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TMI Blog2005 (9) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... el Proprietor of M/s. Patel Bullion, Ahmedabad. Rs. 50,000/- (Rupees fifty thousand only) (4) Shri Natubhai Babubhai Patel Rs. 5,000/- (Rupees five thousand only) (5) Shri Jashwant Kanjibhai Patel Rs. 5,000/- (Rupees five thousand only) (6) Shri Arvindhvai Kantilal Patel Rs. 5,000/- (Rupees five thousand only) (7) Shri Bhikhabhai Tulsibhai Patel Rs. 5,000/- (Rupees five thousand only) (8) Smt. Rasilaben Harshadbhai Rathod Rs. 5,000/- (Rupees five thousand only) (9) Shri Satishbhai Amrutlal Patel Rs. 5,000/- (Rupees five thousand only) They are being disposed off by this common order. 2.1 After hearing both sides and considering the material on record it is found: (a) Officers of Crime Branch of the Ahmedabad Police pursuant to an information stopped 8 persons, in two groups, a Lakudi Talao crossing Ahmedabad at about 8 pm on 23-10-1999. On interrogation and verification, after this interception, and these persons disclosing that they were carrying gold, the police officers searched them and found 551 Foreign Brand marled g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Customs Officer, all these persons and the gold, were at the premises belonging to M/s. S.K. Jewellers situated at 13-B, Jeewandeep Building, where the said persons from whom the gold was recovered were taken by the police officers after intercepting them at Lakudi Talao crossing, Ahmedabad. These persons and the gold was admittedly under the police guard from 23-10-99 when the police intercepted these persons up to the final panchanama drawn by the Customs officers on 29-10-99. (d) Shri Vijay D. Patel, Proprietor of M/s. Paras Bullion, Ahmedabad and Shri Shailesh Patel, Proprietor of M/s. S.K. Jeweller another Bullion, dealer of Ahmedbad have owned up the 500 bars seized, on 29-10-99 . (300 TT bars by Shri Shailesh Patel and 200 by Shri Vijay D. Patel). Shri Shailesh Patel had claimed the total 351 TT bars (300 seized and 51 returned to Shri Nandubhai Brijlal Soni by the Customs officers) and Shri Vijay D. Patel had claimed 200 TT bars seized on 29-10-99 and also had disclosed to the officers on 23/24-10-1999 that these 300 bars claimed by Shailesh were sold by Vijay to Shailesh. (e) The Customs Officers started their enquiry in the early hours of 24-10-99 by re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act, 1962. (ii) Duty at tariff rate should not be charged from them under Section 28 of the Customs Act, 1962. (iii) Interest should not be charged from them under provisions of Section 28AB of Customs Act, 1962. (iv) Penalty should not be imposed on each of them under the provisions of Section 112(a)/112(b)/114A of the Customs Act, 1962. (v) The articles shown against each in Annexure-D used for concealing the FM Gold TT bars should not be confiscated under Section 118 of the Customs Act, 1962. The Commissioner ordered the confiscation of the 500 TT marked gold, the waist band, shoes and imposed penalty as recorded hereinabove. (f) Since M/s. S.K. Jewellers, M/s. Paras Bullion, and M/s. Patel Bullion, were found to be Proprietary firms and penalty was arrived at and imposed on the proprietor of these firms vide the order impugned therefore the Commissioner held the same to be good for the proprietary concern and he refrained from imposing separate penalty upon the proprietors the said firms are not in appeal. (g) It is an admitted fact that Smt. Rasilaben Rathod and S/Shri Arvindbai Kantibai Patel and Shri Jaswant K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner, over- looks, a fact, that one Nandubai V. Soni was also found carrying 51 TT bars, concealed in the shoes he was wearing, in a similar manner. He was not even issued the show cause notice, nor the gold found concealed and carried by him seized. It was returned on production of a bill of M/s. Amarpali of Ahmedabad even though it was not in his name. This Nandubai was intercepted by the police, along with the other persons on the same errand on the same date i.e. at about 8 pm on 23-10-1999. The possession of gold by this person was obtained in a similar fashion from the Bullion dealers, as in other cases. The said bullion dealers were carrying TT bars with them and accompanying these carriers. From these facts it is evident that the carriage of the TT bars concealed in the shoes was not a modus operandi adopted to transport concealed smuggled gold, as arrived at by the Commissioner in the findings as extracted hereinabove. Transportation of gold, packed in a similar manner, of almost same quantities, in the shoe soles, appears to be a normal fashion of transporting gold bars, by carriers in the bullion market, irrespective of the fact, whether they have bills/vouchers or th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trusted person/carriers/employees to be innocent carriers of TT bars, indulging in the normal course of their trade/profession to be carrying the same from the Bullion dealers premises in Ahmedabad to a safe destination as per the requirement of the Bullion dealers, in the normal course of their profession. They are not found to have dealt with TT bars, knowingly that the said bars were non-duty paid and therefore liable to confiscation. They cannot be held liable to penalty as held by the Commissioner. Penalty on these trusted perscns/employees/carriers is therefore is to be set aside and their appeal allowed. (h) As regards Shri Satishbai A. Patel, the Commissioner has found that while working as an accountant of M/s. S.K. Jewellers he has been preparing the bills for the said firm and as admitted that Shri Devang A. Patel had given him Bill No. 11931, dated 23-10-1999 on behalf of M/s. Paras Bullion issued in favour of M/s. S.K. Jewellers and the said bill was kept with him and recovered from his possession during the search of his residential premises. His further statement that he does Accounting work for M/s. S.K. Jewellers was aware of this. After recording this in para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Patel along with the aforementioned persons, Shri Devang A. Patel had tried to get the bills prepared for the 500 gold, biscuits of foreign markings recovered from the abovementioned Noticees by Police on 23-10-1999 as is evident form his own statement dated 7-12-99 and the statement dated 6-12-99 of Shri Ashwinbhai I. Patel just to legalise, as an afterthought, the sale/purchase of the aforementioned 500 gold biscuits of foreign mark placed under seizure on 28/29-10-99. Further, Shri Devangbhai Patel has claimed the ownership of the 200 pcs of CREDIT SUISSE mark gold TT bars seized from Shri Vijay D. Patel vide his statement dated 6-11-99. He has further stated therein that on 23-10-99 they had prepared packets of the aforesaid 200 gold TT bars and that they had kept 90 pcs of gold bars in waist cotton belt and rest of the gold TT bars were packed in inner sole of shoes. He has fabricated the 2 bills i.e. Bill Nos. 11930 and 11931 both dated 23-10-99 shown to have been issued by M/s. Paras Bullion in favour of M/s. Patel Bullion and S.K. Jewellers respectively by getting them prepared by Shri Ashwinbhai I. Patel, his material nephew, on 24-10-99 consequent upon the recover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nership of the 200 bars rested with Mr. Vijay Patel of M/s. Paras Bullion and that he said gold was not delivered to M/s. Devang A. Patel, as claimed and therefore an offence under the Foreign Trade (Development and Regulation) Act, 1992 and the Customs Act, 1962, as the cause to arrived at to penalty on Devang Patel is not upheld. Even assuming that a false claim was made by Devang in a proceeding under the Customs Act, 1962, such an effort cannot result in confiscation of the goods per se. For producing forged/fabricated false documents in a proceeding under the Customs Act, 1962 may call for a prosecution under Section 132 of the Customs Act, 1962, it cannot be a reason to arrive at a penalty under Section 112 of the Customs Act, 1962. In any case, invoices prepared subsequent to Sale/delivery and payment thereafter appears and is demonstrated to be a norm in the market by the ld. Sd Advocate for the appellants. Therefore we cannot uphold the penalty arrived at by the ld. Commissioner on Devang Patel. The same is required to be set aside and his appeal allowed. (j) After interception by the police, a fax copy of a delivery challan dt. 23-10-1999 issued by ABN Amro Bank, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulation) Act, 1992 are deemed to have been imposed under Section 11 of the Customs Act, 1962. Gold can be imported into India through the following routes : (i) by passenger (as per provisions of Notification No. 171/94, as amended). (ii) By MMTC Ltd, the Handicraft and Handloom Export Corporation, State Trading Corporation, PEC Ltd. or any other agency authorised by RBI as per provisions of Notification No. 117/94, as amended. I find from the records that the Noticees have not produced any evidence to prove that the gold biscuits of foreign mark under seizure were imported through any one of the three routes described above and the Customs duty leviable on the gold was actually paid. In absence of the adequate cogent evidence in support of the licit import/acquisition of the aforementioned gold biscuits of foreign mark under seizure and payment of necessary Customs duty leviable thereon, I hold that all the aforementioned 500 gold biscuits of foreign mark were brought into India through ports/places other than those notified under Section 7 of the Customs Act, 1962 and they have been illegally imported by the concerned persons without any valid import licence. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oksi, M/s. Amarpali and M/s. Ridhisidhi Bullion who had purchased the gold from authorised dealers (Banks in this case) and admitted having sold the same to the Applicant, the show cause notice against the Applicants cannot be sustained. Since the obligation to pay the import duty, if any, is on the importers and not on the subsequent purchasers. The other submission is since adjudicating authority has dropped the charges under Sections 111(a), 111(b) and 111(d) cannot be sustained. Section 111(d) is concerned with the Prohibited Goods and the gold is no longer a prohibited item. We find force in this submission to not uphold orders of confiscation under Section 111(d) and thereafter consequent penalties under Section 112 of the Customs Act 1962 from all the Appellants herein. (l) The Appellant submitted that they had discharged the burden cast on them, if at all, as was required, by producing all documents, bills and accounts regarding the gold justifying that the gold was validly imported and that they had purchased the same from the Authorised dealers. Shri Sanjanwala pleaded that he has given all the details regarding the same in his two written submissions made by him. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irector of M/s. Amarpali Industries Ltd. Branch-wise gold in balance sold by M/s. Paras Bullion to M/s. S.K. Jewellers and found in search Customs from the Appellant and his employees. Brand Balance sold by M/s. Paras Bullion to M/s. S.K. Jewellers As per the Customs Panchanarma ARGOR 282 282 PAMP SUISEE 9 9 JOHNSON 9 9 MATHEW TOTAL 300 300 (iv) These tallies in toto with the Police Panchanama dated 23-10-99 and Customs Panchanama dated 28/29-10-99. All the 300 gold bars have thus been tallied brand-wise piece by piece. (All the above mentioned Sale Receipts are part of the Show Cause Notice and appear Sr. No. 26 to 30 of Annexure-A to the Show Cause Notice -PB/118). (v) The statement of Shri Naresh K. Choksi Prop. of M/s. K.L. Choksi recorded under Section 108 and reproduced at Addl. PB/25 is as under : As called upon by you under your summons, I produced herewith the following commercial bills for purchase of legally imported, gold, and bullion (silver) and sales bills of sale of gold and silv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... independently, Shri Sanjanwala ld. Sr. Advocate, relied upon the order passed by the CIT (A), Ahmedabad dated 24th Sept., 2002 in support of their arguments and maintain that all the documents which are produced before the Income tax Authority also. On close scrutiny of the said documents, Income tax Appellate Authority has clearly come to the conclusion that the gold bars completely tally and the accounts produced were genuine. The appellants pleaded that full support should be derived from the Order of Income tax, Commissioner (Appeals) in which after due consideration of the accounts books and the material facts about acquisition and payment for the gold transacted by M/s. S.K. Jewellers and also separately in the case of M/s. Paras Bullion, it was established and held that gold TT bars were procured/taken by and on a system known as Jhangad system and payments were effected to the seller by the noticees only after selling the same. It was pointed out that there is ample proof to support the Jhangad system from the document of 51 gold TT bars found from Shri Nandubhai Vrijlal Soni which was not even seized on 29-10-1999; for the said bars claimed by Shri Shailesh Patel, paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsolidated fashion, subsequent to the transactions, on a given day; there is no statutory requirement of the entries to be made in account books and thereafter effect sales/delivery as is the case under the Central Excise Act, 1944 procedures which mandates to make entries in the RG-1, PLA register and other books and thereafter effect delivery. Then the Commissioner (Customs) appears to be led by the concept of stock ledger account maintenance under the Central Excise Law, where it has been statutorily provided to enter even the time of removal to arrive at finding of manipulated accounts. No such statutory provision of an entry in stock ledger book before delivery is applicable to a bullion dealer in the year 1999 for TT bars. The mind set under former Gold (Control) Act and Central Excise Act entertained by the Officers of the Department, has led to a conclusion to doubt the account books. We do not share the doubts of Commissioner (Customs) and mind set. We would rely on the Income-tax Commissioner (Appeals), concurrent findings, on the same account books to arrive and find nothing amiss or and/any entry manipulated in the books herein. (o) We have carefully considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellers or others, for these office premises of theirs anytime in the past or subsequent to 23-10-99. Why should a guard be placed if goods/person are not under detention? The panchanama therefore drawn by the Customs Officers is under the supervision of the police officer and the entire panchanama is a suspect document. While the Appellants want to rely on the rulings in case of Gianchand v. State of Punjab - 1983 (13) E.L.T. 1365, the ld. DR is strongly contesting the application of the said ruling and relies on various case law of this Tribunal and of other higher courts. Since we are arriving at our findings that the entire 551 gold TT bars which were found by the police on 23-10-99 stand accounted for in the books of Bullion dealers and have been claimed by M/s. Paras Bullion and M/s. S.K. Jewellers, to be duty paid gold, acquired by them in the normal course of their business, and the said gold was been transported along with the assistances of their trusted person/emplo yees/carriers in Ahmedabad, at the close of the business hours on 23-10-1999 for delivery and safe keeping elsewhere, we find that the onus, even if cast on the notices, to prove the gold to be smuggled sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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