TaxTMI 
TaxTMI 
2025 (6) TMI 1189
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....n introduce himself as Rameshwar Bind aged about 31 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 d....
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....s on the basis of statement of appellant no. 2 and 3 and which were retracted 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....
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....om the inquiry. None of the documents which were produced by the Appellant No. 1 have been discredited by the department. 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, th....
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.... made before Customs officer as a result of coercion cannot be basis of conviction under section 135(1) (a) (b) of the Customs Act. That at any rate, it was incumbent upon the opp. party to corroborate the 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 In....
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.... ST., Siliguri, reported in MANU/WB/0547/2016: 2016 (337) ELT 10 (Cal.) • CESTAT, Kolkata in the case of Madhukar Sonaba Bhagat v. Commr. Of Customs (Prev.), West Bengal, reported in MANU/CK/0056/2019: 2019 (368) ELT 990 (Tri.-Kolkata). • CESTAT, Kolkata 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 S....
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....has to be tested as provided under Section 138(B) of the Customs Act, 1962 by way of examination in Chief and after the examination in Chief The Adjudicating Authority has to make up his mind that the statements made by the accused are admissible in evidence. The said examination has not been done by the Adjudicating Authority. 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 perio....
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....tion, he may seize the goods. The proviso enables the officer in cases where it is not practicable to seize the goods, to serve on the owner of the goods an order that he shall not remove, part with or otherwise deal with the goods except with the previous permission of such officer. Sub-section (2) enables the officer to keep the seized goods for a period of six months. But when goods are seized 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 Se....
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....to property indefinitely upon a mere reasonable belief of an officer of customs that the goods are smuggled goods and liable to confiscation. A merciful legislature fixed six months time within which the concerned officer must collect evidence and material in support of his belief that the seized goods are liable to confiscation and to issue notice to the owner of the goods to show cause why the goods be not confiscated. Six months 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 pi....
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....ive evidences. (1) In Assistant Collector of Customs v. Charan Das Malhotra, MANU/SC/0605/1971 1971 (1) SCC 697, Shelat J., has held reasonable believe to be relevant and not extraneous. (ii) In Kewal Krishan V. State of Punjab, MANU/SC/0095/1962: 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 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 i....
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....s. 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 reasonable man in the circumstances of the case would entertain about the existence or non-existence of a thing.....
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....ter. 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 document available on record to establish that gold bars/pieces were smuggled into Ind....
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....gled 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. It CC, Lucknow, MANU/CN/0316/2018 2019 (369) ELT 1177 (Tri-All), it has been held as under: "3. The Learned Counsel for t....
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....ed 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 those markings were made by a particular company in the ordina....
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....ter 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 as there is a hi....
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....the contrary, the investigation could not provide any evidence to establish the smuggled nature of the gold. In the absence of any such evidence, the burden of proving that the gold bars/pieces were not smuggled one cannot be thrust upon the Appellants. 22.8 In view of the above discussions and the decisions cited above, we hold that the burden under Section 123 of Customs Act, to prove that the gold is not smuggled one, does not lie on the Appellants, in this case. Accordingly answer to question no (ii) in para 13 above, is negative." 30. In view of the discussion, from the facts of the case, as there is no mentioning of foreign origin on gold having purity of 99.6% and not recovered either at port/airport or international border, we hold that the burden under Section 123 of the Act to prove that the gold is not the smuggled one, does not lie on the appellant. Further we hold that as evidence of GST paid in the gold in question has been produced by the appellant in support of the claim also that goods are not smuggled one has been discharged by the appellant in terms of Section 123 of the Act, and Revenue has failed to discharge the onus to prove that gold in question ....
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.... exempted) 0.00 . (d) Inward supplies (liable to reverse charge) 27000000.00 0.00 405000.00 405000.00 0.00 (e) Non-GST outward supplies 0.00 supplies and inward supplies liable to Outward taxable charge (a) supplies (other than zero rated, nil rated and exempted) (b) Outward 3.2 Out of supplies made in 3.1 (a) above, details of inter-state supplies made Nature of Supplies Total taxable value Integrated tax Supplies made to Unregistered Persons 0.00 0.00 Supplies made to Composition Taxable Persons 0.00 0.00 Supplies made to UIN holders 0.00 0.00 Details 4. Eligible ITC Integrated tax Central tax State/UT tax Cess A. ITC Available (whether in full or part) (1) Import of goods 0.00 0.00 0.00 0.00 (2) Import of services 0.00 0.00 0.00 0.00 (3) Inward supplies liable to reverse charge (other than 1 & 2 above) 0.00 405000.00 405000.00 0.00 (4) Inward supplies from ISD 0.00 0.00 0.00 0.00 (5) All other ITC 323121.16 0.00 0.00 0.00 B. ITC Reversed (1) As per rules 42 & 43 of CGST Rules 0.00 0.00 0.00 0.00 (2) Others 0.00 0.00 0.00 0.00 C. Net ITC available (A-B) 323121.16 405000.00 405000.00 0.00 D. Ineligible ITC ....