of the seized gold and hence, it has been held that the said Indian currency is not liable for confiscation. In these circumstances, we hold that no penalty is imposable on Shri Pran Gopal Saha and accordingly, the penalty imposed on him is set aside. 18.5. Coming to the penalty imposed on Shri Naresh Kumar Agarwalla, we observe that he had claimed ownership of the 26 pieces of gold biscuits. However, he could not produce any documents evidencing ownership of the same and therefore, his claim of ownership of the said gold was not considered. Further, admittedly, Shri Atu Dutta, the person from whose possession the said gold had been seized, stated Shri Naresh Kumar Agarwalla to be the owner of the said 26 pieces of gold biscuits. It is also observed by us that the 26 pieces of gold biscuits are bearing a foreign marking and hence, as per Section 123 of the Customs Act, the onus is on the person who claims ownership of the said gold. Therefore, considering ....
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....t 05.45 Hrs. on 27.12.2013 3. Place, time and date of seizure: Office of the Directorate of Revenue Intelligence, Kolkata Zonal Unit, 8, Ho-Chi-Minh Sarani, Harrington Mansion, Kolkata - 700 071, at 10.30 hrs. on 27.12.2013. 4. Name of the seizing officer: Shri Biranchi Narayan Mallick, Intelligence Officer, Directorate of Revenue Intelligence, Kolkata Zonal Unit., Kolkata. Seizure Case No: 138/Kol/2013(P) dated 27.12.2013. SI. No. Description of goods Quantity Estimated Value (in Rs.) Remarks 1. Rectangular shaped yellow colored metal bars believed to be gold in' biscuit form, having certain inscription i.c. "ARGOR,HERAEUSSA, Switzerland, 10 TOLAS, *MELTER*, ASSAYER, 999.0"- 13 Pcs., and "CREDIT SUISSE, 10 TOLAS, 999.0, ESSAYEUR, FONDEUR" - 13 Pcs., embossed as per Facsimile taken in 26 pcs having total weight 3.032 Kgs. (approx.), as in the detailed inventory, vide Annexure- B. |89,82,000/- Total 26 pcs. having total weight 3.032 Kgs (Approx.) of rectangular shaped yellow colored metal bars believed to be gold of foreign origin in biscuit form were found wrapped with brown coloured adhesive tapes concealed in a white coloured cloth belt with pocket and tied on wai....
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....as then kept in a black coloured hand bag of POLO STAR brand carried by Sri Atu Dutta. Total 92 - pcs. of yellow colored metal chains of assorted length and thickness having total weight 0.908 Kg (Approx.), believed to be gold were kept in transparent plastic pouch wrapped with white & purple coloured paper and old Bengali News paper and then kept in a black coloured plastic packet having white star prints, which was then kept in a black coloured hand bag of POLO STAR brand carried by Sri Atu Dutta. Pancha 1: Andligni @Dels 27/2/13 Baltic 27.12.13 Signature of Seizing Officers அணி INTELLIGENCE 9PIE Pancha 2: 1. 22/12/13 Directorate el Fie. . .. 1 nie Document 3 (1 3 Yellow Chain strips of assorted length and thickness- believed to be made of gold. colored metal weight 0.800 Kg. (approx.), as in the detailed inventory vide Annexure- B. |6 pcs. having total |21,74,040/- Total 6 pcs. of yellow colored metal chain strips of assorted length and thickness having total weight 0.800 Kg (Approx.), believed to be made of gold, wrapped with old Bengali News paper and then kept in a black coloured plastic packet having white star prints, ....