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2022 (4) TMI 84 - AT - CustomsSmuggling - foreign marking Gold Bars - failure to to show the source of procurement of the gold by licit means - notified item - Section 123 of the Customs Act, 1962 - Absolute Confiscation - whether at this stage, the seized gold can be released provisionally to the appellant or not? - HELD THAT - After due investigation, it was concluded in the show cause notice that Sh. Mayank Agarwal (the appellant) is the mastermind behind the smuggling activity of foreign origin gold along with his associates who (the appellant) has claimed the ownership of the gold in question. Further it is noted that during the course of investigation, the statement of the supplier was also recorded. Statement of Sh. Rajat Gupta, prop. of M/s Shri Girraj Ji Jewellers, Mathura was also recorded who stated that he supplied 5 kgs gold bullion to Sh. Mayank Agarwal under Invoice No. 13 dated 30.06.2021 wherein the description of gold was not mentioned. In the case in hand, gold is only notified item under Section 123 of the Customs Act, 1962 wherein the burden of proof of procurement of the said gold lies on the appellant that the same is procured through licit means and the appellant has produced a tax invoice to that effect. The decision in the case of ADDITIONAL DIRECTOR GENERAL (ADJUDICATION) VERSUS M/S ITS MY NAME PVT LTD 2020 (10) TMI 237 - SUPREME COURT is directly applicable to the facts of this case, where it was held that Allegations in a Show Cause Notice are merely allegations, till proved, in adjudication. Were there to be no material, whatsoever, justifying clearance of the imported goods, such allegations may, conceivably, have a part to play, in examining the request for provisional release. The balance of convenience in allowing provisional release lies in favour of the appellant - provisional release of the seized gold allowed subject to conditions imposed - appeal allowed.
Issues Involved:
1. Provisional release of seized gold bars. 2. Legitimacy of the gold procurement and compliance with legal provisions. 3. Applicability of legal precedents and statutory obligations. 4. Conditions for provisional release of goods under Section 110A of the Customs Act, 1962. Detailed Analysis: Provisional Release of Seized Gold Bars: The appellant appealed against the rejection of their request for provisional release of gold bars seized by the Directorate of Revenue Intelligence (DRI). The appellant had purchased 5 gold bars weighing 5 kgs from a registered dealer, M/s Shri Girraj Ji Jewellers, and provided a tax invoice as proof. Despite this, the DRI intercepted the gold bars during transportation and seized them. The appellant's initial application for provisional release was rejected, leading to the current appeal. Legitimacy of the Gold Procurement and Compliance with Legal Provisions: The appellant argued that the gold was purchased from a registered dealer with proper documentation, reflected in the GSTN portal in Form GSTR-2A. They contended that the gold was procured through licit means, fulfilling the requirements under Section 123 of the Customs Act, 1962, which places the burden of proof on the appellant to show the source of procurement. The appellant cited the decision of the Hon’ble High Court of Delhi in the case of Additional Director General (ADJ.) vs. Its My Name Pvt Ltd to support their claim for provisional release. Applicability of Legal Precedents and Statutory Obligations: The respondent opposed the appellant's contention, highlighting that the seller denied selling the specific gold bars seized. The Tribunal examined the facts and noted that the gold bars had different markings from those described in the invoice. The Tribunal referred to the decision in Additional Director General (ADJ.) vs. Its My Name Pvt Ltd, where the Hon’ble High Court of Delhi allowed provisional release despite allegations of smuggling, emphasizing that provisional release does not inhibit adjudication of the show cause notice. Conditions for Provisional Release of Goods under Section 110A of the Customs Act, 1962: The Tribunal observed that provisional release should be allowed if the appellant furnishes a bond covering the full value of the goods and a bank guarantee. The Tribunal cited the case of Its My Name Pvt Ltd vs. Additional Director General (ADJ.) and emphasized that provisional release does not interfere with the adjudication process. The Tribunal also noted that the appellant had provided sufficient documentation to show the gold was procured legally. Conclusion: The Tribunal concluded that the seized gold could be released provisionally, relying on the precedent set by the Hon’ble High Court of Delhi. The Tribunal directed the provisional release of the gold on the following conditions: - The appellant must furnish a bond for the full value of the seized goods. - The bond must be backed by a bank guarantee of 30% of the value of the gold with an auto-renewal clause in favor of the Revenue Authority. The appeal for provisional release of the seized gold was allowed with the stipulated conditions, and the Revenue Authority was directed to release the seized gold within 7 working days.
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