TaxTMI 
TaxTMI 
2026 (9) TMI 900
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....ner (Appeals) set aside the Order-in-Original dt.31.03.2024 relating to confiscation of 2000.30 gm of gold under section 111(d) and 111(o), packing material under section 119 and imposed penalty of Rs.12,00,000/- upon the respondent under section 112(a) and 112(b) of the Customs Act, 1962. 2. The brief facts are that the dispute concerns 2000.30 gm of re-melted gold claimed by Shri Kandikatla Venkata Ramasubba Rao, Proprietor of M/s Jaimatha Mahalakshmi Jewellers. The respondent claimed that 2000.940 gm of gold had been purchased on credit from M/s Abhaya Gold Buyers Pvt Ltd, Bangalore, under tax invoice No.AGBPL/MAR/016 dt.17.03.2023. The gold was stated to have been sent to Chennai for conversion into ornaments and was seized while bei....
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....ar away from any customs frontier. The intercepted persons promptly retracted their statements and the owner claimed the gold and produced tax invoice. The supplier confirmed the credit sale and the payments were subsequently made through normal banking channels. 6. It has been further submitted that contemporaneous FASTag records conclusively contradicted the places and timings mentioned in the Panchanama. The Panchanama and the initial statements were prepared on a stereo-typed, pre-typed formats and the request to cross-examine the Panch witnesses and other material witnesses were rejected. Therefore, according to the respondent, neither the initial burden of proving smuggled character was discharged by the department nor could the re....
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....ts alleged importation. Purity of gold, by itself, does not establish foreign-origin or smuggled character. 11. The evidentiary foundation of the departmental case is further weakened by material discrepancies in the seizure proceeding. FASTag data relied upon by the respondent records actual movement of the vehicle and is contemporaneous electronic evidence. The recorded crossings of the toll plaza are materially inconsistent with the time and place of interception and the alleged completion of proceedings mentioned in the Panchanama. The FASTag entries indicate that the vehicle crossed Tanguturu toll plaza only at about 01:22 hrs on 21.03.2023, whereas, the Panchanama mentioned its interception at about 18:20 hrs on the preceding day a....
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....ki Vs UOI [2009 (233) ELT 157 (SC)], the Hon'ble Supreme Court emphasized that a retracted confession must be tested in the light of attending circumstances and corroborative evidences. The principle in Naresh J. Sukhawani Vs UOI (supra), does not dispense with scrutiny of the voluntariness and reliability of a statement, nor does it make every retracted statement conclusive irrespective of surrounding evidence. In the facts before us, the statements do not receive sufficient independent corroboration to sustain absolute confiscation and substantial penalty. 14. The respondent claimed ownership shortly after the seizure and produced tax invoice predating them. Invoice No. AGBPL/MAR/016 dt.17.03.2023 covered 2000.940 gm of gold purchased ....
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....eparation and accuracy. In such circumstance, cross-examination of the persons whose statements were used and of the Panch witnesses assumed significance. If a statement is intended to be treated as substantive evidence against a noticee, the safeguard embodied in section 138B of the Customs Act cannot ordinarily be bypassed. The Hon'ble Supreme Court in the case of Andaman Timber Industries Vs CCE, Kolkata [2015 (324) ELT 641 (SC)] held that denial of cross-examination of witnesses whose statements are relied upon amounts to serious violation of natural justice. The relevant paras are reproduced below: "6. According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements ....
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....nt 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." 18. In the present matter, denial of the requested cross-examination, coupled with unexplained contradictions in the Panchanama and the absence of independent evidence of the foreign-origin, materially prejudice the respondent. 19. We further find that section 111(d) could apply only when goods are imported or attempted to be imported contrary to a prohibition imposed by law. The foundational fact of illicit importation has not been established here. Section 111(o) concerns non-observance of a condition subject to which exemption from duty or prohibition was granted in respect of i....