TaxTMI 
TaxTMI 
2026 (7) TMI 474
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.... which was allowed to M/s Shokeen Jewellers for export of Gold jewellery amounting to Rs. 61,90,422/- have also been remanded back. The Appellant(s) are the following persons: - i) M/s Raj Jewellers, Prop : Mr. Ashok Kumar Verma, SDF No. D-70B, NSEZ, Noida, against confiscation of (a) 13.324 KG of Gold jewellery pursuant to interception at the Airport, (b) confiscation of 12.769 KG including Bullion seized from the factory premises of M/s Raj Jewellers, at Noida SEZ, (c) demand of Customs Duty Rs. 4,53,14,714/- under Section 28 along with interest under Section 28AA of the Customs Act with equal amount of penalty under Section 114A, (d) penalty of Rs. 3 crores under Section 114AA of the Customs Act. ii) Mr. Ajit Singh son of late Chandra Bhan, (a)penalty of Rs. 45 lakhs under Section 112 of the Act, (b)penalty of Rs. 45 lakhs under Section 114 of the Act, (c) penalty of Rs. 5 crores under Section 114AA of the Act. iii) Mr. Nishant Shokeen, son of Shri Ajit Singh and Director of M/s Shokeen Jewellers Private limited, (a) penalty of Rs.45 lakhs under Section 112, (b) penalty....
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....al, consumables and capital goods without payment of customs/excise duty, which are thereafter to be used in the manufacture of the final product (under Bond) and then are to be exported and thus, earning positive net foreign exchange. 2.2 Intelligence indicated that one such consignment of M/s Raj Jewellers was to be exported to Dubai on 30/05/2017 through IGI Airport. The said export consignment was to be received by the Proprietor Mr. Ashok Kumar Verma from the CWC warehouse situated at the IGI Airport (which was earlier booked vide Shipping Bill No.0008872 dated 28/05/2017 through CWC at Noida SEZ), and thereafter to be hand carried by Mr. Ashok Kumar Verma to UAE. Intelligence further indicated that Mr. Ashok Kumar Verma instead of carrying the export consignment after taking delivery from Customs, would divert/hand over the same to some other domestic passenger(s)- namely Mr. Ajit Singh travelling to Mumbai by Air India flight No. AI - 102, after getting endorsement of export on the export documents from the Customs at IGI Airport. 2.3 Accordingly, the Customs Officers/DRI called two witnesses to the Customs Preventive room situated in the departure hall of the Airport ....
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....king him that they have information that he has handed over a huge quantity of gold jewellery to Mr. Ajit Singh which was meant for export to Dubai, with the mala fide intention to divert the gold jewellery in the local market, and in view of the same his personal search and search of his handbag and trolley bag was required to be carried out. On examination of the black colour handbag, the personal belongings like clothes etc. were found. Further on search of the black colour Delsey trolley bag, only personal belongings like clothes, cigarette pack, towel etc., were found, but no gold jewellery was found in any of the 02 bags that were to be hand carried by Mr. Ashok Kumar Verma for export to Dubai. On personal search of Mr. Ashok Kumar Verma, the following articles were recovered - i) Shipping Bill No.0008872 dated 28/05/2017 for export of duty-free goods by M/s Raj Jewellers, NSEZ, Noida with an endorsement receipt dated 30/05/2017 by Mr. Ashok Kumar Verma declaring that he had received one sealed box containing gold jewellery covered under Invoice No. RJ/05/2017-18 dated 28/05/2017 from CWC warehouse, IGI Airport, New Delhi, ii) Export invoice cum packing list....
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....on the same day stating that the weight of the Gold jewellery is 13324 Grams and valued at Rs. 3,55,62,488/-. The jewellery was placed under seizure under Section 110 of the Customs Act, 1962. The aforementioned documents which were resumed from both the persons as well as the 02 identical black colour trolley bags - DELSEY brand belonging to Mr. Ajit Singh and Mr. Ashok Kumar Verma, were also seized under Section 110 ibid. 3. A copy of the passenger manifest in respect of Flight No. 6E-021 dated 30/05/2017 of Indigo Flight and a copy of the passenger manifest in respect of Flight No. AI-102 dated 30.05.2017 were also collected from the airlines. A copy of the packing list of the seized Gold jewellery was also resumed from the Customs Officer on duty. The seized jewellery and the 02 trolley bags were properly sealed by putting them in metal trunk and properly sealed with the DRI seal, in presence of witnesses. From the Panchnama drawn at IGI Airport dated 30/05/2017 and from the perusal of the export documents recovered from the possession of Mr. Ashok Kumar Verma, it appeared to the officers that the export consignment of Gold jewellery was to be hand carried by Mr. Ashok Kumar....
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.... hall where manufacturing of jewellery was in progress, it was observed that jewellery in finished and semi finished form and gold in other forms(cut pieces) was present. On being asked, Mr. Toofan Chandra Pradhan weighed the aforementioned Gold jewellery and Gold in various assorted form, and informed that the total weight of the same was 9732.20 grams. On enquiry by the officers Mr. Toofan Chandra Pradhan and Mr. Naresh Kumar Rana could not provide satisfactory reply about the remaining 09 kg Gold bullion imported against bill of entry dated 24.05.2017. The officers recovered and resumed the 03 KG Gold bars and the Gold jewellery and bits of Gold(work in process) weighing 9732.20 grams, totally weighing 12769 grams for further investigation/enquiry. The officers also resumed all the files/registers/documents and sealed them in presence of the witnesses. 3.3 On the same day that is 30/05/2017, another team of officers reached the office premises of M/s Shokeen Jewellers Pvt. Ltd, located at 2127-28/58, 3rd Floor, Naiwala, Gurudwara Road, Karol Bagh, New Delhi-110005. The said building was an SCO or commercial building wherein one Mr. Vikas Sharma director of M/s Bling Fashion P....
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....emises of Raj Jewellers -NSEZ. e) Mr. Nishant Shokeen on 19/07/2017 at the DRI office. f) Mr. Ajay Dubey, part-time employee of M/s Raj Jewellers on 25/10/2017 DRI office. 4. The allegations in the SCN are that though Mr. Ashok Kumar Verma is the proprietor of M/s Raj Jewellers - NSEZ, but actually the affairs are managed and looked after by Mr. Ajit Singh assisted by Mr. Nishant Shokeen, whereas the day-to-day affairs were being looked after by Mr. Naresh Kumar Rana, the Manager. M/s Raj Jewellers were engaged in importing duty-free Gold on free of cost basis and after manufacturing, jewelleries were required to be exported back to the sender/dealer at Dubai. But instead of sending back the Gold jewellery, they have indulged in diverging the Gold jewellery after filing of the shipping bill and issue of Let export order. Mr. Ajit Singh in connivance with Mr. Ashok Kumar Verma following the modus operandi of exchanging of bags in the international departure lounge of IGI Airport, T3. Mr. Ajit Singh after receiving the bag of jewellery from Mr. Ashok Kumar Verma used to fly to Mumbai and Mr. Ashok Kumar Verma used to fly to Dubai only with the export documents wi....
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....ellants had also reserved the right to file their final reply to the SCN after cross-examination. The Appellants had also prayed for passing of a reasoned order if the Adjudicating Authority intended to deny such opportunity of cross examination, so that the Appellants may pursue the remedy available to them. However, no specific order was passed on the request for allowing cross-examination of the persons whose statements had been relied upon for making allegations in the SCNs. The date of hearing was fixed by the learned Commissioner on 19-2-2019, on which date the learned Commissioner was absent and/ or not available in his office. Written request was filed reiterating the request for cross-examination and to fix another date for hearing. 4.4 The next date of hearing was fixed on 18/08/2020 (Covid19 period.) before the new incumbent in the office of the learned Commissioner. As the Appellants were suffering with Covid-19 and had been advised bed rest, they sent written request dated 12/08/2020 praying for fixing of another date. However, the Appellants were marked absent. As the Appellants did not receive any communication from the office of learned Commissioner, they had aga....
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....mar Verma to the same Preventive Room stated to be carrying one identical bag and another bag. This aforementioned sequence clearly establishes that the punch witnesses did not witness the actual interception, movement or alleged exchange of baggage and were only made to witness a staged recovery inside the Preventive room. This completely defeats the very purpose of having independent Panch witness and renders the Panchnama a defective document prepared to suit the Department's version, lacking any evidentiary value or sanctity. ⮚ It is further submitted that the very foundation of the Panchnama, in the alleged exchange of baggage at the Airport, is inherently improbable and contrary to the actual Airport procedures. As brought on record in the appeal Mr. Ajit Singh was travelling on a domestic flight, whereas Mr. Ashok Kumar Verma was travelling on an international flight. After security check, passengers of domestic and international flights are segregated in different zones with no inter-access. Therefore, the allegation that both persons met after security check and had exchanged bags is factually impossible and renders the entire Panchnama doubtful. &....
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..... Toofan Chandra Pradhan, the Head Karigar, suffers from glaring contradictions thereby rendering the statements unreliable. In his statement dated 31/05/2017, he has stated that Mr. Ashok Kumar Verma had given him a contract for manufacturing of gold jewellery. However, in a subsequent statement dated 12/06/2017, he has categorically stated that Mr. Ashok Kumar Verma never gave him any directions relating to his work. Such contradictory statement goes to the root of the matter and clearly demonstrates that the statements are inconsistent and unreliable. When the Department's own witness is not consistent on material aspects, no reliance can be placed on such statements to draw adverse conclusion against the Appellants. This further reinforces the contention of the Appellants that the statements recorded during investigation lack credibility and cannot be made the sole basis for sustaining the impugned order. It is settled law that allegations cannot be solely based upon statements. Reliance is placed on the ruling in Vikram Cement Private Limited vs. Commissioner of Central Excise, 2012 SCC OnLine CESTAT 3557 (para 9 to 13). ⮚ Further the retraction is made while i....
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....s and thereafter, opportunity to cross-examine should be given to the noticees or accused persons. For making the statement relevant for the purpose of proving the allegations against the Appellants, the provisions of Section138B of the Customs Act (which is pari materia to Section 9D of the Central Excise Act, 1944) have to be followed. Unless the procedure prescribed in Section 138B of the Act is followed for making the statement relevant, the same cannot be relied upon. ⮚ From the provisions of Section138B it is relevant and evident that the statement recorded before any Gazetted Customs Officer shall be relevant only in the conditions specified therein i.e. when the person who has made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable, and when the person who made the statement is 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 admi....
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.... foreign buyers, save and except limited to the specifically identified consignment. Apart from the above, several other communications from foreign buyers already enclosed in the appeal paper book, further corroborate the fact that the export obligations were duly fulfilled. It is common sense that no person or business entity will keep sending further consignments of gold without receiving gold jewellery in exchange of the earlier consignments. Further, it is a matter of record and admitted fact that the concerned buyers/suppliers of gold situated at Dubai have not made any complaint to the Government of India or the Department of Customs. Thus the generalized reliance on the letter of the consulate at Dubai to allege that every time gold was diverted is factually vague and incorrect and contrary to documentary evidence and confirmation issued by the foreign counterparties themselves. Further, in view of the said letter dated 02/01/2018, being vague, nonspecific and neither supported by any corroborative evidence or material, cannot be relied upon to sustain the allegation of diversion, and is liable to be disregarded. ⮚ So far the allegation of non-receipt of jew....
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.... 5. In view of the aforementioned submissions the Appellants prayed for allowing the appeals and setting aside the impugned order with consequential benefits including return of the gold and gold jewellery confiscated. 6. The learned Authorized Representative for Revenue have relied on the findings in the impugned order and the allegations made in the SCN. 7. Having considered the rival submissions of both the parties and upon perusal of the records and the written submissions we find that the whole case of the Revenue have been made on the basis of statements which are not reliable. The key statements of Mr. Ashok Kumar Verma and Mr. Ajit Singh have been retracted by them while in judicial custody at the 1st available opportunity. Such retractions have neither been rebutted by the Revenue, nor such persons were summoned for recording of further statements. Neither they were examined in Adjudication proceedings. Further, there is no corroborative evidence in support of the statement of these persons. So far the allegation made out on the basis of Panchnama/recovery proceedings drawn at the Airport on 30-31/05/2017, we find that the Panchnama is not reliable piece of evidence ....