TaxTMI 
TaxTMI 
2024 (11) TMI 1614
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....easonable belief that the gold recovered was of foreign origin and was smuggled into India through unauthorized route and as for which the so seized gold is liable to be confiscated in terms of the provisions of the Customs Act, 1962. 2.1 Subsequently, Shri Anil Kumar Gaur's statement was recorded on 26.05.2018 under section 108 of the Customs Act, 1962 wherein he inter alia stated that he was an employee of "M/s A.R.P. Ornaments" situated in Varanasi. He also stated that he was not the actual owner of the so-seized gold rather the ownership of the seized gold belonged to Shri Anil Kumar Soni in the capacity of having proprietorship firm named "M/s A.R.P. Ornaments". 2.2 Thereafter, a prayer for release of the seized gold was submitted by Shri Anil Kumar Soni vide letter dated 26.06.2018 stating that he was an ornament merchant dealing with items of Gold and Silver. In course of his business, he had purchased 4690.409 grams of Gold in the form of ornaments & bars from various Gold Traders and 210.750 grams of gold in the form of ornament was given to him by his Wife. Out of the total 4901.159 Grams of gold, he had converted 2843.730 grams of gold with purity ranging around 70....
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....(s) were issued with Order-in-Original No.59/ADC(P)/CUS/WB/2020-21 dated 12.11.2020 whereupon the seized 1999.900 gms of gold were confiscated under Section 111(b) and Section 111(d) and a penalty to the tune of Rs. 6,00,000/- under Section 112(b) along with a penalty tune of Rs. 90,00,000/- under section 114AA of the Customs Act, 1962 has been imposed upon the claimant i.e. Shri Anil Kumar Soni and a penalty of Rs. 6,00,000/- under section 112(b) of the Customs Act, 1962 was imposed on Shri Anil Kumar Gaur. 2.7 Being aggrieved with the said Order-in-Original dated 12.11.2020, the appeal was preferred before the Ld. Commissioner of Customs (Appeals) and vide Order-in-Appeal No. KOL/CUS/CCP/AKR/71-72/2022 dated 28.02.2022 wherein the Ld. Commissioner of Customs (Appeals) was pleased enough to set aside the Order-in-Original with consequential benefits. Hence, the claimant was supposedly to get back the so-seized gold. 2.8 Consequently, the appeals were filed against the Order-in-Appeal No. KOL/CUS/CCP/AKR/71-72/2022 dated 28.02.2022 by the Ld. Commissioner of Customs (Prev), WB, Kolkata in view of the following:- "Shri Anil Kumar Gaur's voluntary statement clarified t....
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....it would be sufficient if the circumstances on the material before the officer, prima facie gives sufficient grounds to entertain the belief, one such factor being prior information 5.1. That Hon'ble Supreme Court in Judgement dated 03.04.1974 passed in Collector of Customs, Madras and Ors. Vs. D. Bhoormul has held that with regard to these specified goods if seized under this Act in the reasonable belief that they are smuggled goods, the burden of proof that they are not such goods shall be on the person from whose possession, they are seized. The prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree. 6. Reliance is also placed on the decision of the Hon'ble Supreme Court in Om Prakash Katari Versus Commissioner 2019 (368) ELT (A) 155 SC which upheld the decision of the High Court of Kerala wherein it was held that the appellant therein having been unable to explain the source of the gold which was confiscated, the order passed by the High Court cannot be interfered and the appeal was dismissed. Merely on the basis that interception /seizure had not been affected in an international border or....
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....eighing: 2000 gms from the said gold ornaments by enhancing its purity to 99% by weight of gold. So it is clear that Shri Anil Kumar Soni may make 02 gold bar weighing 2,000.000 grams from the said gold ornaments by melting process enhancing its purity to 99% by weight of gold. But report of the CRCL, Custom House, Kolkata clearly stated that the seized gold bars purity is above 99.5 % to 99.6% by weight of gold. 8.1 Shri Anil Kumar Soni did not submit documents regarding proof of purity of Gold ornaments (2843.32 gms ) which was converted to Gold Bar of 2000.00 gms and also from which shop the same gold ornaments were converted to gold bar. 8.2 The onus is on the respondent to establish with documents that the gold which was seized was from and out of the old gold jewellery purchased by cash and converted to 99% purity .This aspect of conversion from and out of the gold jewellery to 99% purity was never established by respondent and also from which shop the same gold ornaments were converted to gold bar. 9. It is also found mismatched/ anomalies in weight of gold bars by the respondents It was recorded about the weighment of the gold under seizu....
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....hat he had accumulated stock of old jewellery and ornaments weighing around 4690.409 Grams over the course of time which he got melted and converted into two bars each weighing 1kg. In accordance to which he produced all the relevant documents to the relevant authority featuring the legality of the said gold. (e) Department has simply refuted the documents on the basis of mere assumption and presumption which is not backed by a single piece of evidence. Thus, the documents couldn't be said to be forged. In support, he relies on the decision of this Tribunal in the case of Ajit Bhosle reported in 2020 (374) E.L.T. 814 (Tri. - Kolkata); (f) He also contended that nowhere from the statements of the claimant, it transpires that the gold is of Foreign Origin and smuggled therefore the allegation is baseless and also remains without any documentary evidence. (g) He also submitted that it also goes beyond from the nature and character of the so-seized gold. Since, it doesn't carry any foreign marking the gold is indigenously procured. Also, no matter what the purity percentage is it is an admitted fact by the respondent that the gold so seized in the form of gol....
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.... A.R.P. Ornaments and Shri Anil Kumar Soni claimed the owner of the gold in question. It is the fact on record that the gold recovered was not having any foreign markings and it is town seizure and having purity less than 99.9%. Accordingly, Shri Anil Kumar Soni claimed the owner of the gold in question and he produced the documentary evidences with regard to procurement of gold in question. 7. In that circumstances, we have to see the observations made by the ld. Commissioner (Appeals) in the impugned order, which are as under : "18. I have carefully considered the Order-in-Original, Grounds of Appeal and the submission made by the appellants. I find that 02 (two) gold bars weighing 1999.900 grams were recovered from the possession of Shri Anil Kumar Gaur, who was intercepted in an unreserved compartment of 12321 Howrah-Mumbai Mail on 25.05.2018. Shri Anil Kumar Gaur failed to produce licit documents supporting the lawful acquisition/possession/transportation of the said gold bars. 19. On 26.06.2018, a prayer for the release of gold was submitted by Shri Anil Kumar Soni, an Ornament Merchant, who claimed that he had purchased 4690.409 grams gold from ....
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.... inculcate a reasonable belief in the mind of the respondents at the time when they seized the goods that the goods were liable to confiscation. Reasonable belief is not a mere suspicion or a mere subjective satisfaction. It is something more than that. It is a belief which a prudent man on applying his mind judicially to the facts will arrive at ...." In the instant matter, it is pertinent to mention that the gold bars were recovered from the possession of Shri Anil Kumar Gaur in Kolkata which is far from the international border. The assertions adduced in the impugned order which led to the reasonable belief that the said gold bars were of smuggled nature do not appear to be cogent and seem to be mere suspicion. 22. The prerequisite for putting burden on the appellant-1 and appellant-2 u/s 123 of the CA'62 for proving that the seized gold is not smuggled is the reasonable belief, which led to the seizure of the said gold. That reasonable belief should not be a mere suspicion and should be clearly recorded by the concerned authority. In the instant case, that reasonable belief itself is questionable. Non-submission of supportive documents during interception ....
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...., that they are smuggled, the onus of proving that they are not rests upon the person from whom the goods were seized. The first question is whether there was reasonable belief. In this case, we find that the seizure was based on the information that they had received and that the documents pertaining to the gold, were not found in shop at the time of seizure. There is nothing on record to suggest that the pieces which were seized had any foreign markings. Under these circumstances, we find that there was no reasonable belief for the seizure. Further, we find that the appellant had produced various documents to show how he came in the possession of gold and these documents, on investigation, were found to be genuine. ............. Under the circumstances, we find that not only was there no reasonable belief for seizure of the gold and the Currency in the first place, but also that the appellant has satisfactorily explained that the gold and currency which were in his possession. The confiscation of gold and the currency and imposition of penalty the appellant under Section 112 of the Customs Act, 1962, are, therefore not sustainable and the impugned order needs to....
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....oborative evidence and without ascertaining the source of gold bars and the chain of smuggling, cannot form the basis to establish the smuggled nature of the gold bars. 25. The Adjudicating Authority, in the impugned order, has observed that M/s A.R.P. Ornaments failed to produce any document in support of conversion of gold ornaments to the gold bars recovered from the possession of Shri Anil Kumar Gaur and used this observation to corroborate the notion that the said gold was smuggled in nature. Here, I refer to the case of Union of India v. Imtiaz Iqbal Pothiwala (2019 (365) E.L.T. 167 (Bom.) wherein Hon'ble High Court of Judicature at Bombay opined that: "We are of the view that in the absence of evidence in the form of regular books of account, registration under the income-tax and Sales Tax, etc., cannot ispo facto lead to the conclusion that the seized gold bars, are smuggled gold bars. These may lead to proceedings for breaches of other Acts but it does not follow from it that the gold bars are smuggled goods .... " Hence, non-submission of conversion documents by M/s Alankar Jewellers does not ipso facto mean that the gold bars were of smuggl....
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.... it cannot be an effort to hide the alleged smuggled nature of the gold bars and it appears to be a technical mistake. The mere fact that some invoices were not mentioned into the Customer Account Ledger Report' does not ipso facto mean that the gold bars were smuggled and Shri Anil Kumar Soni tried to hide the same by not mentioning few invoice details in the 'Customer Account Ledger Report'. Hon'ble Supreme Court in the case of Hindustan Steel Ltd. - 1978 (2) ELT J159 (SC) has held that no penalty should be imposed for technical or venial breach of legal provisions or where the breach flows from the bonafide belief. After appreciating the foregoing facts and discussion, there is nothing brought out in evidence in the instant case, which attracts the ingredients of section 114AA of the Customs Act, 1962. The mere fact that some invoice details are not reflected in Customer Account Ledger Report' cannot be a ground to impose penalty u/s 114AA of the CA'62 in this case. 28. The facts and discussion supra along with the perusal of the available records. unequivocally establishes that the gold weighing 1999.900 grams recovered from the po....