TaxTMI 
TaxTMI 
2025 (5) TMI 2109
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....te Commissioner allowed the appeal filed by the Respondent against Order-in-Original No.65168 of 2018 dated 10.09.2018 passed by the Additional Commissioner of Customs, (Chennai-III) Commissionerate, Chennai. 3. The Respondent had earlier suffered an adverse order in Order- in-Original No.65168 of 2018 dated 10.09.2018 from the File No.OS.No.08/2017-PAU/DRI/CZU/VIII/48/ENQ-1/INT-01/2017 in the hands of the Additional Commissioner of Customs, (Chennai-III) Commissionerate, Chennai. 4. By the aforesaid Order-in-Original No.65168 of 2018 dated 10.09.2018, the Additional Commissioner of Customs, (Chennai-III) Commissionerate, had passed the following Order:- i. I confiscate the seized 3.097 kg of foreign origin gold bars, totally valued at Rs. 91,98,090/- under Section 111(a), 111(d) and 111(i) of the Customs Act, 1962. ii. I confiscate the packing materials with no commercial value used for concealing the smuggled gold bars under Section 119 of the Customs Act, 1962. iii. I impose penalty of Rs. 5,00,000/- (Rupees Five Lakhs Only) on Shri Mohammed Ali Jinnah under Section 112 of the Customs Act, 1962. iv. I impose a penalty of Rs. 10,00,000/- (Rupees Ten Lakhs Only) on Shri ....
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....40, 4 Bus Tickets viz., Ticket No.047841, Ticket No.29737, Ticket No.85449 and Ticket No.084311 and Ticket No.80372 for Trichy to Chennai. 12. The Officers found two packets of gold bars wrapped with blue adhesive tape which were kept in green and blue polythene bags and on cutting the two packets after removal of the blue adhesive tapes from the two packets, it was found wrapped in black tape, brown adhesive tape and thin white paper. The packet contained 2 crude gold bars weighing about 3097 grams (1720 grams + 1377 grams) and was valued a total sum of Rs. 91,98,090/- at Rs. 2,970/- per gram. 13. The seized gold bars appeared to have been concealed and smuggled into India from Srilanka without declaring with the Customs Department with an intention to avoid payment of appropriate customs duties and therefore were liable for confiscation under the provisions of the Customs Act, 1962 and therefore, a mahazar was drawn on 23.01.2017. 14. In a voluntary statement dated 23.01.2017, the Respondent also stated that one person named Murugan aged about 55 years from Pudhupattinam in Ramanathapuram District had approached him on 22.01.2017 for carrying the smuggled gold from Srilanka fo....
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....ank (IOB), Devakottai and that had earlier worked in Malaysia and Saudi Arabia and submitted a copy of the passport. However, the Respondent admitted that he neither had a PAN Card nor was an Income Tax Assessee. 20. The Respondent was thus summoned on 10.04.2017 for personal appearance on 17.04.2017 to which the Respondent replied that he was not well and would later appear. Letters were also received from Shahul Hameed, Ayesha Beevi and Nashrina Begum, the father, the mother and the wife of the Respondent, who claimed that the seized gold bars were not smuggled gold bars but were purchased in India only from the Respondent earnings. 21. However, on verification from the Bank Statement of the Respondent, it was noticed that the Respondent only had a meagre bank balance of Rs. 415/- and mostly cash deposits and withdrawals were made only during the period before the seizure of the gold. 22. The Additional Chief Metropolitan Magistrate (E.O.I), Egmore, Chennai vide Order dated 31.08.2017 in Crl.M.P.No.1818 of 2017 confirmed that the seized crude gold bars did not have any foreign markings. Necessary certificate was issued by the Magistrate to that effect under Section 110 (1B) an....
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....er-in-Original No.65168 of 2018 dated 10.09.2018 that was passed by the Additional Commissioner of Customs, Chennai-III Commissionerate was rightly interfered and set aside by the Appellate Commissioner vide Order-in- Appeal Seaport C.Cus.II No.550 of 2019 dated 14.11.2019 which decision was affirmed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) vide Impugned Order. 27. Learned Senior Counsel for the Respondent further submits that at the time when the mahazar statement was recorded, telephone numbers of the said Murugan and Batcha alias Pitchai were recorded. However, no statements were obtained from the said Murugan and Batcha alias Pitchai. 28. It is submitted by Learned Senior Counsel for the Respondent that the seized gold bars were assayed i.e., valued by appropriate gold assayer on 24.01.2017 who certified that the 2 gold bars were of 24 Carat of the purity (99.9%) of 999.9 fineness and that the value of the crude gold bar weighing about 3097 grams worked out to Rs. 91,98,090/-. It is however submitted that the Certificate of assayer was not furnished to the Respondent at the time of mahazar proceedings on 23.01.2017 or thereafter. 29. That apart, it ....
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....o also on going through the entire materials placed before him, has set aside the confiscation of goods (gold) and also penalties imposed by the adjudicating authority. Therefore, it is contended that both the authorities below have rightly adjudicated the matter and passed well-considered orders which require no interference. 32. It is submitted by the learned Senior Counsel for the Respondent that the observation of the Additional Chief Metropolitan Magistrate (E.O.I), Egmore, Chennai vide Order dated 31.08.2017 in Crl.M.P.No.1818 of 2017 that the seized crude gold bars did not have any foreign markings which ought to have been considered by the Additional Commissioner of Customs, Chennai-III Commissionerate while ordering absolute confiscation of the gold bars seized from the respondent weighing about 3097 grams under Section 111(a), (d) and (i) of the Customs Act, 1962 while passing Order-in-Original No.65168 of 2018 dated 10.09.2018. 33. Learned Senior Counsel for the Respondent pointed that the Appellant had failed to prove that the seized gold was of foreign origin. Further, it is the case of the Appellant that the gold was seized from the Respondent at a public place i.e.....
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....g the Directorate of Revenue Intelligence (DRI) depend on tip-off from wide network of informants they have developed. The Officers from the Directorate of Revenue Intelligence (DRI) admittedly seized the gold bars from the custody of the Respondent at the Pallavaram Bus Stand, Chennai on 23.01.2017. The Respondent has not denied that the gold bars were seized from his custody. 42. But, for the intelligence gathered by the Officers from the Directorate of Revenue Intelligence (DRI) from their sources, they would not have got information regarding transportation of gold bars in person with the Respondent. 43. Based on the aforesaid information gathered, the Officers from the Directorate of Revenue Intelligence (DRI) intercepted the Respondent at Pallavaram Bus Stand, Chennai at about 6.30 p.m. in the evening on 23.01.2017 in presence of two independent witnesses and seized 2 crude gold bars weighing 3.097 Kg valued at Rs. 91,98,090/- from the custody of the Respondent. 44. Statement was also recorded from the Respondent on the date of seizure on 23.01.2017. The statement confirms that the seized gold bars weighed about 3.097 Kg. In the statement, the Respondent has stated that th....
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....d back to Devakottai via Thondi, from where he proceeded to Pudukottai and thereafter to Chennai via Trichy. 52. The Respondent had not stated that he visited his house in Devakottai, Sivagangai District on 22.01.2017 enroute to Chennai via Pudukottai, Trichy after returning from Kottaipattinam Dhargha. The uniform and consistent statement of the Respondent from the date of retraction and the letters of the father, namely Shahul Hameed, the mother, namely Ayesha Beevi and the wife, namely Nashrina Begum of the Respondent are similar though with contradictions. 53. However, the facts remains that the Respondent's wife in her statement dated 14.07.2017, has introduced the name of Kannan Aachari of East Street, Nambudhalai who allegedly melted the jewellery and gold coins purchased by her out of savings and chits into gold bars. 54. The Respondent's wife stated that the gold bars were melted way back in 2015 after she handed over the jewellery to her uncle named Umar Katha for melting who later handed over the gold bar after a month to her. 55. In the same statement, the Respondent's wife has also stated that the Respondent was earlier employed in Malaysia and used to ....
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....reet, Nambudhalai has clearly stated that the Respondent's wife's uncle namely the said Umar Katha used to sometimes place orders for small jewellery and that barring the same, there were no other transactions and that the Respondent and his family members have merely used his name deliberately to extricate themselves from the problems they were facing under the Customs Act, 1962. 62. In his statement dated 17.07.2017, the Respondent has however tried to downplay the statement given by his wife on 14.07.2017 by stating that the Respondent's wife's uncle Umar Katha was acquainted with another Aachari namely Kannan Aachari of Thondi, Ramanathapuram District when the Respondent was employed in abroad, the said Kannan Aachari was known the Respondent's wife's uncle namely Umar Katha. 63. The Respondent has further contradicted by stating that he used to hand over the gold coins to the said Kannan Aachari and this was done as a matter of routine. However, the Respondent has stated that the Respondent's wife's uncle namely Umar Katha was unaware of the habit of the Respondent in melting gold coins given by the Respondent to the said Kannan Aachari from T....
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....ty of gold bars which according to him were purchased as bullions / gold coins over a period of time and melted. 71. As per Section 123 of the Customs Act, 1962, the burden of proof in certain cases, where any goods to which the Section applies are seized in the reasonable belief that they are smuggled goods then the burden of proving that they are not smuggled goods shall be, in a case where such seizure is made from the possession of any person, the burden of proof would be on the person from whose possession the goods were seized and if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person. 72. Section 123 of the Customs Act, 1962 is extracted hereunder:- 123. Burden of proof in certain cases.- (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be- (a) in a case where such seizure is made from the possession of any person,- (i) on the person from whose possession the goods were seized; and (ii) if any person, other than the person from whose posse....
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....ion. 77. The Respondent has not produced any document to establish the means to purchase 3.097 Kg of gold bars / coins or gold jewellery as was stated by the Respondent and later by the Respondent's wife Nashrina Begum on 14.07.2021. 78. The Respondent has not explained the source of Income for having purchased gold worth valued at Rs. 91,98,090/- on the date of seizure. Therefore, it cannot be said that the Respondent had discharged the burden of proof under Section 123 of the Customs Act, 1962. 79. That apart, adjudication under the Customs Act, 1962 is governed by the Principle of Preponderance of Probability. In our view, the Additional Commissioner was right in ordering confiscation of the gold bars seized from the Respondent, as there were no convincing reasons to believe that seized gold bars were that of the Respondent and were purchased by the Respondent out of his income. 80. Though the Respondent had retracted the earlier statement dated 23.01.2017 on 20.02.2017 and 05.04.2017, three letters dated 13.04.2017, 17.04.2017 and 18.04.2017 sent by the father, mother and wife of the Respondent respectively contradict with each other regarding the nature of procurement ....
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.... register the SIM. 87. The call data between 09.01.2017 and 23.01.2017 indicates that several calls were exchanged between Mobile No.7395940600 and Mobile No.7397320012. Mobile No.7395940600 which was used by the said Batcha alias Pitchai had been in regular touch with Mobile No.7397320012 used by the Respondent. 88. It was incumbent on the part of the Customs Department to have also taken steps to get to the root of modus operandi adopted by the smugglers right from the registration of mobile numbers with fake names / identity and how an ordinary person like the Respondent with modest means of income could possess huge quantity of gold bar and where the Respondent was employed. 89. In the statements before the authorities, there is also no clear explanation forthcoming from the Respondent as to who were the persons to whom he had made panic calls particularly on 23.01.2017. There are few calls made to few other mobile numbers on 22.01.2017 as well. 90. Similarly, the Customs Department or the Directorate of Revenue Intelligence (DRI) should have obtained statement of Krishnaveni, Nagendran and Latha and the dealers who are issued the SIM Cards in their name. 91. The file also....
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....ld bars. 97. It is thus clear that there are several infirmities in the shoddy investigation carried out by the Directorate of Revenue Intelligence (DRI). The investigation was shoddy only to allow the actual smugglers of the gold bars to go scot-free and to punish the Respondent who was merely used a cheap labour to transport the smuggled gold bars. It is clear that the Customs Department and the Directorate of Revenue Intelligence (DRI) have allowed the main culprit to go scot-free. 98. It was incumbent on the part of the Respondent to have explain to the Customs Department that the calls made on 22.01.2017 and 23.01.2017 were regular calls made to only the family members and not acquaintance any of the persons who were behind the smuggling. 99. Further, the Respondent gave a statement on 23.01.2017 accepting his involvement in the smuggling, wherein the Respondent admitted that he was merely entrusted with the job of transportation of smuggled gold bars to be delivered to the said Batcha alias Pitchai. There are also indication of involvment of the Respondent in the past in similar activity for Murugan. 100. It is evident that the Respondent was merely a puppet in the hands ....