2021 (8) TMI 1168 - AT - Customs

Absolute Confiscation - Smuggling - Gold Bars - 8 kgs Gold not claimed by anyone - 100 gms Gold recovered from Shri Ajesh A. Patel, Proprietor of M/s Patidar Bullion - levy of penalty u/s 112(b) of Customs Act, 1962 - HELD THAT - Penalty on both the Appellants was imposed under Section112(b) of Customs Act, 1962 which provides for imposition of penalty on any person who acquires possession or is concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation u/s 111 of the Customs Act 1962 - In the present case, the investigating DRI officers have booked two different type of cases investigated and covered in a Show Cause Notice and it being a common SCN, adjudicating authority has passed single Order-In-Original covering these two cases. Revenue has not proved smuggling of Gold into India. Hence, for imposing penalty u/s 112(b) ibid mens rea is necessary which is not coming out from records against the Appellant shri Jitendra Soni. Settled principle of law Suspicion, however strong it may be, it can not replace the facts needs to be applied in this case. Evidences on record are not sufficient to impose penalty on him. Suspicion in this case by Revenue has tried to replace the proof and this has resulted in an erroneous order passed by Adjudicating Authority against Appellant. Circumstantial evidence only is relied upon, unless it is conclusive on the fact of smuggling and Appellant dealt with smuggled goods knowingly, such circumstantial evidences cannot be taken to be the proof of the fact of smuggling for imposing penalty. If revenue wants that gold dealers of foreign marked gold in India should indicate the brand names with respect to each brand then foreign marked gold should have been declared as one of items under Chapter IVA of Customs Act, 1962 - This issue is settled (as revenue has not filed any appeal against above judgments). Thus, there is no requirement under prevailing law to mention brand or marks or numbers of foreign marked gold on sale/purchase documents. Hence, confiscation ordered deserves to be set aside in this case. Confiscation of 100 gms Gold recovered from Shri Ajesh A. Patel, Proprietor of M/s Patidar Bullion - HELD THAT - Appellant has substantiated that the seized 100 gms gold was out of his stock inventory of legally purchased Gold. Appellant discharged burden of proof u/s 123 of Customs Act 1962 by maintaining normal business daily account with relevant documents of purchase/sale showing Opening Balance Receipt issue closing stock, while dealing in Gold/silver purchased and sold in open market on large scale in market. Thus, confiscation of 100 gms Gold is not sustainable in facts of this case and deserves to be set aside. Appeal allowed in part.

Summary

Issues Involved:
1. Confiscation of 8 kgs of gold and penalty imposed on the appellants.
2. Confiscation of 100 grams of gold from Ajesh Patel's business premises and the penalty imposed on him.

Issue-wise Detailed Analysis:

1. Confiscation of 8 kgs of Gold and Penalty Imposed on the Appellants:

The Revenue's case is based on the interception and seizure of 8 kgs of gold from a car, with no legal import documents provided by the individuals in possession. The gold was confiscated under the Customs Act, 1962, and penalties were imposed on several individuals, including Jitendra Bhanuprasad Soni, who was alleged to have supplied the gold. The appellant argued that the penalty was imposed without hearing him, and there was no evidence of mens rea or conscious knowledge that the gold was smuggled. The tribunal found that the DRI's investigation did not provide conclusive evidence that the seized gold was smuggled. The statements and circumstantial evidence were insufficient to establish mens rea, which is necessary for imposing a penalty under Section 112(b) of the Customs Act, 1962. Therefore, the penalty on Jitendra Bhanuprasad Soni was set aside.

2. Confiscation of 100 grams of Gold from Ajesh Patel's Business Premises and the Penalty Imposed on Him:

Ajesh Patel argued that the 100 grams of gold seized from his business premises were part of his legally procured trading stock. He provided stock registers and invoices to support his claim. The tribunal found that the DRI did not provide evidence that the seized gold was smuggled. The gold was part of normal trading stock, and the appellant had maintained proper records. The tribunal noted that there is no legal requirement to mention brand or serial numbers of gold in purchase documents, and the burden of proof under Section 123 of the Customs Act, 1962, was discharged by the appellant. Therefore, the confiscation of 100 grams of gold and the penalty imposed on Ajesh Patel were set aside.

Conclusion:

The tribunal modified the impugned Order-In-Original to sustain the absolute confiscation of 8 kgs of gold not claimed by anyone, set aside the confiscation of 100 grams of gold from Ajesh Patel, and set aside the penalties imposed on Jitendra Bhanuprasad Soni and Ajesh Patel. The remaining part of the order not objected to in the appeal was not interfered with. The appeals filed by Jitendra Bhanuprasad Soni and Ajesh Patel were allowed with consequential reliefs in accordance with the law.