2020 (3) TMI 926 - AT - Customs

Smuggling - Gold - discharge of onus under Section 123 of the Customs Act - HELD THAT - The appellant, Mr. Dinesh Bansal, who was in possession of the 59 gold bars, from the very time of interception and seizure, in his statement recorded under Section 108, soon thereafter, he has stated that he has purchased the gold bars from M/s.Lawat Jewellers Pvt. Ltd., Jaipur on the same day. This fact has been corroborated by Shri Suresh Soni, Managing Director of M/s.Lawat Jewellers Pvt. Ltd., recorded on the very next day i.e. 11.09.2002 before S.I.O., DRI, wherein he affirmed having sold the 59 gold bars in question to the appellant, Shri Dinesh Bansal also produced the invoices. He also stated that the gold bars were delivered by their employee, Shri Parmeshwar in the premises of the bank itself (when M/s. Lawat Jewellers took delivery of 150 gold bars from the Corporation Bank, Jaipur at about 1.15 p.m.) on 10.09.2002. Sofar, the issue of sale invoices in the name of Shri Pradeep Kumar (brother of Shri Deepak Bansal), cogent explanation was given by M/s. Lawat Jewelers, as they did not know the proper name of Shri Deepak Bansal and they only knew his nick name Vicky , they issued invoice in the name of his brother, who was also purchasing gold from them and the two brothers were operating their business from common premises at Kucha Mahajani, Chandani Chowk, Delhi. The driver of the Tata Sumo Vehicle has also corroborated the version of Deepak Bansal of purchase of gold bars from Jaipur. So far further investigation done by the Department resulted into the receipt of purported letter dated 10.12.2002 by fax from CSFB, Zurich by Corporation Bank, Mumbai. We find that this letter on the one side states that the CSFB has been supplying South African Origin gold from Rand Refinery and Harmony Refinery and thereafter, have vaguely stated that CSFB did not have stock of South African gold from July, 2002 and has supplied Credit SUISSE brand gold from their own mint in Switzerland. This letter only creates a presumption, but is not conclusiveit is evidently clear that the subsequent change of the statement of the bank officers is under undue influence exerted by the Revenue Officers. Further, the said letter dated 10.12.2002 issued by CSFB through fax, is not a reliable piece of evidence, as it does disclose the context under which it is issued. Further, the person issuing the said letter on behalf of the CSFB has not been examined nor the authenticity of the fax message is established, under known process of law. The appellant, Shri Deepak Bansal has proved the source of acquisition and also the source of the source of acquisition. However, the mandate of Section under Section 123 (2) of the Customs Act requires a person in the possession of gold bars, having foreign markings, to only prima facie establish the proof of licit acquisition, and is not require to prove source of source - Also, Revenue has not been able to establish its allegation that the seized gold is different from the gold delivered by the Corporation Bank on 10.09.2002 to M/s. Lawat Jewelers. Appeal allowed - decided in favor of appellant.

Issues Involved:
1. Legitimacy of the seizure and confiscation of 59 gold bars.
2. Justification of penalties imposed under Section 112(a) & (b) of the Customs Act.
3. Verification of the origin and legal procurement of the gold bars.
4. Examination of the evidence and statements provided by the appellants and the officials.

Detailed Analysis:

1. Legitimacy of the seizure and confiscation of 59 gold bars:

The primary issue in these appeals was whether the 59 gold bars seized from the appellant were properly explained under Section 123 of the Customs Act. The Directorate of Revenue Intelligence (DRI) intercepted a vehicle near the Delhi-Haryana border and recovered 59 gold bars marked "HARMONY, SOUTH AFRICA, 10 TOLAS, 999, FINE GOLD" from it. The gold bars were seized along with the vehicle as the appellant failed to produce any documentary evidence at the time of interception. The appellant later claimed that the gold was purchased from M/s. Lawat Jewellers Pvt. Ltd., Jaipur.

2. Justification of penalties imposed under Section 112(a) & (b) of the Customs Act:

Penalties were imposed on Shri Dinesh Bansal, Mr. Suresh Soni (Managing Director of Lawat Jewellers Pvt. Ltd.), and Lawat Jewellers Pvt. Ltd. under Section 112(a) & (b) of the Customs Act. The Order-in-Original No. 3/Commr/06 dated 28.04.2006 confirmed the confiscation of the gold bars and the vehicle, and imposed penalties. The Tribunal examined whether the penalties were justified based on the evidence and statements provided.

3. Verification of the origin and legal procurement of the gold bars:

The appellant claimed that the gold bars were purchased from Lawat Jewellers, who in turn procured them from Corporation Bank, Jaipur. The Managing Director of Lawat Jewellers confirmed the sale and provided sale vouchers and delivery orders from Corporation Bank. However, the DRI's investigation revealed inconsistencies regarding the origin of the gold bars, particularly whether Corporation Bank had Harmony brand gold bars in stock on the date of the alleged transaction.

4. Examination of the evidence and statements provided by the appellants and the officials:

The Tribunal reviewed statements from various individuals including the driver of the vehicle, the appellant, officials from Lawat Jewellers, and employees of Corporation Bank. The statements indicated that Lawat Jewellers had purchased gold bars from Corporation Bank on 10.09.2002 and delivered 59 bars to the appellant. The bank officials confirmed the sale but later stated that they did not have Harmony brand gold bars in stock during the relevant period. The Tribunal found inconsistencies in the statements of the bank officials, suggesting undue influence by the investigating officers.

Conclusion:

The Tribunal concluded that the appellant, Shri Dinesh Bansal, had sufficiently demonstrated the legal procurement of the gold bars from Lawat Jewellers, who had purchased them from Corporation Bank. The Tribunal found that the Revenue had not conclusively proven that the seized gold was different from the gold delivered by Corporation Bank. Thus, the appeals were allowed, the confiscation orders were set aside, and the appellants were entitled to the return of the seized gold and vehicle. The penalties imposed under Section 112(a) & (b) of the Customs Act were also overturned.

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