2017 (11) TMI 169 - AT - Customs

Smuggling - Gold Biscuits - main contention of the appellant is that the appellant purchased the gold legally from M/s Bhawana International under proper bills and paid VAT - authenticity of bills under dispute - Held that - On perusal of the retail invoices, dated 12.04.2014 and 14.04.2014, I find that the goods were sold under the description of gold bars . They have paid output VAT of 1% on the selling price. The company s VAT TIN and PAN have been mentioned. The investigating officers had shown the photographs of the seized gold. There is no material available on record to show that the retail invoices placed by the appellant are false or fabricated. Apparently, the retail invoices are VAT paid and the VAT registration number and PAN were mentioned. It is noted that the said officers had merely recorded the statement of the proprietor of M/s.Bhawana International and no attempt was made to confront the evidence namely retail invoices of M/s.Bhawana International produced by the appellant. Therefore, the purchase documents as produced by the appellants cannot be discarded on the basis of the statement, without any verification of the content of the retail invoices. The appellant produced the retail invoices of M/s.Bhawana International and there is no material available on record that the said invoices are not genuine - appeal allowed - decided in favor of appellant.

Issues:
1. Confiscation of gold and imposition of penalty under Customs Act, 1962.
2. Authenticity of purchase of gold and VAT payment.
3. Investigation procedures under Customs Act, 1962.
4. Verification of purchase documents and confrontation of evidence.
5. Reliance on confessional statements and need for detailed investigation.
6. Corroboration of evidence and stock register verification.
7. Interpretation of judicial precedents and applicability to the case.

Analysis:
1. The case involved the confiscation of gold biscuits and imposition of penalties under section 112(b) of the Customs Act, 1962. The appellant claimed to have legally purchased the gold from M/s Bhawana International with proper bills and VAT payment. The Customs authorities confiscated the goods without proper examination of facts, leading to an appeal against the penalty.

2. The appellant's counsel argued that the purchase of gold was legitimate, supported by retail invoices showing VAT details and PAN. The appellant also presented a stock register as evidence. However, the Revenue authorities relied on statements and did not verify the authenticity of the purchase documents, leading to a dispute over the legality of the gold acquisition.

3. The Tribunal highlighted the importance of thorough investigation under the Customs Act, citing various provisions such as power to search premises, examine persons, and seize goods. It noted the need for cross-checking information and corroborative evidence to ensure accuracy, emphasizing the significance of proper verification in such cases.

4. The Tribunal observed that the investigating officers did not adequately verify the retail invoices produced by the appellant, solely relying on statements recorded during the investigation. It emphasized the necessity of confronting evidence and conducting a detailed examination before discarding purchase documents based on statements without verification.

5. Referring to a judicial precedent, the Tribunal stressed the importance of not solely relying on confessional statements without conducting a comprehensive investigation. It highlighted the need for a detailed inquiry into all aspects of the case, including the authenticity of documents and the conduct of the investigating officers.

6. The Tribunal considered the appellant's production of a stock register as supporting evidence and emphasized the importance of verifying records and documents from the seller to corroborate the appellant's claims. It noted that the initial statement of the individual involved in the incident was retracted, indicating the need for a thorough review of all evidence presented.

7. In analyzing a Supreme Court decision cited by the Revenue, the Tribunal found that the facts of the referenced case were not directly applicable to the present matter. It concluded that the appellant's production of genuine retail invoices supported their case, leading to the setting aside of the impugned order and allowing the appeals filed by the appellants.

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