TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1086
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....fe and daughter by Indigo flight No.6E-663 on 18-12-2019. At the time of screening of his baggage at the domestic departure terminal of the NSCBI Airport, the CISF personnel recovered 7 pieces of gold biscuits and 1 kg of silver granules from the baggage of the appellant. As the appellant could not produce any document for legal purchase of the gold and silver in question on the spot, the CISF personnel "seized the yellow metal (appeared to be gold) and silver granules and handed it over to officers of Customs for initiating necessay action under the Customs Act, 1962. 2.1. On completion of investigation, a show-cause Notice No. 130/ADC/AIU/2020 dated 11.12.2020 was issued under Section 124 of the Customs Act 1962 proposing confiscations of the gold bars and imposition of penalty on the appellant under the provision of the Customs Act 1962. 2.2. The said Notice was adjudicated by the Joint Commissioner of Customs vide Order-in-Original No. 19/2022 JC dated 9.03.2022, wherein the Ld. adjudicating authority has absolutely confiscated the 7 pieces of gold and imposed penalty of Rs. 2,70,000/- upon the appellant, under Section 112 (a) & 112(b) of Customs Act, 1962. The silver gra....
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....rajatala, Howrah-711104 for refining and melting; that he received 700.050gms. of gold after refining and removing all impurities; that he bought the silver by paying a cash amount of Rs.44,908/- under bill no. S/0945 from M/s Jalan Silver Garden Pvt. Ltd, Kolkata; that he then decided to make jewellery at Nagpur since the jewellers in Kolkata were reluctant to give a certificate of purity; hence, he was travelling from Kolkata to Nagpur on 18-12-2019 with 700.000gms of gold and 01kg (approx.) of silver granules when he was intercepted by the CISF and handed over to customs. 3.3. The appellant submits that he got panicky and became nervous after seeing many customs officers. In order to avoid pressure and further questioning, he told the officers that he bought them from Kolkata. Later during the course of investigation, he gave all documents evidencing domestic procurement/ conversion of the gold and silver. The following documents were submitted by him in support of his claim that the said gold bars were made by melting his old jewellery: a) Receipt voucher/challan no.103 dated 13- 12-2019 in the name of Sunil Saraogi for refining/melting of 779.100gms. of assorted ol....
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....nts which were duly accounted for in their books of accounts. In support of this claim, the appellant submitted copies of Balance Sheet as on 31-03- 2008. From the said Balance Sheet, it is evident that the appellant had purchased gold valued at Rs.49,36,727.00/-. From the attached details, the full account of the gold is available and it may be found that the appellant had a balance of old gold ornaments of 800.862gms. 3.6. Thus, the appellant submits they have discharged the burden cast upon them as per section 123 of the Customs Act, 1962 that the gold in question were his own property and the gold bars were obtained by melting of his old jewellery. However, the appellant submits that the department has not brought in any evidence to substantiate the allegation that the gold in question was of smuggled in nature. 3.7. In the absence of any evidence on record to establish the foreign origin of the seized gold, the appellant submits that their claim of lawful domestic procurement of the gold bars remains uncontroverted. Consequently, the confiscation of the gold is untenable in law and liable to be set aside.In support of their contentions, the appellants have placed relianc....
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....pellant submits that the one gold bar with "Suisse" marking mentioned in the seizure list dated 05-12-2020, is also not of foreign origin as evidenced form the test report. As no test has been conducted on the other bars, the department has not produced any evidence to substantiate the allegation that the said gold bars were of foreign origin and smuggled in nature. On the contrary, he has discharged the burden under section 123 of the Customs Act 1962 by submitting all relevant documents vis-a-vis the certification regarding genuineness of those documents by Shri Amit Panja of M/s Rabindra Nath Panja & Co. 3.9. Thus, the appellant prayed for setting aside the order confiscating the 7 pieces of gold bars and imposing penalty on the appellant. 4. The Ld. A.R. reiterated the findings in the impugned order. 5. Heard both sides and perused the appeal documents. 6. I find that the appellant was a domestic passenger scheduled to travel by Indigo flight No.6E- 663 on 18-12-2019. At the time of screening of his baggage at the domestic departure terminal of the NSCBI Airport, the CISF personnel recovered 7 pieces of gold biscuits and 1 kg of silver granules from the baggage of t....
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....nd the prosecution must provide substantive evidence of foreign origin. 6.4. Further, I observe that in Union of India v. Mahesh Raj (1990 SCC (3) 115), the Hon'ble Supreme Court ruled that the burden under Section 123 arises only if there is prima facie evidence indicating foreign origin, which is entirely absent in this case. 6.5. Also, in D. Bhoormull (1974 AIR 859), the Hon'ble Supreme Court emphasized that suspicion alone is not a substitute for evidence. In Umrao Lal v. Commissioner of Customs (2016 (331) E.L.T. 216 (Tri.-Del.), it was held that in the absence of markings or material evidence proving foreign origin, confiscation is not sustainable. 6.6. In the instant case, I observe that CISF personnel has recovered the 7 bars gold from the procession of appellant solely on the suspicion that it was smuggled and later handed it over to Customs. However, instead of conducting an independent verification or forming their own reasonable belief based on credible evidence, the Customs officers proceeded with the seizure under the Customs Act without exercising due diligence. They failed to assess whether a reasonable belief of smuggling genuinely existed, as required by ....
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....e of Sunil Saraogi for Rs.1558/- as gold ornaments melting and refining charges issued by M/s Rabindra Nath Panja & Co. Gold and Silver melter, Refiner and Neharia 18,19,20, Ramcharan Sett Road, Ramrajatala, Howrah-711104. (pg 91) d) Tax invoice bearing no. S/0945 dated 12- 12-2019 in the name of Sunil Saraogi for Rs.44,908/- Issued by M/s Jalan Silver Garden Pvt. Ltd., 52 Manohar Das Street (Sona Patty), 1st Floor, Kolkata-700007. (pg 92) 6.10. I find that the above documents clearly establish that the 7 pieces of gold were made by melting his old jewellery. I find that the investigation officers verified all the documents submitted by the appellant and found that all documents were genuine. Shri Amit Panja, who melted the gold jewellery into gold bars in his statement categorically stated that he has melted the old gold jewellery received from the appellant. He also submitted the invoice raised by him for melting the jewellery. For ready reference, the copy of the said invoice is reproduced below: 6.11. Regarding the Markings of "Suisse" and "BAUNLEE CHOMPOO" availble on the gold bars, I observe that Shri Amit Panja stated that his company gave markings either of h....
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....I observe that the department has not produced any evidence to substantiate the allegation that the said gold bars were of foreign origin and smuggled in nature. On the contrary, the appellant has discharged the burden cast upon him under section 123 of the Customs Act 1962 by submitting all relevant documents evidencing domestic procurement of the gold. Thus, I hold that the appellant has discharged the burden cast upon them under section 123 of the Customs Act 1962 by submitting all relevant documents. I also find that the department has not produced any evidence to substantiate the allegation that the said gold bars were of foreign origin and smuggled in nature. 6.14. In this regard, I observe that it is a settled law that even foreign markings on gold bars do not, by themselves, establish the smuggled nature of the gold. The place of seizure in this case is the domestic terminal of NSCBI airport. Thus, I observe that additional evidence is therefore required to prove that the gold was illegally imported, which is not available in this case. 6.15. In this regard, I refer to the decision of this Tribunal in the case of Rajesh Kumar v. Commissioner of Cus. (Prev.), New Delhi....
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....ct, I agree with the above view." 6.17. Regarding the markings "Suisse" available in one piece of gold, I find that it was found to be gold of 99.7% purity and not 999.9% purity, which is normally associated with imported 24 carat gold. Thus, I find that the one gold bar with "Suisse" marking mentioned in the seizure list dated 05-12- 2020, cannot be considered to be of foreign origin as evidenced form the test report. Regarding the remaining 6 bars, I also find that there are no specific findings in the impugned order to prove that "BAUNLEE CHOMPOO" is a foreign marking. It is seen that "BAUNLEE CHOMPOO" is neither an internationally recognized brand nor a certified hallmark or refinery marking associated with any established gold manufacturer. In the absence of any official certification, industry recognition, or conclusive evidence linking "BAUNLEE CHOMPOO" to a specific foreign source, such markings, if they even existed at seizure cannot be relied upon to establish the foreign origin of the gold. There is no factual or legal basis to conclude that such markings, even if present, prove illicit importation. Thus, I observe that the confiscation of the remaining 6 gold bars on....