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TMI Blog2020 (10) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... about the origin of the gold bars seized from the appellant. It is not mentioned as to where, how and by whom the said gold was smuggled into India. Therefore, the smuggled nature of the impugned gold is far from established. In such circumstances, the department appears to have attempted to cover up the inadequacies in the investigation with not so convincing reasons. No reference was made to experts in the field. Though Chemical examiners report indicated the purity of the Gold, it did not conclude that the impugned gold was of foreign origin - Department has not established that the seized gold is of foreign origin and has also not established that the same was smuggled in to India. As the reasons to believe that the impugned Gold is of foreign origin and is smuggled, benefit of doubt or benefit of any shortcomings in the investigation should accrue to the appellant and not to the Revenue. Whether the Customs have followed correct procedure vis- -vis search and seizure of the gold? - HELD THAT:- It is found that no proper search of the appellant was conducted at the Railway station. As per the show cause notice, pieces of gold were found with the appellant at the Railway s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before the Metropolitan Magistrate, Kolkata and was granted bail and left for home traumatised. 2.1. Vide letter dated 30.3.2016, in reply to summons dated 23.02.2016 from the Superintendent of Customs, the Appellant submitted that his statement recorded on 22.01.2016 was obtained under coercion and threat; he was not allowed to write the source of the gold found from his possession; the seized gold was melted out of old jewellery inherited by their joint family on death of his grandmother; as advised by Shri Anil Kumar Agarwal @ Anil Kathuria, he brought those pieces to Kolkata for getting those embossed with lookalike marking of foreign brand with a motive that it would fetch better price.; he also submitted valuation report dated 31.03.2013 prepared by a registered valuer Sunil Kumar Mookim; he received copies of relied upon documents on 14.02.2017 and submitted a reply dated 27.11.2017, to the SCN along with print out retrieved from respective websites of similar foreign brand gold, their shapes, weight etc. ;copies of the Valuation report of the jewellery belonging to the grandmother and the suit filed by the family members of the deceased grandmother before the jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn India; there are a number of melting houses operating over in the city; some sort of foreign marking made to get a better acceptance by the buyer, does not prove smuggled nature of the gold; He relied upon the following decisions by Tribunal : (i). Nand Kishore SumaniVs CCCE ST, Siliguri [2016 (333) ELT 448 (Tri. Kol)] (ii). MadhukarSonabaBhagatVs CC CC (P), West Bengal 2019 (368) ELT 990 (Tri - Kol) (iii). Sultan DharaniVs CC (P), Mumbai [2007 (220) ELT 820 (Tri -Mumbai)] 4. Learned Authorised Representative, appearing for the Respondents, submits that appellant claimed that the search was illegal; no such claim was made by the appellant at any time before the present hearing; the same cannot be entertained at this stage. The gold bars were seized in the reasonable belief that these were smuggled into India and hence, liable for confiscation under the Customs Act; the said belief was founded on the presence of foreign marks on the gold bars and absence of any evidence/explanation of their licit possession by the appellant. Learned AR, further submits that Gold being a notified item under Section 123 of the Customs Act; in case of seizure of any notified item in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment in turn submits that the appellant has not taken these pleas before the adjudicating authority and is taking these pleas for the first time at the appellate stage and hence, inadmissible. We find that these are not facts of the case but the basic legal issues involved in the case. Even though it is a departmental proceeding, appellant s right to raise legal issues cannot be taken away. However, we also find that the appreciation of the case would not solely hinge on these issues, disregarding the merits of the case. 6. Brief issues involved in the present case, which require consideration by the Bench,are : (i) Whether the Revenue establish the existence of reasons to believe that the impugned gold was smuggled ; (ii) Whether the impugned gold is liable to be categorized as gold of foreign origin ; (iii) Whether the Customs have followed correct procedure vis- -vis search and seizure of the gold. 7. Coming the issue at Sl.No. (i), we find that in terms of show-cause notice (in Para 1), it is seen that on being notified/identified by the informer, the Officers intercepted the appellant, at Howrah Railway Station, waiting to board the train to Dhanbad; on inspec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitial claim of the appellant that the impugned gold was purchased from one Mr Rajesh at SonapattiBurra bazar was false, the investigation does not specify steps taken to locate the said Mr Rajesh except showing that the inquiries conducted in this regard were not successful and hence the claim of the appellant was incorrect. However, while recording the statement of the appellant on 29.03.2016 for reason best known to them, the officers did not even countered the appellant with any question pertaining the said Shri Rajesh; even a faint attempt to prove that the appellant s claim was wrong, was not made. Similarly, no action appears to have been taken on the claim of the appellant that family gold was melted, except stating that this is an afterthought. It is interesting to note that the search of appellant s house was attempted only after three weeks of the arrest and by that time, the appellant is stated to have changed his address. We find that the in spite of a claim being made by the appellant, no enquiries seem to have been conducted to show some proof to dis-believe the claim of the appellant. Under the circumstances, the appellant s assertion that this claim dated 30.03.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then, the question of burden of proof on the person, claiming to be the owner of the goods, would arise only when the challenge to seizure is, negatived. In the facts of the present case, neither before us nor before the authorities under the Act, has the respondent No. 1 challenged the seizure for absence of reasonable belief that the seized gold was smuggled goods. Thus, the burden of proof in this case is upon the respondent to establish that the seized gold bars are not smuggled. The Honourable High Court further observes that (B) Reg. Question (b) :- (i) (ii) (iii). We are of the view that in the absence of evidence in the form of regular books of account, registration under the income-tax and Sales Tax, etc., cannot ispo facto lead to the conclusion that the seized gold bars, are smuggled gold bars. These may lead to proceedings for breaches of other Acts but it does not follow from it that the gold bars are smuggled goods. In fact, if a person in possession of the stolen gold is able to establish that it had come into India after a proper declaration and compliance of the Act, no confiscation under the Act, can arise. Proceedings under the Indian Penal Cod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment has neither pursued the case vigorously to arrive at a logical conclusion nor has bothered to counter the assertions/submissions of the appellants at least to reinforce the initial belief that the department entertained that the gold seized was of foreign origin. There is no whisper in the entire show cause notice about the origin of the gold bars seized from the appellant. It is not mentioned as to where, how and by whom the said gold was smuggled into India. Therefore, the smuggled nature of the impugned gold is far from established. In such circumstances, the department appears to have attempted to cover up the inadequacies in the investigation with not so convincing reasons. No reference was made to experts in the field. Though Chemical examiners report indicated the purity of the Gold, it did not conclude that the impugned gold was of foreign origin. Under the circumstances, we find that department has not established that the seized gold is of foreign origin and has also not established that the same was smuggled in to India. As the reasons to believe that the impugned Gold is of foreign origin and is smuggled, benefit of doubt or benefit of any shortcomings in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase may be, such Gazetted Officer or magistrate is empowered to forthwith discharge the person if he sees no reasonable ground for search, or otherwise direct that the search be made. In my opinion, the suspect will be denied of this additional degree of protection/opportunity if a Gazetted Officer himself takes search and does not apprise the suspect of his rights under Section 102 thereby the procedural requirements of Section 102(3) not being complied with. 8.1. We find that no proper search of the appellant was conducted at the Railway station. As per the show cause notice, pieces of gold were found with the appellant at the Railway station as well as the Customs House. The reasons for summoning a person, instead of searching and seizing on the same spot and taking him to the Customs House for detailed search etc. has not been properly explained in the show cause notice and in the order-in-original. However, the learned authorized representative for the department submitted that as it was a public place and lot of commotion is likely to develop, the appellant has been summoned to the Customs House for seizure and recording statement etc. However, we do not find the same to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not the subject of our discussion, we need not go in to the matter more deeply. 10. Non-drawl of Panchnama at the Railway station as well as at the Customs House, the absence of details of the witnesses along with their signatures in the inventory prepared, non-pursuit of the whereabouts of Shri Raju of Sonapatty, Burrabazar, delay in the search of house premises of the appellantetc certainly go a long way to lend less credence to the investigation and make it difficult for us to rely upon their findings. In addition to this, as discussed above, the origin of the gold was not investigated to a logical conclusion and smuggled nature of the same is not established. The claim of the appellant that gold bars of foreign origin contain unique serial number and that the markings on the gold seized from him differ in form and style with the real foreign ones was brushed aside. However, as we observed above, one Kg Gold Bars manufactured by PAMP SUISSE or Valcambi need to have unique number as per LBMA. Revenue just got the purity measured from chemical examiner. No report on the gold being foreign origin was give. No assay was gold got done. No expert opinion was taken. This is not a c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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