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TMI Blog2021 (9) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... of two statements of Sri Prabhash Chandra Jalan in Para 16/E and Para 22/C of the Show Cause notice. It is apparent that the name of the Respondent has been wrongly mentioned in all these places - there is nothing contrary to the statement of the Respondent. Mismatch in Gold Ledger - Gold is clearly not mentioned in their stock register - burden of proof that the same is not smuggled is on the person from whose possession the gold is seized, is not discharged - HELD THAT:- In the instant case it is found that the documents i.e Purchase Register, Sales Register, Balance Sheet, Bank Account details etc submitted by the respondent during investigation which were examined/scrutinized by the department and it was revealed as mentioned in Para 18 and 30 of the Show Cause Notice and the Order In Original, respectively, that all purchases and sales were under proper tax invoices - Considering the fact that the respondent submitted all documents which were asked for by the department during investigation and no discrepancy being found on examination of them, we feel inclined to hold that the gold bars were domestically purchased under legal documents and the respondent has discharged t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablished that the gold bars were smuggled and therefore the provisions of Sec 123 of the Customs Act is not invocable - the respondent has submitted all relevant documents in support of his domestic licit acquisition supported by GST Purchase Invoices. Indian Currency - HELD THAT:- It is found that the ingredients to invoke Sec 121 of the Customs Act is not established to prove that the Indian Currency is the sale proceeds of smuggled goods. The findings of the Commissioner (Appeals) that the confiscated gold was not of Foreign origin and smuggled into India, is agreed upon - the findings of the Commissioner (Appeals) that the confiscated Indian Currency amounting to ₹ 3,31,50,000 which has been claimed by the respondent is not established or proved to be the sale proceeds of smuggled Gold, is also agreed upon, is agreed upon - there is no justification for imposition of penalty on the Respondent u/s 112(b) and 114AA of the Customs Act 1962. Appeal dismissed - decided against Revenue. - Customs Appeal No.75010 of 2021 - FINAL ORDER NO. 75500/2021 - Dated:- 27-8-2021 - SHRI P.K. CHOUDHARY, MEMBER(JUDICIAL) AND SHRI RAJU, MEMBER(TECHNICAL) Shri M.P.Toppo, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan alias Praveen Jalan, Ganesh Jewellers, Kolkata with ₹ 78,00,000 in cash which belonged to his employer Sri Rinku Verma and that he has handed over the said ₹ 78,00,000 to M/s Ganesh Jewellers, Kolkata. Sri Vikram Kumar had in his statement dated 04/06/2018 stated inter alia that he was a resident of Gaya and came here on 01/06/2018 to meet his uncle named Sri Satendra Ram who used to stay in that room and that he did not know who was the actual owner of the said 6 Pcs yellow metals and Indian Currency. Both Sri Rajendra Kumar Dhuriya and Sri Vikram Kumar were arrested U/s 104 of the Customs Act 1962 on 04/06/2018 and produced before the Court of Learned Chief Metropolitan Magistrate on 05/06/2018. Sri Vikram Kumar was released on bail by the Court on 07/06/2018. Sri Rajendra Kumar Dhuriya was released on bail on 26/06/2018 by the Court. While in custody, statements dated 18/06/2018 and 25/06/2018 of Sri Rajendra Kumar Dhuriya were recorded in jail as per the order of the Learned CMM Kolkata. 4. Follow up investigation was carried out by the Revenue. During investigation a statement dated 31/07/2018 of Sri Rinku Verma was recorded by the Officers of Varanasi Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt submitted 300 nos of sale invoices for the period from 01/05/2018 to 04/06/2018 along with the ownership document of the room from which the goods were recovered vide his letter dated 05/12/2018. The respondent appeared further in response to summons and his statement was recorded on 14/12/2018 in which he had inter alia stated that the had no claim for ₹ 78,00,000 under seizure which belonged to Sri Rajendra Kumar Dhuriya whom he had no relation with and that being a chronic patient of heart and undergone an operation of Bypass surgery ,he was not able to attend his office regularly and that since bank was closed from 01/06/2018 to 03/06/2018, the sale proceeds in cash was scheduled to be deposited with bank on 04/06/2018 but those were seized by the Officers who visited the premises on 04/06/2018. 9. After investigation, including examination of the documents submitted by the respondent, a Show Cause Notice dated 28/05/2019 was issued to Sri Rajendra Kumar Dhuriya (Noticee 1) and therespondent Sri Prabhash Kumar Jalan (Noticee 2). In the Show Cause Notice the respondent was asked to show cause as to why the seized gold weighing 6 kgs valued at ₹ 1,86,60,000 whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 07/07/2020 passed by the Commissioner (Appeals) is under challenge by the Revenue. 12. The matter was first heard on 12/02/2021, when the Learned Authorized Representative for the Appellant Revenue prayed for time for procuring documents like copy of Show Cause Notice, copy of statement of the respondent dated 07/08/2018 tendered to the investigating Customs Officer and the copy of the Gold Ledger. Accordingly, time was allowed and the next date for final hearing was fixed after two weeks i.e after 01/03/2021 as and when the Division Bench could be available. The matter came up for final hearing before this bench on 30/07/2021. The respondent had filed his written submissions dated 21/07/2021 which was reiterated by the Learned Advocate on behalf of the Respondent. During the course of hearing the Learned DR for the Appellant Revenue raised certain issues as under: 1. Whether the presumption u/s 123 of the Customs Act 1962 goes in favour of the revenue or not. 2. The claim petition in respect of the seized gold and Indian Currency was filed after 2 months from the date of seizure. 3. The Commissioner of Customs (Appeals) failed to appreciate the fact that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST/0321/18-19) pertaining to cash sales amounting to ₹ 1,09,270 has been entered on 31/05/2018 instead of 30/05/2018. To this, it was the submission of the Respondent in Para 12 of his written submission Dated 02/08/2021 that it was a bona fide inadvertent clerical mistake in the tabulation of the voucher. 16. Heard both sides through video conferencing and perused the appeal records. 17. Now we turn to the grounds taken by the Revenue in its Appeal against the Order In Appeal dated 07/07/2020 passed by the Commissioner Of Customs (Appeals), Kolkata. The revenue has taken the following four grounds: 1. The Commissioner of Customs (Appeals) failed to appreciate the statement dated 07.08.2018 tendered by Sri Prabhash Chandra Jalan proprietor of M/s JalanJewellers that he is a Bullion Merchant involved into purchasing of gold having gold content not below 99.5% embossed with having serial number/batch number/make/brand/trade mark/country of origin from nominated banks or nominated agencies and also used to sale as such either full sized or by cutting thereof but not sold melted gold. However, in the instant case the seized gold has no serial number/batch number/make/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en Sri PrabhasJalan and Sri Dhuriya of Allahabad. 18. Coming to the First Ground, we find that there is no mention of the statement dated 07/08/2018 of the respondent Sri Prabhash Kumar Jalan in the list of Relied Upon Documents enclosed with the Show Cause Notice and that the respondent in his reply to the Show Cause Notice requested for providing the RUDs. We also find that the name of Respondent has been wrongly mentioned as Prabhash Chandra Jalan. However no copy of the said statement or any other statement of the Respondent has been produced during the hearing by the Revenue. However we find that there is mention of two statements of Sri Prabhash Chandra Jalan in Para 16/E and Para 22/C of the Show Cause notice. It is apparent that the name of the Respondent has been wrongly mentioned in all these places. However In the statements so appended in the said two paragraphs 16/E and Para 22/C there is no mention that the respondent stated that he was involved in purchasing gold having serial no/batch no/make/brand/trademark/country of origin from nominated banks or nominated agencies and that he did not sell melted gold. We find that in Para 23/C of the Show Cause Notice, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Customs (Appeals) has also made discussions in Paragraph 20,21,22,23,24,26,27,36 and 37 of his order dated 07/07/2020. Considering the fact that the respondent submitted all documents which were asked for by the department during investigation and no discrepancy being found on examination of them, we feel inclined to hold that the gold bars were domestically purchased under legal documents and the respondent has discharged the burden U/s 123 of the Customs Act 1962 to prove that the gold bars were not smuggled. 20. 1. In the first part of the third ground, it is found that the learned Commissioner of Customs (Appeal) had dealt with this issue of 206 nos of GST sales invoices raised by the appellant (respondent herein) in Para 32 of the Order in Appeal, wherein it has been inter alia held that all this 206 nos of GST sales invoices were reflected in the books of accounts on page nos 65,66,67,69,70,71 and 72 of the Item Register of Gold bar for the Period from 02/05/2018 to 04/06/2018 submitted during investigation to the department and supported by GST Returns. It was further held by him that these 206 GST sales invoices with specific nos and dates were undoubt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing balance of ₹ 3,35,76,215.85 as on 04/06/2018. The learned Commissioner of Customs (Appeal) has also discussed in Para 28,30,31,32 of his order before coming to his conclusion in Para 33 that the currency cannot be considered to represent the sale proceeds of the smuggled goods and therefore the no violation of Section 121 of the Customs Act 1962 has been laid out. 21. In the case of Ramachandra Vs Collector of Customs, reported in 1992 (60) ELT 277 (Tribunal), in para 5 whereof it was held that before violation of Sec 121 is established the following ingredients must be satisfied : 1. There must be a sale. 2. The sale must be of smuggled goods. 3. The sale must be by a person having knowledge or reason to believe that the goods were of foreign origin. 4. The seller and purchaser and the quantity of gold must be established by the Customs Authorities. 22. This decision was relied upon by the Tribunal in the case of Commissioner Of Customs (Prev) Kolkata vs Atiquer Rahman, reported in 2010 (252) ELT (Tri-Kolkata) while dismissing the appeal filed by the Revenue. In this case the Tribunal had inter alia held that: 5) I find that in the present case the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the first place that there were valid grounds for presumption at the time of seizure that the seized 6000 gms gold was of foreign origin and smuggled into India. Evidently the seized 6kgs of gold did not bear any foreign markings. No evidence could be adduced by the department in its subsequent investigation that the seized gold was of foreign origin and smuggled into the country. But the respondent Sri Prabhash Kumar Jalan has submitted all relevant documents including GST purchase and sales invoices and GST returns, Purchase and Sales registers etc covering both the Gold and Indian Currency, which have been admittedly examined by the department revealing no discrepancies as in Para 18 of the SCN, corresponding to Para 30 of the OIO. 25. In the case of Shanti Lal Mehta- 1983 (14) E.L.T 1715 (S.C) it was held by the Hon ble Supreme Court that the reasonable belief is a prerequisite condition of the power of seizure that the statute confers on the officer. The reasonable belief as required by Sec 110 refers to the point of time when the goods in question are seized not to a stage subsequent to the act of seizure . In the said case, the apex court also held that in order to att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no foreign markings and no investigations made by the Department producing evidence of smuggled nature of the Two old bars, the presumption U/s 123 Of the Customs Act 1962 is not invokable. In fact the list is unending and it is almost established law that Revenue is required to prove its case by sufficinent and positive evidence and not on the basis of assumption and presumption. 15. In view of the foregoing, I set aside the impugned order and allow both the appeals filed by Sri Lokesh Kumar Choudhary and Sri Karan Soni with consequential relief to them. In as much as the individual s appeals are allowed, the Revenue s appeal has become infructuous. The same is accordingly rejected. 27. In light of the above decisions of the Hon ble Supreme Court and the Tribunal, we may at the cost of repetition say that there were no grounds for reasonable belief at the time of seizure that the gold bars were of foreign origin and smuggled. Subsequent investigation has also not established that the gold bars were smuggled and therefore the provisions of Sec 123 of the Customs Act is not invocable. However we find that the respondent has submitted all relevant documents in support of hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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