2024 (1) TMI 1125 - AT - Customs

Smuggling - recovery of 12 gold bars of foreign origin - onus on the appellant to establish legitimacy of the seized gold - HELD THAT - Once the appellant has submitted evidence towards licit procurement of gold from local sources, paid through banking channels, evidence thereto duly recorded in the books of account, it was incumbent on the department to have verified the same. Furthermore, it is categorically placed on record by the appellant that the said documents were anterior to the date of search and seizure and their veracity can also not be doubted as most of them were taken over by the DRI officers and were in their custody at the time of seizure or have been tendered to the department duly authenticated by the banks issuing the same. The authentication by the bank, the document being anterior to the date of seizure, and the documents most of which were taken possession of at the time of seizure by the authorities, therefore clearly discharge the onus on the appellant to establish legitimacy of the seized gold, cast upon the appellants and we find the same to have been satisfactorily complied with. The onus therefore, is now on the department to sustain the legality or denounce the evidence tendered for justifiable reasons in law. It therefore appears that the department has proceeded solely on the basis of surmises and conjectures and did not possess a shred of evidence to bring home the charges levelled. It is settled law that suspicion, no matter how strong, cannot take the place of evidence. In the instant case there are no evidence to nail the appellants. On the contrary the department has not cared to investigate the evidence tendered by the accused or have remained deliberately silent about its outcome. The department has failed to carry out proper investigations into the case and not having examined the evidence of alleged licit acquisition of gold by Narendra Kumar Jain, tendered to them/recovered by them during search and seizure operations does not lead their case any further. Under the circumstances confiscation of the seized 89.820 gms of gold is not merited. In view of the said finding no penalties are also imposable on the appellants. We therefore while upholding confiscation of 6000 gms of gold set aside the remaining part the order under challenge, lift the confiscation of 89.820 gms gold and imposition of penalty on the appellant- Narendra Kumar Jain. As for imposition of penalty on Ramjanam Ray we note that the show cause notice and the adjudication order do not bring about any specific charge against him, other than mere here say evidence and that denial of cross-examination to him have definitely impacted the opportunities of natural justice being offered to the appellant. The fact that no enquiry whatsoever was conducted at the premises of Shankar Jewellery where in Ramjanam Ray was said to be employed (as per the version of the carriers) therefore fails to establish his role, if any into the matter. Appeal disposed off.

Summary

Issues Involved
1. Legitimacy of the seizure of 6000 grams of gold.
2. Legitimacy of the seizure of 89.820 grams of gold.
3. Imposition of penalties on Narendra Kumar Jain and Ramjanam Ray.

Summary of the Judgment

Legitimacy of the Seizure of 6000 grams of Gold
The DRI conducted a search at Khanapara Bus Stand on 02.11.2014, leading to the seizure of 6000 grams of gold of foreign origin from Dipal Kundu and Debashish Kundu. The department concluded that the gold was smuggled, and no claimants for the seized gold came forward. The Tribunal noted that there was no challenge to the confiscation of the 6000 grams of gold, and thus upheld its absolute confiscation.

Legitimacy of the Seizure of 89.820 grams of Gold
On 04.11.2014, 89.820 grams of gold of foreign origin were seized from the business premises of RBPL. Narendra Kumar Jain admitted he had no documents to support the legitimacy of the gold at the time of seizure. However, the appellant later provided evidence of legal procurement, including bank statements and stock registers, which were not adequately examined by the department. The Tribunal found the department's rejection of this evidence as "an afterthought" to be unsubstantiated and ruled that the onus of proving the illicit nature of the gold was not met by the department. Consequently, the confiscation of 89.820 grams of gold was lifted.

Imposition of Penalties on Narendra Kumar Jain and Ramjanam Ray
The Tribunal noted that there was no direct evidence linking Narendra Kumar Jain to the 6000 grams of gold seized from Dipal Kundu and Debashish Kundu. The department's case relied heavily on conjecture without substantive evidence. The Tribunal also observed that the appellant's request for cross-examination of witnesses was overlooked, violating principles of natural justice. Consequently, the penalties imposed on Narendra Kumar Jain were set aside.

Regarding Ramjanam Ray, the Tribunal noted that the show cause notice and adjudication order did not present specific charges against him, relying instead on hearsay evidence. The denial of cross-examination further impacted his right to natural justice. The Tribunal ruled that no penalty could be imposed without clear evidence of his involvement, and thus, the penalties on Ramjanam Ray were also set aside.

Conclusion
The appeal was disposed of with the Tribunal upholding the confiscation of 6000 grams of gold but setting aside the confiscation of 89.820 grams of gold and the penalties imposed on Narendra Kumar Jain and Ramjanam Ray. The Tribunal emphasized the need for proper investigation and evidence-based conclusions in such matters.