2017 (10) TMI 362 - AT - Customs

Absolute confiscation - Penalty - smuggling - Gold biscuits of foreign origin - case of Revenue is that the appellant Shri Abdul Khader is not able to justify the ownership of gold biscuits which was seized and absolutely confiscated has been purchased legally - whether the gold biscuits seized by the departmental authorities from P. Rasheed on 17.8.2001 is to be held as a smuggled goods or otherwise? - whether the ownership of the said gold biscuits as claimed by Shri Abdul Khader is correct or otherwise? - whether the appellant Shri Abdul Khader has proved beyond doubt that the biscuits that were procured were from legitimate source or otherwise? Held that - the Central Forensic Science Laboratory is not giving any specific opinion as to whether the copy of the bill produced by the appellant Shri Abdul Khader before the authorities claiming to have been purchased from M/s. Chamunda Enterprises seems to be inconclusive in view of the fact that the authorities had not sent the duplicate copy of the bill to the Forensic Laboratories. It is undisputed that the Customs Authorities had recovered various documents from the premises of M/s Chamunda Enterprises when they visited their premises. In the absence of any clear-cut opinion of the Central Forensic Science Laboratory as to the genuineness of the document and also due to non-production of duplicate copy of the invoices, the said opinion being inconclusive, needs to be considered as an evidence only to the effect that it is not proved beyond doubt that document produced by the appellant as a copy of the duplicate invoice of M/s. Chamunda Enterprises. In my view, this evidence not being conclusive, other corroborative evidences needs to be considered to come to any conclusion as to whether the goods are smuggled or otherwise. Now coming to the disregarding of evidences by M/s. Chamunda Enterprises, the first appellate authority has totally misconstrued these evidences. It is seen from the record that after the affidavit of Shri Ratan Singh Rathod, Proprietor of M/s. Chamunda Enterprises was produced before the authorities, the countering parts of the Customs Preventive Authorities, Mumbai visited the premises of M/s. Chamunda Enterprises on 26.9.2001 and it is recorded in the Panchanama of the same day that Shri Ratan Singh Rathod introduced himself and was personally present stating that he was the proprietor of the said firm. In his presence, the authorities searched the office room and certain documents as listed in the annexure to the Panchanama were retrieved. The provisions of Section 123 of the Customs Act, would apply to in this case. Though there is an exception carried in said Section in respect of the gold, Shri P. Rasheed, the person who was intercepted and from whom the gold was recovered; Shri Abdul Khader the person who claimed the ownership of the gold the very next day of the seizure of the gold from Shri P. Rasheed; and Shri Mahendra Rajawat who brokered the sale for Shri Abdul Khader and Shri Ratan Singh Rawat, Proprietor of M/s. Chamunda Enterprises, all these persons have stated categorically in the affidavit as well as in their statements that the gold biscuits which were intercepted and seized by the Revenue authorities were legitimately purchased by M/s. Chamunda Enterprises. As against such a clear evidence to indicate that the purchase of gold biscuits was inland source, there is nothing on record by the Revenue to hold that onus of proving the goods were procured from indigenous sources shifted to appellants. The appellants have discharged their onus of proving that the goods were procured legitimately by them from the inland sources which has to be accepted in the facts and circumstances of this case. Confiscation and penalties set aside - appeal allowed - decided in favor of appellant.

Issues Involved:
1. Whether the gold biscuits seized were smuggled goods.
2. Whether the ownership claim of the gold biscuits by Shri Abdul Khader was legitimate.
3. Whether the appellant proved beyond doubt that the gold biscuits were procured from a legitimate source.

Detailed Analysis:

Issue 1: Whether the gold biscuits seized were smuggled goods.
The primary issue was whether the gold biscuits seized from P. Rasheed on 17.8.2001 were smuggled goods. The Tribunal had earlier remanded the case to the lower authorities to verify the legitimacy of the bills produced by the appellant, Shri Abdul Khader, claiming the gold was procured from M/s. Chamunda Enterprises. The Forensic Science Laboratory's opinion was inconclusive as it did not definitively prove that the photocopy of the bill was a genuine replica of the duplicate copy seized by the department. The Tribunal noted that the Customs Authorities had failed to conduct a thorough investigation into the legitimacy of the gold procurement by M/s. Chamunda Enterprises. The absence of any incriminating documents from the premises of the appellants or M/s. Chamunda Enterprises further weakened the Revenue's case. The Tribunal concluded that the Revenue failed to prove beyond doubt that the gold biscuits were smuggled.

Issue 2: Whether the ownership claim of the gold biscuits by Shri Abdul Khader was legitimate.
Shri Abdul Khader claimed ownership of the gold biscuits, stating they were purchased from M/s. Chamunda Enterprises. The Tribunal observed that the statements of P. Rasheed, Abdul Khader, and Mahendra Rajawat were consistent and corroborated each other. The affidavit of Mahendra Rajawat confirmed that he brokered the sale of the gold biscuits to Abdul Khader and that the gold was legally imported and procured from a licensed dealer. The Tribunal found that these corroborative evidences indicated a genuine transaction of gold purchase by Abdul Khader. The Tribunal criticized the first appellate authority for disregarding these evidences and concluded that Abdul Khader's claim of ownership was legitimate.

Issue 3: Whether the appellant proved beyond doubt that the gold biscuits were procured from a legitimate source.
The Tribunal noted that the Customs authorities had recovered various documents from M/s. Chamunda Enterprises but failed to verify the legitimacy of the gold procurement. The affidavit from Ratan Singh Rathod, the proprietor of M/s. Chamunda Enterprises, stated that the gold biscuits were sold to Abdul Khader and were legally procured. The Tribunal emphasized that the investigating authorities did not conduct further investigations to disprove the legitimacy of the gold. The Tribunal held that the appellants had discharged their burden of proving that the gold was procured from legitimate sources. The Tribunal referred to previous rulings, such as the case of Sri Nanda Kishore Modi, to support their conclusion that the legitimacy of the gold could not be contested without concrete evidence.

Conclusion:
The Tribunal concluded that the impugned order was unsustainable. The gold biscuits were not proven to be smuggled, the ownership claim by Abdul Khader was legitimate, and the appellants had proven that the gold was procured from legitimate sources. The Tribunal set aside the confiscation and penalties imposed by the first appellate authority and allowed the appeal.

Judgment:
The appeal was allowed, and the order of confiscation and penalties was set aside. The Tribunal pronounced this order in open court on 10.08.2017.

← Previous Next →