TaxTMI 
TaxTMI 
2026 (5) TMI 653
X X X X Extracts X X X X
X X X X Extracts X X X X
....cal search in presence of panchaas and the proceedings were recorded by drawing a mahazar dated 16.10.2019. During the course of search all the passengers huge quantity of gold and Jewellery was recovered from the passengers including gold cut pieces weighing 4046.300 gms from Shri Ranjith M.R., one of the passengers which was kept in a dark blue colored cloth waist belt with pouch in front, tied around his waist inside the underwear. On necessary investigation it revealed that Shri Ranjtih M.R. was working with one Shri P.R. Mohanlal, owner of M/s. Vajra Jewels, brought the gold in cut pieces from M/s. Swarna Shilpi, Chennai. As Shri Ranjith could not produce any document about licit procurement of the cut pieces of the gold and after being examined by the certified Gold Assayer Shri C.N. Pradeep Kumar, about the purity the gold cut pieces weighing 4046.300 gms which was found to be 24ct., international value of Rs.1,40,14,146/- were seized on the reasonable belief that the same was smuggled. Later as a part of further investigation, statements of various persons were recorded under Section 108 of the Customs Act, 1962 from time to time, documentary evidence analysed and on comple....
X X X X Extracts X X X X
X X X X Extracts X X X X
....No.157/13/2021-GST dated 20.07.2021 relates to extension of period of limitation under the CGST Act, 2017 deliberated by the GST Council which is not relevant and not applicable to the facts of the present case. The argument of the respondent that the show-cause notice is barred by limitation cannot be acceptable at this stage since the said point has not been raised earlier. • Even though the smuggled gold of foreign origin is always in the form of bars bearing marking of the mint of the country of origin, but in the present case, merely because the gold was converted into cut pieces and do not contain the foreign marking, it does not disprove that the gold is not of foreign origin and smuggled one. • Also, he has submitted that merely the goods were seized far away from the international border itself, it will not hold water as there is no dispute of the fact that gold was brought from Chennai which has the airport as well as sea, international border. In support, he has referred to the judgment of Hon'ble Kerala High Court in the case of Om Prakash Khatri [2019(366) ELT 402 (Ker.)] and Hon'ble Madras High Court in the case of CC, Chennai Vs. Mohammed Al....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... In the case of M/s. Swarna Shilpi, Shri Dilip Kumar and Shri Kamalesh Kumar, no appeal has been filed against the Order-in-Original dated 24.02.2022. Thus, the impugned order pertained to M/s. Swarna Shilpi, Shri Dilip Kumar and Shri Kamalesh Kumar in so far as claims of gold to the extent of not being of foreign original has attained finality. • The learned Commissioner(Appeals) has not taken into account the contradictions and submissions of persons of M/s. Swarna Shilpi, M/s. Sayam Jewellers, Shri Ranjith M.R., Shri Jaison Baby and Shri P.R. Mohanlal. There is failure on the part of the respondents to provide licit receipt of the impugned goods and the documents fabricated to substantiate its legitimacy is an attempt to cover the entire transaction. • None of the persons whose statements were recorded had retracted at any point of time on the incident that has taken place on 16.10.2019 and till the date of issue of the show-cause notice dated 10.12.2020. • The Ld. AR for the revenue discussing the facts and circumstances of each of the below mentioned cases and comparing the same to the facts in hand submitted that the said judgments are n....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... an attempt to tread into specific areas of the GST Act that are statutorily not within the ambit of the Kochi Customs Preventive Commissionerate jurisdiction. Prior to 12.09.2022, E-Way bill was not required to inter-state or intra state movement of gold as per Rule 138(14) of the CGST Rules, 2017, goods under Chapter 71 are exempt from mandatory e-way bill. However, from 12.09.2022, e-way bill generation for transporting gold and other precious stone under Chapter 71 has been made mandatory. In respect of e-way bill, Rule 138 states that it is to be used by the person causing such movement of goods or by the transporter. Hence, mis-use of the e-way bill during 2019 by the Department is not correct. • The interpretation on job work provisions / violations under GST as alleged in the show-cause notice and confirmed in the impugned order are solely within the jurisdiction of the GST Department, even if taxable under the GST on the supply of services by goldsmith / job work. • The circumstances as reflected in the show-cause notice, the seizures, mahazars, the Assayers Certificates and statements are exaggerated and the quantification of the demand are thoug....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ST and supplied the same to M/s. Vajra Jewels, then it is a job-work transaction with M/s. Vajra Jewels. All these facts have been ignored and blown out of proportion by the Customs Department. 6. He has explained the transaction involving the gold as follows:- • On 14.10.2019, Shri Ranjith M.R. carried 3481 gms of their manufactured 22ct Indian origin gold ornaments to M/s. Swarna Shilpi of Chennai, for outright sale, based on the earlier oral orders placed on them by M/s. Swarna Shilpi. He was also carrying the digital Tax invoice bearing the No.VJ/001/2019-20 dated 15.10.2019, for 3481.250 gms of 22 ct Indian origin gold ornaments valued at Rs.1,29,01,590/- (including 3% GST of Rs.3,75,774/-). • While returning from Chennai, Shri Ranjith M.R. was given 3240.090 gms of Indian origin 24 ct gold cut bits by M/s. Swarna Shilpi along with the digital tax invoice No.SA2410/2019-20 dated 15.10.2019 in order to manufacture gold jewellery by M/s. Vajra Jewels. So, until the said 24ct gold bits remain in the possession of M/s. Vajra Jewels, the Indian origin 24ct gold cut bits are owned by M/s. Vajra Jewels. All the 24ct gold cut bits of Indian origin, supplie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wed in the present case, the Department never discharged the burden of proof with evidences in establishing the fact that the seized gold has been smuggled. • The ownership of 3240.090 gms of 24ct gold cut pieces given by M/s. Swarna Shilpi Jewellers to Shri Ranjith on 15.10.2019 legally rests with M/s. Vajra Jewels until the proportionate jewellery is manufactured from it and returned to M/s. Swarna Shilpi. The value of the said 3240.090 gms of 24 ct gold cut pieces represents the value of a major potion of payment previously received by M/s. Vajra Jewels (in kind) for the gold ornaments that had been sold by them to M/s. Swarna Shilpi Jewellers vide Invoice No.VJ/001/2019-20 dated 15.10.2019 but was directly ploughed into the 3240.090 gms of gold cut pieces. This fact has been endorsed by the statements of Shri Dilip Kumar dt. 19.02.2020 who said that the 999 purity gold was given to Shri Ranjith on 15.10.2019 in the form of many pieces and also in his statement dated 09.02.2020 stated that 3240.090 gms of gold has been supplied to Shri Ranjith on 15.10.2019. • The show-cause notice is barred by limitation since the date of the seizure was 16.10.2019 and....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... produce any document relating to the huge quantity of gold cut pieces weighing 4046.300 gms valued at Rs.1,40,13,146/- (international value) and at Rs.1,59,62,654/- (market value), carried by him, the same was placed under seizure. Later investigation was conducted recording statements of various persons including statement of Shri P.R. Mohanlal, Proprietor of M/s. Vajra Jewels for whom it is claimed that Shri Ranjith used to bring gold from M/s. Swarna Shilpi, Chennai and statements of partners of M/s. Swarna Shilpi, Shri Dilipkumar and statement of Shri Kamaleshkumar, Shri Dinesh Kumar of M/s. Sayam Jewels, Shri Jaison Baby, GST Practitioner recorded under Section 108 of the Customs Act, 1962. 10. The adjudicating authority after a detailed analysis of the documentary evidences and oral statements vis-à-vis the claim of the appellant Shri P.R. Mohanlal, owner of M/s. Vajra Jewels, Shri Ranjith and others, concluded that the appellant could not discharge the burden of proof to establish that the gold is licitly procured by them, following the principle of law laid down by the Hon'ble Kerala High Court in the case of Om Prakash Khatri (supra), later upheld by the Hon'ble....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Brief facts of said are that on 04.02.2014, two persons viz. Shri Surendra Singh and Shri Dhiraj Kumar Devasi, both employees of M/s. Panna Gold Impex Ltd., Mumbai were intercepted by the DRI at Vyttila in Ernakularm from whom gold bars and pieces weighing 4430.730 gms, valued at Rs.1,54,28,372/- along with gold ornaments weighing 5536.200 gms. valued at Rs.1,32,78,898/- were seized. Also Rs.40,000/- in cash alleged to be the sale proceeds of contraband gold were recovered. The confessional statements of the apprehended persons revealed involvement of one Shri Om Praksh Khatri, Director of M/s. Panna Gold Impex Ltd. The adjudicating authority in the said case directed absolute confiscation of the gold bars and jewellery under Section 111(a), (d) and (m) read with Section 120(1) of the Customs Act, 1962 and imposed penalty of Rs.20.00 lakhs on Shri Om Prakash Khatri and Rs.10.00 lakhs on M/s. Panna Gold Impex Ltd. under Section 114AA of the Customs Act, 1962. Appeals filed before the Commissioner(Appeals) resulted in modification of the order of the adjudicating authority by quashing the confiscation of the gold bars and ornaments, which was later upheld by the Tribunal. Revenue app....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dividuals further fortified the belief entertained by the officials. The statement of the carriers of the gold under Section 108 of the Act, can be safely relied upon by the Department to proceed against them. The decision in Shri Ganesh Enterprises (supra) relied on by the Tribunal is not applicable to the case, because the said decision deals with confiscation of non-notified goods and not gold or other notified goods. ... ... ... ... ... ... 18. We have considered the decisions relied on by both sides and are of the opinion that in case of seizure of gold, even without markings, the burden is upon the person, who has custody of the gold, under Section 123 of the Act, to prove that the gold was legally acquired. The statement recorded under Section 108 of the Act could be safely relied upon in the proceedings against respondents. In K.I. Pavunny v. Assistant Collector, (1997) 3 SCC 721 = 1997 (90) E.L.T. 241 (S.C.) the Hon'ble Supreme Court has held that a person summoned under Section 108 of the Act is "not the person accused of an offence" for the purpose of Section 24 of the Evidence Act. The primary question for consideration in that case was whethe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e it. ... ... ... ... ... ... 21. The assertion was that the gold found on the two employees were that purchased by the Company at Mumbai; which details are available in the registers maintained by the Company. The stock of refined gold and gold ornaments as seen from the stock register produced at the time of investigation substantially varied from the abstracts of the stock registers produced before this Court, where Om Prakash Khatri approached for anticipatory bail. The explanation offered for the anomalies was that some gold possessed by sales men were not accounted for. This clearly belies the veracity of the registers produced in the course of investigation. Further the specific statement in the reply was that the gold seized were purchased from 12 authorised bullion dealers in Mumbai. On examination of the records produced, the adjudicating authority found that the gold purchased from these parties were accounted in the stock register for standard gold, while the gold seized was seen to have been released from the stock register for refined gold. However there was no transfer of gold from the stock register for standard gold to that of refined gol....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of events. In other words, the learned Commissioner(Appeals) referring to the various registers, extracts, stock register of gold bullion, balance sheet, job work register etc. produced by the appellant, without discussing/analyzing the relevant entries by which the gold cut pieces weighing 4046.300 gms recovered from the possession of Mr. Ranjith is duly accounted for and the invoices that were raised before and after the transaction of gold seized as pointed out by the adjudicating authority. He has observed that the said records produced disproves the fact that the gold seized was locally procured and not smuggled. We are of the view that without analysing the documentary evidences by the learned Commissioner(Appeals) and merely making a sweeping statement that the cut pieces of gold seized from the possession of Shri Ranjith has been duly accounted in the books of accounts of the supplier M/s. Swarna Shilpi, Chennai and M/s. Sayam Jewellers cannot be sustained particularly when the GST practitioner has categorically stated and admitted to have fabricated the documents. The statement of Shri Jaison Baby dated 04.02.2020 cast a doubt on the records which reads as below:- ....