2021 (3) TMI 1205 - AT - Customs

Reduction in quantum of redemption fine and penalty - Smuggling - Gold Bar - Revenue entertained a doubt that the appellant had improperly imported gold into India - HELD THAT - It is interesting to note that there is no explanation on the cut pieces of 100 gms foreign marked gold bar with the marking Cambi, Suisse 100 gm Gold 999.9 ending with last five digits of Sl.No. 09053 that was retrieved from Ryobi brand 6 Orbittal Buffer car cleaning machine. There is also no rebuttal on maintaining a secret chamber and a hot furnace inside nor has he disputed the availability of dismantled power tools of buffer car cleaning machine, etc. More interestingly, the appellant has nowhere claimed, rather has not even admitted that he is an authorised/license holder/goldsmith to carry out the job of melting gold pieces and convert to gold items of his so called customers. After having mentioned that the gold pieces were given by his customers, he has nowhere even offered to furnish the details of such customers to whom the seized gold including the one cut piece with marking Cambi, Suisee 100 gm Gold 999.9 belonged. The cumulative effect of the observations is that the initial burden cast on the appellant in terms of Section 123 ibid has not been discharged and therefore Revenue's action is justified. Strangely, the non-filing of appeal against rejection of absolute confiscation by Commissioner (Appeals) is questionable especially when an order authorising appeal against Order-in-Original granting redemption was made. Further, the Revenue has happily accepted the Commissioner (Appeals) order whereby the substantial reduction is ordered, both in terms of redemption fine as well as penalty, hence Commissioner (Appeals) order has to be upheld. Appeal dismissed.

Summary

Issues:
1. Challenge to the First Appellate Authority's Order reducing redemption fine and penalty.
2. Seizure of gold during search operation and subsequent legal proceedings.
3. Confiscation of gold, redemption, and penalty imposed.
4. Dispute over the Commissioner (Appeals) order reducing redemption fine and penalty.

Issue 1: Challenge to the First Appellate Authority's Order reducing redemption fine and penalty

The appellant challenged the First Appellate Authority's Order, which reduced the redemption fine and penalty imposed. The appellant rented a place for running a lathe business involving smelting and melting gold. A search on 12.12.2018 led to the seizure of various gold items, including a 100-gram foreign marked gold bar. The appellant retracted his statement the next day, leading to legal proceedings. The Commissioner (Appeals) partially allowed the appellant's appeal, reducing the redemption fine and penalty substantially.

Issue 2: Seizure of gold during search operation and subsequent legal proceedings

During the search operation on 12.12.2018, gold items were seized from the appellant's premises, including dismantled power tools with hidden gold pieces. The appellant's explanation regarding melting gold for customers was not fully substantiated. The appellant failed to provide details of the customers or clarify the presence of a secret chamber and a hot furnace. The Revenue's action was based on Section 123 of the Customs Act, requiring the appellant to disprove the suspicion of smuggling, which was not adequately done.

Issue 3: Confiscation of gold, redemption, and penalty imposed

The Assistant Director issued a Show Cause Notice (SCN) alleging improper importation of gold by the appellant. The adjudication order proposed confiscation but allowed redemption on payment of a fine. The appellant appealed against the confiscation, redemption, and penalty imposed. The Revenue also appealed, questioning the order allowing redemption instead of absolute confiscation. The Commissioner (Appeals) dismissed the Revenue's appeal but reduced the redemption fine and penalty for the appellant.

Issue 4: Dispute over the Commissioner (Appeals) order reducing redemption fine and penalty

In the current appeal, the appellant argued for the deletion of the redemption fine and penalty based on specific paragraphs in the Commissioner (Appeals) order. The Revenue supported the lower authorities' findings. The Tribunal considered the appellant's failure to discharge the initial burden of disproving smuggling suspicions and the lack of substantial rebuttal against the allegations. The Tribunal upheld the Commissioner (Appeals) order, dismissing the appeal due to the appellant's failure to meet the burden of proof.

This detailed analysis covers the key issues involved in the legal judgment, outlining the events leading to the appeal and the Tribunal's decision based on the arguments presented and legal provisions applied.