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TMI Blog2023 (5) TMI 1087X X X X Extracts X X X X X X X X Extracts X X X X ..... achari Street, Vijaywada. He identified himself as Shri Bala Nagu Naga Raju. On being asked he admitted for having smuggled gold being concealed in the waist pouch tied around his waist. To avoid any untoward incident at the public place, the DRI Officers took the appellant to their office for being searched in the presence of Panchas. There, he untied a pouch from his waist wherein there was a heavy object rapped in a newspaper. After being unwrapped, two rectangular bars and a small piece of irregular shaped yellow coloured metal were found having marking viz., '999' inscribed all over the metal bar with an additional inscription of '4376' being embossed on one of the rectangularbar. On being enquired, appellant admitted that the gold is of foreign origin which he purchased from a person in Chennai, it was smuggled into India and got remelted into bars for further illegal sale in India. The officers got the recovered metal pieces tested from M/s. Surya Gold Testing Centre, a government approved assayer. Vide the certificate dated 31.08.2017, the yellow metal was confirmed as gold and the weighment and fineness was certified as follows: (i) 1 Large Rectangular bar with number "4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant was intercepted while coming from Chennai. The question for gold which was recovered from the appellant, to be a smuggled article does not at all arise. This particular fact is impressed to be sufficient to hold that there is no cogent reason of any reasonable belief with the DRI Officers to opine the recovered gold to be a foreign origin. Thus the authorities below have wrongly invoked Section 123 of the Customs Act, 1962. It is further submitted that the appellant has fully cooperated during the investigations and all relevant facts were duly been brought to the notice of DRI Officers. The requisite documents in the form of invoices of purchasing gold were brought on record to prove that the gold in the hands of the appellant was melted gold and that it was purchased in India only for being sold in India only, hence, no question arises for it to be of foreign origin and for it to be smuggled one. It is mentioned that not only the confiscation has wrongly been ordered, the penalties on appellant have also been wrongly imposed. Accordingly, the order of Commissioner (Appeals) is prayed to be set aside and the appeals are prayed to be allowed. To support his submissions learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon by the parties.The points of adjudication to my opinion are as follows: (i) Whether Section 123 of the Customs Act, 1962 is invocable in the given set of circumstances. (ii) Whether the gold recovered in question was actually the gold of foreign origin illegally imported into Indian Territory and thus is liable for confiscation. (iii) Whether appellants are liable for penalty. 6. First point of adjudication Section 123 of the Customs Act postulates the theory of 'reverse burden of proof.' The Section reads as follows: 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 sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 108 of the Customs Act are admissible into evidence. Hon'ble Supreme Court in the case of Naresh J. Sukhawani Vs. Union of India reported as 1996 (83) E.L.T. 258 held that the statement recorded under Section 108 of the Customs Act, 1962 made before the customs officers is not a statement recorded under Section 161 of Cr.PC., for customs officers not being the police officers. Therefore, the statement got recorded by customs officer is the material piece of evidence which can be used as substantive evidence connecting the deponent with the alleged contravention of the customs act. Since there was sufficient admission of the appellant for the gold recovered from his person to be of foreign origin illegally brought into India, I do not want to differ from the findings arrived at by the adjudicating authorities below that Section 123 Customs Act, 1962 has rightly been invoked by DRI Officers. 6.3 In view of the above discussion, the first point of adjudication stands decided in favour of Revenue and it is held that Section 123 of the Customs Act, 1962 has rightly been invoked by the department. 7. Second point of adjudication The appellant has taken a plea that the seizur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 108 of the Act that the gold concealed on his waist is the gold of foreign origin which has been brought to Indian illegally. It is therefore sold at the cheaper rates and that the appellant knows that it is the smuggled gold. 7.3 It is observed that under section 111 (d) of the Act any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force can be confiscated. Gold is a prohibited good inasmuch as its import was permitted during the relevant period only by designated agencies under the Foreign Trade (Development & Regulation) Act, 1992. There is no evidence on record whatsoever to show that the seized gold was imported by one of the approved agencies. Thus, the gold is liable for confiscation under section 111(d). 7.4 As far as section 111(i) of the Act is concerned, it provides for confiscation of "any dutiable or prohibited goods found concealed in any manner in any package either before or after the unloading thereof". The gold in question was, indeed found concealed in the shoes and secret pock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide Invoice No. 4679 dated 28.06.2017 is not the gold seized by the officers of DRI vide Panchanama dated 31.08.2017. There is also an apparent admission on record that the sale of bullion was of 995purity only but the purity of recovered gold is certified as that of 999. It can be judicially noticed that this purity pertains to the gold of foreign origin only. 7.7 I further observe that the definition of import in Section 2(23) of the Customs Act, 1962 has no relevance as to who had brought the article into India from a place outside India. The expression is defined to mean an act of bringing into India from a place outside India. Section 2(23) of the Act defines prohibited goods. I observe that in terms of Foreign Trade Policy (exim policy) 2015-2020, the importation or exportation of gold or silver is restricted, gold is accordingly a prohibited goods. This exim policy has followed the earlier Circular No. 34/2013 dated 04.09.2013 issued with respect to guidelines on import of gold/gold bars into India. It has been clearly mentioned therein that the gold shall be permitted to be imported only by 10 agencies mentioned therein as being notified by DGFT. In the light of these pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egislature had in view. In a subsequent decision by Hon'ble Supreme Court in the case of Superintendent and Remembrancer of Legal Affairs to Government of West Bengal Vs. Abani Maity AIR 1979 SC 1029; (1979) 4 SCC 85, 90, the law is stated in the following terms: "19. Exposition ex visceribus actus is a long recognized rule of construction. Words in a statute often take their meaning from the context of the statute as a whole. They are, therefore, not to be construed in isolation. For instance, the use of the word 'may' would normally indicate that the provision was not mandatory. But in the context of a particular statute, this word may connote a legislative imperative, particularly when its construction in a permissive sense would relegate it to the unenviable position, at it were, 'of an ineffectual angel beating its wings in a luminous void in vain'. 'If the choice is between two interpretations', 'the narrower of which would fail to achieve the manifest purpose of the legislation, we should avoid a construction which would reduce the legislation to futility and should rather accept the bolder construction based on the view that Parliament would legislate only for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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