TaxTMI 
TaxTMI 
2026 (8) TMI 1619
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.... melting in their shop at the above address, in order to convert gold brought in raw or any form, by melting/refining gold of 24 Karat purity and for the said job, he charges certain amount as commission. He has taken over this business from his father after initially joining him in 2021 and presently he is looking after the entire business in the shop, with the assistance of Shri Prajyot Patil, Manager and Shri Pravin Dhaokale, Helper and Teaser. 2.2 Directorate of Revenue Intelligence (DRI) had developed specific intelligence that a syndicate is actively involved in smuggling of gold into India from Nepal by bringing the smuggled gold illegally into the country by various routes; and the same is brought to Mumbai from Patna by several carriers for monetary consideration. Furthermore, specific intelligence was also gathered by DRI that few identified passengers viz., Shri Musab Hassan Elmahi Elhassan, permanent resident of Sudan holding Passport No. P04829419; Shri Musab Mahmoud Sayed Nory, permanent resident of Sudan holding Passport No. P07178886; and Mrs. Ehsan Ali Adam Mohamed, permanent resident of Sudan holding Passport No. P08843979 are carrying the smuggled gold in thei....
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....ted 20.02.2023 and the inventory of 24CT purity gold along with its packages being liable for confiscation under Section 111 of the Customs Act, 1962 was seized vide Seizure Memo dated 20.02.2023 (DIN-202302 DDZ90000515031). 2.4 Upon further enquiry with the said passengers it was revealed that such smuggled gold in paste form is to be delivered to one person named Shri Saif Sayeed Khan at Colaba, Mumbai operating foreign exchange business in the name of M/s Al-Amin Forex Services Private Limited situated at N.F. Road, Near Leopold Café', Colaba, Mumbai. The said premises was also searched under panchanama proceedings dated 20.02.2023, and it was found that Shri Saif Sayeed Khan along with his brother Shri Shamsher Sayeed Khan had been operating from the aforesaid premises; they had no license to operate foreign exchange services presently, as their license expired in November, 2022, but they continued to undertake such business. Thus, the unaccounted currency kept inside one of the drawers was seized vide Seizure Memo dated 20.02.2023 (DIN-202302DDZ9000000C59D). During the time of such proceedings, one another person Mrs. Ehsan Ali Adam Mohamed, resident of Sudan having ....
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....r the possession of such gold and as he was not having any valid documents for possession of gold, foreign currency & Indian currency and was also not having any valid license, DRI had a reasonable belief that these were smuggled gold, illegally held foreign currencies and the Indian currency were sale proceedings of smuggled gold being liable for confiscation under Section 111 of the Customs Act, 1962 along with its packages and the same were seized vide Seizure Memo dated 20.02.2023 (DIN 202302 DDZ9000000AAF7). 2.5 Further, it was also gathered by DRI that Shri Shamsher Sayeed Khan used to deliver such smuggled gold to a person in Zaveri Bazaar who runs a shop by the name of 'Manish Gold' at the address 275-B, Mumba Devi Road, Near Mumba Devi Temple. During search of the said premises, Shri Manish Jain and Shri Prakash Ratanchand Jain, owners of the said premises were available; Shri Manish Jain admitted that he used to procure smuggled gold from various African nationals and get the same melted by sending it to the melting facilities at Room No.3B, Building No.30/32, New Satta Galli, Kavi Nirav Lane, Mumba Devi, Mumbai and at Room No.3, SNK Plaza Building Khau Galli, Kavi Nir....
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....ent resident of Sudan holding Passport No. P07178886; (iii) & (iv) Shri Saif Sayeed Khan and his brother Shri Shamsher Sayeed Khan of M/s Al-Amin Forex Services Private Limited; (v) Shri Manish Prakash Jain of M/s Manish Gold (vi) Shri Vishwajit Deshmukh of M/s J D Bullion (vii) Shri Ali Abdelgafar Ali Mala, holder of Sudan passport P05651182; (viii) Mrs. Ehsan Ali Adam Mohamed, permanent resident of Sudan holding Passport No. P078843979 and (ix) Shri Salah Mohammed aka Ahmed, resident of Khartoum, Sudan who is the mastermind and main supplier of foreign origin gold for smuggling through Dubai-Nepal-India route. 2.7 During adjudication proceedings of the said SCN dated 08.02.2024 conducted by the learned Additional Commissioner of Customs (Preventive), Rummaging and Intelligence Division, New Custom House, Mumbai as original adjudicating authority; out of nine noticees, only four noticees viz., Shri Saif Sayeed Khan, Shri Shamsher Sayeed Khan, both of M/s Al-Amin Forex Services Private Limited; Shri Manish Prakash Jain of M/s Manish Gold and Shri Vishwajit Deshmukh of M/s J D Bullion had given their reply to the SCN and ap....
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....e entire proceedings. He further stated that indiscriminate seizure of the goods by DRI indicates that there was no 'reasonable belief' for such seizure; since it was town seizure of goods, wherein purity of certain amount of Gold was less than 24KT, and the appellant is indulged in refining of Gold and he has explained the source of Gold, the provisions of Section 123 of the Customs Act, 1962 would not apply. Further, he also stated that there is no "foreign markings" in the gold seized from the appellant and thus he claimed that it has no link with smuggling of gold seized from passengers who alighted at Lokmanya Tilak Terminus Railway Station, and even for this there is no direct link that such gold was smuggled through Nepal. Furthermore, he stated that once the documentary evidence regarding bona fide possession is submitted, the onus to disprove the assertion against the appellant for the goods being smuggled lies upon with the Department. Thus, he claimed that the order of the original authority for confiscation of the goods and upholding the same in the impugned order is not sustainable. 3.3 Learned Counsel also stated that reliance placed by the original authority on Ci....
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.... (vii) Commissioner of Customs (Prev), Kolkata Vs Ashok Kumar Agarwal [2017 (348) ELT 555 (Tri-Kol)] (viii) UOI Vs Imtiaz Iqbal Pothiawala [2019 (365) ELT 167 (Bom)] (ix) Gourav Jain Vs Commissioner of Customs, Indore [Order dated 06.02.2026 in Customs Appeal No. 50647 of 2024 (Tri-Del)] (x) Andaman Timber Industries Vs Commissioner of Customs, KolkataIII [2015 (324) E.L.T. 641 (S.C.)] 4. Learned Authorised Representative (AR) reiterated the findings made by the Commissioner of Customs (Appeals) in the impugned order and submitted that issue of confiscation of impugned goods and the liability to penal consequences, has been examined in detail by the learned adjudicating authority and the learned Commissioner (Appeals). Hence, the appeal filed by the appellant is not sustainable. 5. We have heard both sides and perused the case records and additional paper books submitted in the form of synopsis and case law compilation filed in this case. 6. The issues involved in the present appeal for a decision before the Tribunal are as follows: (i) Whether confiscation of gold having net weight of 3723.650 grams, valued at Rs. 2,12,85,535/- seized f....
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....son any goods of the description specified in sub-section (2) which are liable to confiscation, or documents relating thereto, he may search that person. (2) The goods referred to in sub-section (1) are the following :- (a) gold; (b) diamonds; (c) manufactures of gold or diamonds; (d) watches; (e) any other class of goods which the Central Government may, by notification in the Official Gazette, specify. Section 105. Power to search premises. (1) If the Assistant Commissioner of Customs or Deputy Commissioner of Customs, or in any area adjoining the land frontier or the coast of India an officer of customs specially empowered by name in this behalf by the Board, has reason to believe that any goods liable to confiscation, or any documents or things which in his opinion will be useful for or relevant to any proceeding under this Act, are secreted in any place, he may authorise any officer of customs to search or may himself search for such goods, documents or things. xxx xxx xxx xxx Section 110. Seizure of goods, documents and things (1) If the proper officer has reason to believe that any g....
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....er. 2.01 Policy regarding import /Exports of goods (a) Exports and Imports shall be 'Free' except when regulated by way of 'Prohibition', 'Restriction' or 'Exclusive trading through State Trading Enterprises (STEs)' as laid down in Indian Trade Classification (Harmonized System) [ITC (HS)] of Exports and Imports. The list of 'Prohibited', 'Restricted', and STE items can be viewed under 'Regulatory Updates' at https://dgft.gov.in (b) Further, there are some items which are 'Free' for import/export, but subject to conditions stipulated in other Acts or in law for the time being in force. xxx xxx xxx xxx xxx xxx xxx xxx ITC(HS), 2022 Schedule 1 Import Policy Section XIV, NATURAL OR CULTURED PEARLS, PRECIOUS OR SEMI-PRECIOUS STONES, PRECIOUS METALS, METALS CLAD WITH PRECIOUS METAL AND ARTICLES THEREOF; IMITATION JEWELLERY; COIN Chapter 71 Natural Or Cultured Pearls, Precious Or Semi-Precious Stones, Precious Metals, Metals Clad With Precious Metal And Articles Thereof; Imitation Jewellery; Coin. Main Notes SI.No. Notes Notification No. Notification Date 01 Subject to Note 1 (a) to Section VI and except as provi....
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....ther Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies) 08/2025-26 19/05/2025 71082000 - Monetary Restricted 8.1 From plain reading of the above legal provisions, it transpires that the phrases 'smuggling' and 'prohibited goods' have been defined under the Act of 1962, to mean any act of violation with respect to goods brought into the country (India), from a placed outside India, which are itemised under Sections 111 ibid and similarly with respect to goods which are attempted to be taken out of India from the country, as itemized under Section 113 ibid; and prohibition imposed under the Act of 1962 or under the provisions of Foreign Trade (Development & Regulation) Act, 1992 or any other law for the time being in force, respectively. Further, it also transpires that in cases where an officer of customs has reason to believe that if any person has secreted about his person any goods; or if any goods liable to confiscation, or any documents or things are secreted in any place, then such person or the premises may be searched by the ....
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....smuggled gold were seized for further action by DRI on 20.02.2023. Further, such smuggled gold brought by various persons, who are involved in smuggling activity, were received by two noticees viz., Shri Saif Sayeed Khan and his brother Shri Shamsher Sayeed Khan of M/s Al-Amin Forex Services Private Limited, and upon search of their premises, DRI had also recovered unaccounted foreign currencies, gold in various forms without any supporting documents concealed in various bags, evidencing illicit nature of gold. On follow-up investigations with the gold melting facility for converting the smuggled gold into melted gold bars of 24KT/21KT with embossed emblem for certificate of quality of gold at the premises of two noticees viz., Shri Manish Prakash Jain of M/s Manish Gold and Shri Vishwajit Deshmukh of M/s J D Bullion, further gold was also recovered by DRI. The investigation conducted in respect of the activities under by other two noticees, one of whom i.e., Shri Salah Mohammed aka Ahmed, resident of Khartoum, Sudan, indicated that he had been working as master mind and main supplier of foreign origin gold for smuggling through Dubai-Nepal-India route and other one i.e., Shri Ali ....
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....dated 25.07.2024 have become final with respect to such noticees, inasmuch as there is no appeal preferred by them for having been aggrieved by such order. 9.1 Therefore, the disputed issues are required to be examined in the aforesaid context of the legal finality attained by the order dated 25.07.2024 with respect to such other noticees and the provisions of the Customs Act, 1962 and the relevant import policy prescribed under the ITC (HS) of the Foreign Trade Policy. 9.2 In the Order-in-Original dated 25.07.2024, the gold seized from the appellant was absolutely confiscated and penalty was imposed in the following terms: "56. In the view of the above, I pass the following order: ORDER (vi) I order absolute confiscation of gold having a net weight of 871.120 grams valued at Rs. 50,50,971/- as detailed in Table-12b (supra), which belonged to Mr. Manish and was sent to Vishwajit Deshmukh for melting, under Section 111(d) of the Customs Act, 1962 (vii) I order absolute confiscation of gold having a net weight of 831.060 grams valued at Rs. 44,29,180/- seized from premises of Mr. Vishwajit Deshmukh, as detailed in Table-12a (supra), under Section 1....
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....rson involved and its modus operandi" and, therefore, the argument of insufficient evidence of smuggling is not acceptable. 30. In view of the involvement of the Appellant with absolutely confiscated gold having net weight of 871.120 grams valued at valued at Rs. 50,50,971/- as detailed in Table-12(b) of the impugned order, gold having net weight of 831.060 grams valued at Rs.44,29,180/- as detailed in Table-12(a) of the impugned order, gold having net weight of 2021.470 grams valued at Rs.1,18,05,384/- as detailed in Table-12(c) of the impugned order and the conclusion of the Adjudicating Authority that a syndicate was working in the whole illegal trading; they all were organized, well connected, known to one another and working for undue monetary consideration; there is something more in common, they all did the nefarious business in 'Cash' and that smuggling of gold into India affects the public economy and financial stability of the economy., the imposition of penalty of Rs.25,00,000/- under Section 112 (a) and (b) ibid under the facts and circumstances of the case cannot be termed as disproportionate. 31. In view of the above discussion and findings, there is....
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....ther supported by the decision of the Principal Bench of this Tribunal in Customs Appeal No. 51986 of 2024; Bharat Shantilal Shah vs. Principal Commissioner of Customs (Preventive), decided vide Final Order No. 51837/2025, on 8.12.2025. The decision in the matter of Bharat Shantilal Shah (supra) was further relied upon recently by the Principal Bench of the Tribunal in Customs Appeal No. 50647 of 2024; Shri Gaurav Jain vs. The Commissioner of Customs, decided vide Final Order no. 50222/2026 on 6.2.2026. 10.4 We further find that in the case of Andaman Timber Industries (supra) which was relied upon by the appellant, it has been held by the Hon'ble Supreme Court, that when the testimony of witnesses is discredited, and when there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the show cause notice, the case of the department is not sustainable and the order passed by the Tribunal, in that case, for dismissing the appeal was set aside. 10.5 We find that in the present case, the findings of involvement of the appellant, and the consequent imposition of penalty up....