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TMI Blog2023 (8) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... ven the letter issued by the person who had melted the said jewellery. It is department s admitted case that there were no foreign markings on the gold recovered from the appellant. It is also department s own acknowledgement that case against appellant is an accidental case which is not based on any pre-information. When the seizure is not even based on any information against the appellant, the detained/seized gold had no foreign marking, nothing incriminating against appellant was recovered from Innova. The mere fact that the gold has purity of 999.80 as good as that of foreign gold is opined to be highly insufficient a fact to form such reasonable belief as is required for invoking Section 123 of the Customs Act. The most of the findings of the authority are the outcome of the presumption. While rejecting the plea of gold being melted out of family jewellery, the authority has simply held the said submission to be the concocted one, without any cogent proof or reasoning except on the presumption that it cannot be a coincidence that three of the brothers will decide at the same time to get the jewellery in their possession to be melted that too to into one common piece. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The chairman is also required to send the report of said enquiry to this Tribunal. The order under challenge is not at all sustainable - Appeal allowed. - DR. RACHNA GUPTA, MEMBER (JUDICIAL) Shri Arun Goyal, Advocate for the Appellant Ms. Tamanna Alam, Authorized Representative for the Respondent ORDER Present is an appeal against the Order-in-Appeal No. 03/JPR/2023 dated 17.02.2023. Vide which the absolute confiscation of seized gold weighing 999.940 grams of gold has been confirmed along with the imposition of penalty upon the appellant. Facts relevant for the impugned adjudication are as follows: 1.1 On the basis of a specific intelligence, one Innova car bearing registration no. RJ19FA 0369 was intercepted by the Officers of Directorate of Revenue Intelligence (DRI) Jodhpur and CGST, Jodhur at Bilaraon18.09.2020. When the intercepted vehicle was searched, 5514.8 grams of smuggled gold was recovered along with some slips issued for testing of gold by M/s. New Satyam Tounch Centre, Jaipur. Following the address of said Tounch Centre as mentioned in those slips, that a search was carried out by the Officers of DRI, Jaipur at the said Centre on 18.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at may prove his ownership to the detained gold bar that Section 123 of the Customs Act, 1962 be invoked. Since the appellant could not satisfy that the gold recovered from him is not a smuggled gold that he was served with a show cause notice bearing No. 1295 dated 06/09.11.2020 proposing the absolute confiscation of 999.940 grams of gold valued at Rs.52,39,952/- as was seized vide seizure memo dated 26.10.2020. The penalty was also proposed to be imposed upon the appellant. The said proposal was initially confirmed vide Order-in-Original no. 32/2021 dated 09.09.2021. The appeal against the said order has been rejected vide the order under challenge. 2. I have heard Shri Arun Goyal, learned Advocate for the appellant and Ms. Tamanna Alam, Authorized Representative for the department. 3. Learned counsel for the appellant has mentioned that DRI had an information about smuggling of gold in an Innova car which consequently was intercepted, resulting into recovery of 5514.8 grams of allegedly smuggled gold along with the recovery of some slips about testing of gold issued by M/s. New Satyam Tounch Centre. It is impressed upon that the appellant has no connection with the referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. The only corroboration to that slip and to the fact that appellant wrongly identified him as Mukesh is the statement of Shri Ujjval Rakshit, the proprietor of M/s. New Satyam Tounch Centre. It is impressed upon that statement is highly insufficient to prove anything against the appellant for the reason that Shri Ujjval Rakshit was not at the centre at the time the invoice No. 25 dated 18.09.2020 issued in the name of Mukesh was generated. It is apparent from Panchnama that Shri Ujjval Rakshit was called by the Raiding Officers after they conducted search of the M/s. New Satyam Tounch Centre. Finally impressing upon that the there is no iota of any evidence against the appellant, it is mentioned that the order of absolute confiscation of his hereditary gold and imposition of penalty upon him is liable to be set aside. Learned counsel has also relied upon CBDT instructions, 1994 dated 11.05.1994 according to which in the case of a person not assessed to wealth-tax gold jewellery and ornaments to the extent of 500 grams per married lady, 250 grams per unmarried lady and 100 grams per male member of the family, need not to be seized. 3.2 Learned counsel further impressed upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods are not the smuggled one upon the person from whom the gold have been seized. Hence foremost it need to be seen as to whether the section has rightly been invoked. The section 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, and any other class of goods which the Central Government may by notification in the Official Gazette specify. The perusal makes it clear that the theory of reverse burden under this provision can be invoked if there is a reasonable belief that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that may give the reasonable belief to the investigating team to invoke Section 123. I accordingly hold that the said section has wrongly been invoked by the department against the appellant. Resultantly, it was the burdened duty of the department to prove that the gold recovered from the appellant was the smuggled foreign gold. I rely upon the decision of this Tribunal, Kolkata Bench, in the case of Nand Kishore Sumani Vs. Commr. of Cus., C.Ex. S.T., Siliguri reported as 2016(333) E.L.T. 448 (Tri.-Kolkata), wherein it is held as follows: 6 . Regarding applicability of Section 123 of the Customs Act, 1962 it is relevant to go through the provisions of this Section reproduced below. 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 sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e doubt regarding the genuineness of the transaction. The appellants have contended that biscuits and the bars are synonymous terms used by the persons dealing in gold and are interchangeable T.T. Bars represent ten tola bars which are also referred to as biscuits. The Commissioner in his impugned Order has nowhere observed as to what is the difference between a biscuit and a bar. Similarly, as regards weight, I find that there is a variation of about 2 gms. in the weight of all the sixteen pieces of gold. The standard 10 tola bars weigh 116.640 gms., and as such, the total weight of 16 pieces of biscuits would come to 1866.240 gms., which is reflected in the sale voucher of M/s. Chauhan Zevares. Similarly, it is a matter of common knowledge that the standard purity of gold is 999.00. As such, as rightly contended by the learned consultant, the small variation in the weight or in the purity of gold is attributable to the human error and cannot be made the basis for rejecting the sale voucher of M/s. Chauhan Zevares who have admitted to have sold the goods to the appellants. This has also been observed by the Commissioner that M/s. Chauhan Zevares have subsequently stated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of Section 123 stands fully discharged. The confiscation of the gold biscuits is not called for. Accordingly, I set aside the same. 15. Inasmuch as the confiscation of the gold biscuits has been set aside, the confiscation of the truck is not called for. For the similar reasons, there is no warrant for imposition of penalties upon the various persons. The same is, accordingly, set aside. 7.1 In the light of the above relied upon case law in the case of foreign marked gold also it was held by this Bench that appellant has discharged the onus when the bills covering the foreign marked gold bars are furnished. In the present case the seized gold bars do not bear foreign markings, do not have uniform weight/purity and appellant has shown the purchase bills covering the said gold bars having assorted size, weight and purity. The person who sold the seized goods has also confirmed to have supplied the same to Shri Nand Kishore Somani. In his statement, reproduced in Para (23) on Page 16 of the Order-in-Original dated 6-2-2014, Shri Ajay Kr. Saraff of M/s. Saraff Jewellers has confirmed to have supplied the gold bars made out of jewellery, purchased by him. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervations would apply to the present facts, we enquired of the Revenue of its stand in respect of the applicability of the above principle to the present facts. Mr. Sethana, Learned Counsel for the Revenue responded by stating that it will not apply to the present facts as it does not deal with Section 123 of the Act. It is submitted that in terms of Section 123 of the Act, the burden is upon the respondent and that has to be discharged up to the hilt. We are unable to understand the above submission. Section 123 of the Act, statutorily imposes a reverse burden of proof i.e. not upon the person (Revenue) who assert that the gold in possession of the respondent No. 1 is smuggled gold but on the person (Respondent No. 1) who is found in possession of goods notified under Section 123 of the Act. However, this reverse burden of proof does not do away with the manner of discharging the burden of proof. Thus, the manner of discharging the burden of proof by shifting of the onus would be as applicable to all other civil proceedings. Mr. Sethna, placed reliance upon Nizam Institution of Medical Sciences v. Prasantha S. Dhananka Others - (2009) 6 SCC 1 in particular, paras 77 and 78 there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely brought to the notice and vide letter dated 30.09.2020, the said receipt was produced. Thus it is clear that the relevant document was provided prior the show cause notice could be issued. The adjudicating authority has presumed the aforesaid invoice issued by M/s. Anil Galai Centre to be fake and manipulated only for the reason that Shri Anil Kadam despite opportunity escaped himself to tender his statement under Section 108 of Customs Act, 1962. On the contrary, I observe that pursuant to the summons, Shri Anil Kadam authorized his brother Shri Sunil Kadam to appear before the authority along with his own affidavit acknowledging the issuance of the said invoice/bill. I also observe that the officers investigated Shri Sunil Kadam but they did not still record his statement except mentioning the outcome of initial investigation from Shri Sunil Kadam in the letter dated 29.10.2020 as was issued to Shri Anil Kadam, still requiring Shri Anil Kadam only to appear for further investigation on 02.11.2020 itself. I also observe that this letter never reached Shri Anil Kadam as it was dispatched on 02.11.2020 i.e. on date when Shri Anil Kadam was asked to appear. Hence, there was no p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is held to have been rejected on the basis of assumptions and surmises. In the absence of any evidence by the department but a reasonable corroborative evidence by the appellant that the gold bar in his hand was the melted gold out of his joint family entire jewellery. I hold that the gold in question is not proved to be the smuggled gold of foreign origin. Mere purity thereof being equivalent to the purity of foreign gold is wrongly held to be the criteria to hold the melted gold as the gold of foreign origin. Investigation rather is observed to be faulty. 12. I also observe that the purity and value of gold bar as was detained from appellant under Panchnama dated 18.09.2020 was also got examined by the Government approved valuer on 14.10.2020 who determined the weight of gold bars as 999.800 grams as contrary to 999.940 grams. However, with the purity of 99.5% as contrary to 99.8% as has been acknowledged not only by M/s. Anil Galai Centre but also by M/s. New Satyam Tounch Centre, thereby causing difference of 0.14 grams of the gold. The examination by government approver was got done in the absence of the appellant. Department has produced nothing to support t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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