TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1189
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....years resident of Mirzapur (U.P) and admitted that he was carrying 3 piece of gold bars weighing 3.0 Kg along with delivery Challan Sr No 41 dated 03/01/2022 issued by M/s Raj Shree Jewelers Basnahi Bazar, Mirzapur in favour of M/s K.K Gold Coimbatore and authority letter on a letter head of M/s Raj Shree Jewelers. The apprehended person informed to the officers that another person named Shri Ramdhani is also travelling in Train No 12311, berth no 38 Coach No S8 and this person is also carrying gold. The officers apprehended such person and during interrogation, the said person informed that he was carrying 3 pieces of gold bars weighing 3000 gram through cover of Challan No 38 dated 02/01/2022 issued by M/s Raj shree Jewelers Mirzapur. The Delivery challan is in favour of M/s K.K Gold Coimbatore. Thereafter, the said gold bars were seized under Section 110 of the Customs Act 1962. The Custom officers recorded the statement of both the apprehended persons under Section 108 of the Customs Act 1962. The appellants in their statement informed to the officers that such seized gold bars were handed to him by a persons whose name they did not know on the instructions of Mr Neeraj Agarwal....
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....cted by the appellants on very first opportunity. It is his contention that the appellants have purchased the gold bar in question from Neeraj Agarwal, Mirzapore through cash memo whose details have been provided to the Respondents and payments of the same has also made through cash. 7. The appellant no. 2 & 3 were going to Coimbatore to handover the gold to M/s. K.K.Gold for manufacturing of designer jewellery and delivery challans were produced by the appellants no. 2 & 3, when DRI officers apprehended them. 8. It is his further submission that there is no inscription mentioned on the seized gold bar and purity of gold is also not equal to 99.9%. As per CRCL test report the purity of gold is only 99.6%. Therefore, it cannot be held that gold is of foreign origin as the purity of foreign origin gold is 99.9%. 9. It is his submission that it is established beyond doubt that the seized gold bars were not of foreign origin because purity was 99.6% as per CRCL, therefore, it cannot be confiscated. 10. He further submitted that at the time of bail application, purchase register of M/s Rajshree Jewelers Mirzapur was produced to establish the licit possession of the gold at the first....
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....partment. Therefore, the proceedings are not sustainable against the appellants. To support his contention he relied on the following decisions: a. Sitaram Sao v. State of Jharkhand -2007(12) SCC 630. b. Mridul Agarwal v. Commissioner of Customs, Lucknow, 2018 (362) E.L.T 847 (Tri-All.) c. Shantilal Mehta v. UOI and Other, 1983 (14) E.L.T. 1715 (Del.) d. CCC (P) v. Prabhash Kumar Jalan, CESTAT, Kolkata Bench, Final Order No. 75500/2021, dated 27.8.2021. e. Shri Sarvendra Kumar Mishra v. Commissioner of Customs Vide Final Order Nos. 70198-70199/2021, dated 6.9.2021. f. Nand Kishore Modi v. Commissioner of Customs (Preventive), West Bengal, 2015 (325) E.L.T. 781. g. Rajesh Pawar v. UOI, 2014 (309) E.L.T. 600 (Cal) h. Commissioner of Customs (Prev.) Kolkata v. Ashok Kumar Agarwal, 2017 (348) E.L.T. 555 (Tri-Kolkata). 16. He further submitted that Department has failed to discharge the obligation cast upon it. It is the case of the department that the gold is smuggled. To prove the same be smuggled, the Department has not extended the investigation to reach the root of the matter. The Department has completely failed to go into the root of the matter as to how the good....
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....he confession from independent sources, which has admittedly not been done in the present case". Reliance in this regard is placed on Apex Court judgment in the case of Mohtesham Mohd. Ismail vs. Spl. Director 2007 (220) ELT 3 SC." 18. He further submitted that the statement made by the person before any gazette officer of customs during the course of any inquiry or the proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which contains when the person who made the statement is to be examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. To support this contention he relied on the decision of the Hon'ble Punjab and Haryana Court in Jindal Drugs Pvt. Ltd. v. UOI [2016(340)E.L.T. 67 (P & H). He also relied on the decision of Andaman Timber Industries [2015 (324) E.L.T 641 (S.C) =2017 (50) S.T.R. 93 (S.C.)] 19. He further submitted that there is no material available on record to show that the invoices placed by the appellant were false or fab....
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....ata in the case of Ram Naresh Chaurasiya v. Comm. Of Customs (Prev.), Patna, reported in MANU/CK/0089/2018 2019 (365) ELT 940 (Tri.- Kolkata) * CESTAT, Kolkata in the case of Commr. Of Customs (Preventive), Kolkata v. Ashok Kumar Agarwal, reported in MANU/CK/0180/2016: 2017 (348) ELT 555 (Tri.-Kolkata) * CESTAT, Kolkata in the case of Goutam Karmokar Vs. Commr. Of Cus. (Prev.), West Bengal, reported in 2010 (261) ELT 812 (Tri.-Kolkata) * Hon'ble Calcutta High Court in the case of Rajesh Pawar v. Union of India, reported in MANU/WB/0895/2014: 2014 (309) ELT 600 (Cal.) 22. Heard the parties. Considered the submissions and considered the evidence placed before us. We also have considered all the case laws relied upon by both the sides and then come to the conclusion as under: In this case it is a fact that the appellant no. 2 & 3. were apprehended at Gaya Railway Station and having on on 04.01.2022 around 0.15 hours and having 3 kg of gold each and produce the challan issued by M/s. Raj Shree Jewellers Basnahi Bazar, Mirzapur. 23. To say that gold in question is not smuggled one, during the course of investigation, the appellant no. 1 has also submitted that the gold in q....
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....ty. Moreover the statements recorded during the course of investigation have been retracted before the Session Judge. In that circumstances, the statements recorded during the course of investigation are not a piece of evidence to allege that gold in question is of smuggled in nature. 29. Moreover, the issue whether before seizure, under Section 110 of the Customs Act, 1962 a reasonable belief has to be made by the investigating Agency which they have failed to do so as held by the Hon'ble Delhi High Court in the case of Shanti Lal Mehta Vs Union of India and Others 1983 (14) E.L.T. 1715 (Del.) : "5. The real question for decision in this case is whether the confiscation of the goods is lawful when the detention of the goods was unlawful. It will be remembered that the goods were seized on 15-2-1967. Six months expired on 14-8-1967. During this period of six months no show cause notice was issued. The Additional Collector made an order on 4-8-1967 extending the time by three months. The extended period of 3 months expired on 14-11-1967. But what is significant is that the order of extension was made ex parte behind the back of the petitioner and without any notice to him. After ....
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....d under sub-section (1) of Section 110, if a notice as provided for under clause (a) of Section 124 is not given within 6 months of the seizure of the goods, the officer is bound to return the goods to the person from whose possession they were seized. The proviso enables the officer to get an extension of the period of notice from six months to one year by applying to the Collector of customs. 7. The true effect of the provision of Section 110 is that if notice for further proceedings under Section 124 is not served within the time of six months and in any event one year from the date of the seizure, the seized goods must be returned to the person from whose possession they were taken. This is an absolute obligation and a liability imposed on the customs under sub-section (2) of Section 110 of the Act. The power to retain the goods is no longer available after the period has expired. Section 110 puts a limit to the power of seizure and retention of goods by the officer. When once action is taken under Section 124, before the expiry of the period as contemplated in Section 110 he may continue to retain the goods. After the expiry of six months, the retention of the seized goods....
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....hs is the outer limit for the detention of the goods by the customs, unless it is extended further. The further extension cannot be for a period exceeding six months. The extension beyond the original period of 6 months can only be made by the collector of customs "on sufficient cause being shown" to him. If within this period, original or extended, the concerned officer fails to make out a prima facie case in support of his reasonable belief that the goods are liable to confiscation, in that case the goods shall be returned to the person from whose possession they were seized." 27. Further, in the case of Shri Balwant Raj Soni (Supra) again the issue has been examined and this Tribunal held as under: "The Appellant stated that the gold pieces/bars were seized on the reasonable belief that they were smuggled into India from Bangladesh. The Adjudicating authority has relied upon the decision of the Hon'ble Supreme Court in the case of Gopal Das Uddhav Das Ahuja v. UOI reported in MANU/SC/0530/2004 2004 (176) ELT 3 (SC) for effecting the seizure on the ground of 'reasonable belief. However, the said case is distinguishable on the ground, firstly, that the subjected case w....
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.... 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 MANU/SC/4270/2007: (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 suspect or incredible but only to confirm and support that which as evidence is sufficient and satisfactory and credible: and corroborative evidence will only fill its role if it is completely credible....." 19. The Appellants also relied upon the decision of the Hon'ble Delhi High Court in the case of Shanti Lal Mehta vs. UOI and Others reported in MANU/DE/0249/1982: 1983(14)ELT1715 (DEL), which elaborately dealt with Town seizures. The relevant portion of the Order are reproduced below: 19.1 The Appellants stated that Reasonable belief must be at the time when the goods are seized and not subsequent to seizure. "54. The other question which was argued before m....
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....t 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 reasonable man in the circumstances of the case would entertain about the existence or non-existence of a thing. Simply because the goods were not accounted for at that time does not necessarily mean that the goods were smuggled goods. Unaccounted goods may be stolen goods. Reasonable belief could be entertained either on the basis of some external indicia or on the basis of some internal information that the goods had been illegally imported into India from Nepal or some other foreign country either without payment of duty or in contravention of any restriction or prohibition imposed by statute. There was nothing to suggest the foreign origin of the goods....
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....k. 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 document available on record to establish that gold bars/pieces were smuggled into India from Bangladesh. The impugned order has concluded that the said gold bars/pieces were smuggled into India only on the basis of assumptions and presumptions without any concrete evidence to substantiate this claim. Hence, we hold that material evidence available on record does not establish that the gold bars/pieces were smuggled into India without any valid documents. Accordingly, answer to question (i) above in para 13 above is negative. 21. The next question to be answered is whether the burden of proving that the goods are not smuggled rest with the Appellants. The Appella....
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....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. It CC, Lucknow, MANU/CN/0316/2018 2019 (369) ELT 1177 (Tri-All), it has been held as under: "3. The Learned Counsel for the appellants submits that in terms of Section 123 of Customs Act, 1962 the onus is on the appellant to prove that the gold in question is not smuggled one, although appellants have failed to prove that gold is not smuggled one but the allegation of the Revenue that the gold is restricted item being third country origin has not been proved by the Revenue and no evidence has been brought on record by the Revenue that how the gold is in question has come to India through Nepal. In that circumstances, gold cannot be absolutely confiscated in the facts and circumstances of the case, therefore, gold is required to be released to the appellants on payment of redemption fine a....
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....66. 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 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, MANU/GJ/0076/1969: 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." 22.5 The Appellants also relied upon the decision in the case of Balanagu Naga Venkata Raghavendra vs. CC Vijayawa....
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....ft 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 was smuggled and therefore they have not discharged their responsibility of forming reasonable belief under Section 123 without which the burden of proof will not shift to the person from whom the gold is seized." 22.6 It is observed from the Test report that the gold bars/pieces were of purity 99.5, 99.6 and 99.8 only. Normally foreign origin/foreign marked gold will be of purity 99.99. There is no foreign mark av....