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TMI Blog2023 (2) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... igin gold bars were legally imported it was incumbent upon the importer and any other person to whom they may have been sold to show documents that the gold was legally imported. The seizure of the gold from the possession of the appellant as recorded in the Panchnama and admitted in the statement which is also affirmed the appeal before us by the appellant itself is undisputed. It is also undisputed that it had foreign markings and has been certified by the jewellery expert to be of foreign origin. The only question which remains is if it was legally imported or smuggled and the burden of proving that it was legally imported rests upon the appellant. There is not even an assertion in the application before the learned CMM by the appellant that he had legally imported the gold. Therefore, we find no force in the submission of the appellant that his statement under Section 108 cannot be relied upon. The other submission made by the learned counsel for the appellant is that nature of the gold is that he had requested Shri Ahadees to supply legally imported gold and, therefore, it should be considered so. This submission cannot be accepted for the reason for the simple reason th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal to assail the order in original [Impugned order] dated 1.12.2017 passed by the Principal Commissioner of Customs (Preventive), New Delhi whereby he absolutely confiscated 8 gold bars of 1 kg. each of foreign origin valued at Rs. 1,84,16,505.68 under Section 111(d) of the Customs Act 1962 [the Act] which were seized from the possession of the appellant. He also confiscated absolutely an amount of Rs. 5,45,000/- seized from Shri Ahadees K. under Section 121. He also confiscated the packaging materials of no commercial value in which the gold and the currency were concealed under Section 118 read with Section 119. He also confiscated the Mercedes car bearing registration No. DL ICQ 7525 seized from the appellant under Section 115(2) which was registered in the name of M/s PRK Diamonds Pvt. Ltd and allowed it redemption on payment of a fine of Rs.10,00,000/-. Penalty of Rs. 50,00,000/- was imposed on the appellant under Section 112(b) (i) and a penalty of Rs.15,00,000/- on Shri Ahadees under Section 112(a)(i). 2. The facts of the case are that the Directorate of Revenue Intelligence [DRI] received intelligence that a person aged about 26/27 years and around 5‟5 tall wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s DIJLLAH GOLD UAE1 KILO GOLD 995.0 with serial numbers A 032796, A 032797, A 032812, A 032796, A 032797, A 032922, A 032929, A 032931 and A 032928. The expert Appraiser assessed the material as foreign origin gold of 995 purity totalling weighing 8 kg. 7. The Indian currency notes in the pink polythene packed were Rs. 500x1090 pieces = Rs. 5,45,000/-. 8. Neither the appellant nor Shri Ahadees produced any document in support of the licit import and possession of the gold bars. The appellant explained that Shri Ahadees gave him the gold in the black bag and he had, in return, handed over the currency in the pink polythene bag. Under the belief that the car, the gold and the cash were liable for confiscation, they were seized. Statements of the appellant, Shri Ahadees and the driver Shri Goswami were recorded. 9. In his statement dated 8.12.2015 the appellant said that he had joined his father‟s business in gold jewellery in the year 1997 and that he opened a company in the name of M/s PRK Diamonds Pvt. Ltd., Karol Bagh which would purchase diamonds in wholesale and sell to different retailers. In November 2015, one Shri Mushtaq, suggested to him to start business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars. He met Shri Harris through Mustaq whose Mobile No. 9560790231 is actually registered in the name of one Shri Jibin who used to reside with him in Chattarpur, New Delhi but he is using the Sim card from October 2015 and he provided this number to Shri Sunny Kakkar who advised him to contact him only on mobile No. 7289970347 although he had another number. 14. Shri Rajesh Kumar Goswami, driver gave his voluntary statement on 8.12.2015 confirming the incidents which happened on 7.12.2015 which resulted in seizure under the Panchnama. 15. Officers of DRI obtained the call details of the recovered numbers and found that Vodafone connection 7289970347 which was recovered from Shri Sunny Kakkar and which was being used for communication with Shri Ahadees for smuggling operations was registered in the name of one Shri Beisenbek Kaskyrbayev a Kazakhstani national but no such person was found at the given address. Enquiry with the Foreigners Regional Registration Officer, New Delhi showed that Shri Beisenbek left India on 21.4.2015 and was not in India when the connection was obtained in his name. Call details obtained from the telecom operator showed that there were calls between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain asserted that the car must be leased unconditionally. 19. Shri Ahadees, in reply dated 27.10.2017 submitted that some secret information said to have been received by DRI cannot be accepted as gospel truth and despite specific information and DRI failed to draw panchanama at the place of interception. The statement recorded under Section 108 cannot be infer guilty beyond reasonable doubt of the appellant. He also argued that the currency of Rs.5,45,000/- is not commensurate with the gold recovered from Shri Sunny Kakkar hence cannot be said to be the sale proceeds of the recovered gold. He submitted that he was successfully running the business of consultancy in aviation and the currency recovered from him is not exhorbitant in his business. 20. Personal hearing was fixed for several dates. The adjudicating authority changed and the new adjudicating authority (who passed the impugned order) fixed personal hearing on 27.9.2017 but neither the appellant nor Shri Ahadees appeared. A second personal hearing was fixed on 10.10.2017 during which Shri Ashutosh, Advocate appeared on behalf of the appellant and sought cross-examination of Shri Ahadees. Shri Nitin Johsi, Advocate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant, at the outset, submitted that the entire recovery of the gold itself is doubtful because allegedly the transaction took place in a car at Rajeev Chowk Metro Station but the panchnama was drawn in the parking lot of DRI office. On a specific query from the bench if the appellant was contesting the recovery of the gold itself, learned counsel affirmed it. However, the prayer of the appellant in the appeal itself shows that the appellant is seeking the gold recovered from his possession to be released to him unconditionally. He further prayed that the vehicle recovered from his possession also should be released to him unconditionally. We, therefore, find no basis for the appellant to challenge the recovery of the gold when the entire prayer in this appeal itself states that the gold and the car were recovered from him. We also note that in the reply to the show cause notice before the adjudicating authority also the appellant never contested the recovery of the gold but only were legally imported into India. 23. The following other submissions were made by the learned counsel for the appellant : (i) The principles of natural justice were violated as no opportunity wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defences brought out in their reply to show cause notice, their submissions during personal hearing, and the outcome of the cross examination. The principles of natural justice were therefore, followed. (ii) The Appellant admittedly did not have any documents to show licit possession of the impugned foreign origin gold bars. He also admitted in his voluntary statements recorded under Section 108 that the gold bars were smuggled and that they were not brought into India through any legal channel. In fact, he himself disclosed that the gold was sent by some person named Harish from Dubai. Investigation established that the appellant was knowingly involved in purchase of smuggled gold for monetary benefit. (iii) Appellant failed to produce any proof or document in support of his claimed retraction at the earliest opportunity. It is settled law that retraction from statements tendered under Section 108 of the Customs Act 1962, if any, needs to be addressed to the same authority. No such retraction in the instant case took place. (iv) Unscrupulous and covert activities resorted by the Appellant like(a) using mobile number of a fictitious person that was obtained using forged/fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person other than authorized person/nominated agency falls within the definition of prohibited goods liable for confiscation under Section 111(d) of the Customs Act 1962. (ix) Conveyance/Vehicle/Carriage used as a means of transport in the smuggling of any goods is liable to confiscation under Section 115(2) of the Customs Act 1962 unless the owner of the Conveyance/Vehicle/Carriage proves that it was so used without the knowledge or connivance of the owner himself, his agent, and the person in charge of the Conveyance/Vehicle/Carriage. (x) A person in conscious possession and control of smuggled goods liable for confiscation becomes liable for penal action under Section 112(b) of the Customs Act 1962. 25. We have considered the submissions made by both sides and perused the records of the case. 26. The questions which need to be answered in this case are: (i) Were the 8 gold bars correctly confiscated under Section 111(b) and 111(d)? (ii) Is the confiscation of Mercedes car under Section 115 and its redemption on payment of fine of Rs. 10 lakhs correct? (iii) Was the fine of Rs. 50 lakhs correctly imposed on the appellant under Section 112(b)(i)? 27. We not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any other law for the time being in force . 32. As per Section 2(39) smuggling , in relation to any goods, means any act or omission which will render such goods liable to confiscation under section 111 or section 113. Therefore, if the gold bars in dispute are held liable for confiscation under Section 111 they will fall under the category of smuggled gold as per Section 2(39). Another important section in this regard is Section 123 which reads as follows: SECTION 123 - Burden of proof in certain cases. (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be - (a) in a case where such seizure is made from the possession of any person, - (i) on the person from whose possession the goods were seized; and (ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person; (b) in any other case, on the person, if any, who claims to be the owner of the goods so seized. (2) This section shall apply to gold, and manufactures thereof, watches, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the appellant. However, there is nothing in the statement made before the learned CMM explaining the nature of the gold seized from the appellant. In the absence of any other explanation, the statements made by the appellant and Shri Ahadees before the officer must be accepted as correct. These statements corroborate each other and with the panchnama. The cross-examination of Shri Ahadees by the learned counsel for the appellant also confirm the facts pertaining to this seizure and also that on previous two occasions smuggled gold was transacted between the appellant and Shri Ahadees. The mobile phone recovered from the appellant and which was used to communicate with Shri Ahadees was also obtained in the name of Shri Kaskyrbayev a Kazakhi national who was not even in India at the time the SIM card was issued which corroborates the clandestine nature of the transaction in the confiscated gold. 35. Thus, the seizure of the gold from the possession of the appellant as recorded in the Panchnama and admitted in the statement which is also affirmed the appeal before us by the appellant itself is undisputed. It is also undisputed that it had foreign markings and has been certifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. pleading that the car to be released to it. On the other hand, the appellant himself has prayed for the release of the car to him. Learned counsel for the appellant submits that as the Director of company and also as the person from whom the car was seized the appellant was entitled to seek release of the car. In other words, the learned counsel for the appellant agrees that the appellant represents the company M/s PRK Diamond Pvt. Ltd. Since the show cause notice was issued to the appellant proposing confiscation of the car, we find no force in the argument that notice should have been issued to M/s PRK Diamond Pvt. Ltd. It is not open to the appellant to represent M/s PRK Diamond Pvt. Ltd. to seek release of the car but claim that he does not represent M/s PRK Diamond Pvt. Ltd. when it comes to receiving show cause notice and answering it. The car was allowed redemption on payment of fine of Rs. 10 lakhs. We are of considered opinion that this is a reasonable amount of redemption fine imposed, if the appellant chooses to redeem the car. 37. The last question to be answered is regarding the penalty under Section 112(b)(i) of Rs. 50 lakhs imposed upon the appellant. We find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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