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TMI Blog2023 (9) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, perhaps they would have revealed as to the basis for their conclusion as to the source of the goods in question, but in any case, neither the mahazar nor even the Assayers report give any proof that any of the gold jewellery involved had any mark as to their foreign origin and hence, the burden under Section 123 ibid. remains on the Revenue. On going through the documents placed on record, the Order-in-Original and the Show Cause Notice, it appears to us that the Department has not pursued the investigation after issuing the Show Cause Notice and the only effort seems to be that since no valid import documents could be produced by the first appellant-person carrying the gold, the same were deemed to be smuggled into India - It was not the intention of the Government to bring back the Gold (Control) Act albeit by a backdoor entry, by notifying gold under Section 123 ibid. The Revenue, therefore, is required to prove that the gold jewellery were of smuggled nature, even when it is notified under Section 123. The officers of the Department had no reasonable belief that the gold jewellery seized were smuggled and therefore, they have not discharged their primary responsib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s - impugned order set aside - appeal allowed. - HON BLE MR. P. DINESHA, MEMBER (JUDICIAL) And HON BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL) Shri N. Muralikumaran, Senior Advocate for the Appellant Shri S. Balakumar, Assistant Commissioner for the Respondent ORDER Order : [Per Hon ble Mr. P. Dinesha] These appeals arise out of the common adjudication/Order-in-Original No. 90858/2022 dated 15.06.2022 passed by the Commissioner of Customs, Chennai-IV and since the facts and the apparent issue are identical, the same are taken up for common disposal, for convenience. 2.1 Brief facts, as could be gathered from the Show Cause Notice and the impugned Order-in-Original, are that based on specific intelligence received by the Directorate of Revenue Intelligence (DRI), Chennai, Mr. R. Mahaveer Pipada (the first appellant herein) was intercepted at Kamaraj Domestic Terminal of Chennai Airport when he was about to board the flight no. SG 3241, bound for Cochin on 19.03.2013. 2.2 It appears that on preliminary enquiry by the Officers in the presence of independent witnesses, the first appellant, who was travelling to Cochin with his son namely Mr. Sanja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old jewellery from the said operators after paying a carrier commission of around Rs.140/- to Rs.160/- per gram, which was thereafter sold to different jewellery shops locally in Chennai and other cities. 3.1.2 During investigation, it appears that the DRI wanted to know as to when he received and who had ordered the jewellery which was seized at the Airport, to which this appellant appears to have replied as to having received the same around previous week in different quantities and that the same was being carried to Cochin at the instance of Mr. Sebi and Mr. Jose of M/s. Josco Jewellers to be shown to their chairman. To a query as to the suppliers of the gold jewellery in Singapore, the first appellant appears to have revealed the names of Kim Leon, Simon and Chia of G J Jewellery as his major contacts in Singapore from whom the gold jewellery was procured. 3.1.3 It appears that the first appellant had also been asked about the modus operandi of smuggling the gold jewellery into India, his alleged reply to which has also been reproduced at paragraph 5 of the Show Cause Notice. He was also asked about his last visit to Singapore, to which he appears to have indicated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered from his residential premises showing the details of gold jewellery smuggled into India, to an extent of about 200 to 250 kgs. of gold jewellery. In respect of sale of 137 chains weighing 1385.800 grams to M/s. Saravana Stores Thanganagai Maligai, T. Nagar, Chennai on 15.03.2013 and sale of gold chains weighing 847.630 grams to M/s. Saravana Stores Thanganagai Maligai, T. Nagar, Chennai, he appears to have informed that he received payments in the form of gold bars from them the next day, for which no bills were raised by him. 6.2 As an offshoot of the above statement, it appears that there were simultaneous searches on 27.03.2013 at the business premises of various buyers to whom this appellant is alleged to have sold the Singapore gold jewellery. During search, it appears that the Revenue has recorded the statements of the concerned persons of the said business entities and during search, the Revenue also appears to have seized gold jewellery of different weightages from those business entities. 7. It appears that the first appellant-Mahaveer retracted his earlier statement vide letters dated 29.03.2013 and 15.05.2013 thereby also contending that the gold jewellery of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged Burma Bazaar operators, who is alleged to have procured gold jewellery for Mr. Mahaveer for which he got a commission of about Rs.1,25,000/- from Mr. Mahaveer, for each of his trips to Singapore. It is a fact borne on record that the said Mr. Praveen Kumar appears to have later on retracted his earlier statement by his subsequent statement dated 25.07.2013. 9. From the above statements, it appears that the Revenue believed that the appellants had violated the provisions of Foreign Trade Policy (FTP) and that the goods imported were liable for confiscation in terms of Sections 111(d) and 111(l) of the Indian Customs Act. 10. Consequent to the above, a common Show Cause Notice dated 16.09.2013 was issued, inter alia, to these appellants to show cause as to why: - 8.452 kgs. of seized 22 ct. Singapore gold jewellery should not be confiscated under Sections 111(d) and 111(l) ibid. Penalty under Section 112 ibid. should not be imposed. 2.409 kgs. of seized 22 ct. Singapore gold jewellery should not be confiscated under Sections 111(d) and 111(l) ibid. 4.627 kgs. of gold bars/bits seized from the residential premises, should not be confiscated under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation of the seized 22 ct. gold jewellery. (vii) At paragraph 54 of the Show Cause Notice, the DRI has clearly admitted that neither the quantity of smuggled gold jewellery nor the sale proceeds of the same were readily available for seizure; even the date wise details of the smuggled gold jewellery was not available, as reflected at paragraph 54 of the Show Cause Notice. (viii) The appellants requested for enabling them to cross-examine the so-called witnesses, officers, etc., who had signed all the mahazars, giving clear reasons as to why their cross-examination was necessary. 12. The adjudicating authority having considered the replies offered by the appellants, however, vide impugned Order-in-Original No. 90858/2022 dated 15.06.2022 proceeded to conclude the adjudication thereby confirming the demands proposed in the Show Cause Notice. The demands which are relevant to the present appeals, as confirmed vide the impugned Order-in-Original, are as under: - Confiscation of the seized 8.452 kgs. of smuggled 22ct. Singapore gold jewellery, valued at Rs.2,35,21,916/- under Section 111(d) and Section 111(l) of the Customs Act, 1962. Confiscation of the seized 2.409 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igin, which were seized. None of the gold jewellery had any marking to indicate that they were of foreign origin. Mr. Mahaveer Pipada admitted that they were smuggled through various airports over a period of time and the purchases were made in cash. One Mr. Mohan Achari, Assayer, who was there, certified the quality and origin of the assorted gold jewellery on the spot (page nos. 15 and 16 of the Annexure to the Show Cause Notice) that they were of foreign origin. On 19.03.2013 they were seized under reasonable belief that the same were liable for confiscation under Section 111 of the Customs Act. But however, his expertise to declare as to the foreign origin and the method used to determine, is not forthcoming nor has his certificate indicated the very basis of his conclusion as to any marking to the effect on any of the gold jewellery and nor does he specifically admit as to the presence of any marking as to the origin. On the same day, the premises of M/s. Mundhra Jewellers situated at No.20, Thulasingam Street, Sowcarpet, Chennai 600 079 was searched and 3 gold bars of 1 kg. each of 9950 purity were seized. Simultaneous search was also conducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as confiscation of the above are illegal. Insofar as the seizure of jewellery weighing 8.5 kgs. from Mr. Mahaveer Pipada in the airport is concerned, the only document that is relied upon is that of Mr. Mohan Achari, Assayer, who certified them as foreign jewellery. Similarly, as far as the seizure of 2409.1 gms. of assorted jewellery from the house of Mr. Mahaveer Pipada is concerned, in the so-called certificate issued by Mr. Lal Chand Jain, the word imported is used. It is unknown as to what is the qualification and competence of Mr. Mohan Achari and Mr. Lal Chand Jain in testing and declaring a jewellery as Indian made and foreign. Admittedly, there were no such marking on any of the gold jewellery. What was the methodology adopted to arrive at such a conclusion and whether any known processes and methodologies have been adopted to declare as foreign-made are not stated anywhere and a specific request to cross-examine them, setting out the reason for cross-examination by communication dated 25.02.2021 as well as by communication dated 26.03.2021, were denied, thereby depriving the appellant to prove that Mr. Mohan Achari and Mr. Lal Chand Jain are not only incompet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re seized by the Revenue were of foreign origin, nor did they contain any marking to that effect. When the gold did not have the foreign marking the burden of proof will not shift to the appellants. In this regard, reliance is placed on the order of CESTAT, Kolkata in Daleep Kumar Verma (supra) [paragraph 19.8] When it is admitted that the seized goods were purchased from indigenous sources, the provisions of Section 123 of the Customs Act will not apply, which stand is supported by the order in Daleep Kumar Verma (supra) [paragraphs 19.4, 19.5] 15.2 Ld. Senior Counsel concluded his arguments by placing reliance on many decisions of various higher judicial fora and also many orders of co-ordinate Benches of the CESTAT. 16.1 Per contra, Ld. Assistant Commissioner relied on the findings of the lower authorities. He would also contend that the Revenue had entertained a reasonable belief that the gold jewellery in question was smuggled into India based only on the voluntary statement of Mr. Mahaveer Pipada, the appellant no. 1 herein. 16.2 He would take us through various portions of the findings in the impugned order to highlight the modus operandi of the first appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19.10.2012 (paragraph 65 of the Order-in-Original). 17.5 He drew our attention to the statement of the Proprietor of M/s. I.K. Jewellers, Mr. I. Jayanthilal, who had categorically indicated that they had furnished, at the time of search and seizure by the DRI itself, the invoices of M/s. Shri Vasavi Gold and Bullion (P) Limited bearing invoices No. 446 dated 30.05.2012, Invoice No. 447 dated 30.05.2012 and Invoice No. 861 dated 20.07.2012, from whom they had purchased the imported gold ornaments; but under the threat of arrest and coercion by DRI officials, they had been forced to admit as if the gold jewellery were purchased from the appellant no. 1; they had been misguided by the searching officials that if a statement as dictated by them is made, they would not be put to any problems. (paragraph 67 of the impugned Order-in-Original) 17.6 Statement of one Mr. Prapanna Kumar of M/s. Nathella Sampath Jewellery Pvt. Ltd., Chennai was referred to wherein, inter alia, the said person has admitted that the gold jewellery purchased had suffered local tax and that there was no material on record to support, in the Show Cause Notice that he received smuggled Singapore gold jeweller ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since 1998 and hence, it is necessary to match / correlate the gold jewellery vis- -vis the alleged smuggling activity. Moreover, neither in the mahazar nor anywhere else has the Revenue brought out any foreign marking on any of the gold jewellery, to allege that they were of foreign origin; that other than bullion, foreign make marking can never be seen or found on jewellery and therefore, Assayers have clearly misled the DRI. Hence, had they cross-examined them, then the truth would have come to light, not only as to the method of identifying / determining the origin of the same, but also about their origin as well. 18. We have considered the rival contentions carefully and we have also perused the impugned Order-in-Original. We have also gone through the various decisions relied upon by the Ld. counsel during the course of arguments. 19. The issue in the appeals on hand revolve around the interpretation of Section 111(d) and (l) of the Customs Act, 1962, which authorizes confiscation. In this regard, the following legal provisions are also required to be looked into, namely, Sections 2(22), (33) and (39), Section 111(i) and (p), Section 112, Section 120, Section 121 and Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable, - (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty [not exceeding the value of the goods or five thousand rupees], whichever is the greater; [(ii) in the case of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten per cent. of the duty sought to be evaded or five thousand rupees, whichever is higher : Provided that where such duty as determined under sub-section (8) of section 28 and the interest payable thereon under section 28AA is paid within thirty days from the date of communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent. of the penalty so determined;] [(iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to gold, [and manufactures thereof,] watches, and any other class of goods which the Central Government may by notification in the Official Gazette specify. 20.1 Section 111(d) ibid. authorizes confiscation of improperly imported goods contrary to any prohibition imposed by or under this Act or any other law for the time being in force. 20.2 Section 111(l) ibid. authorizes confiscation of any dutiable or prohibited goods which are not included or are in excess of those included in the entry made under this Act, or in the case of baggage, in the declaration made under Section 77. 20.3 Two things: import and improper to establish the import which was improper. Now, therefore, Revenue has to satisfy that the gold jewellery had foreign mark, they were being improperly imported and hence, Section 111 is applicable. 20.4 Section 112 ibid. authorizes levy of penalty for improper importation of goods. 20.5 Section 123 ibid. talks of burden of proof in certain cases wherever goods are seized under the Customs Act in the reasonable belief that they are smuggled goods. 21.1 We have very carefully analysed the findings in the impugned order and also copy of the maha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments placed on record, the Order-in-Original and the Show Cause Notice, it appears to us that the Department has not pursued the investigation after issuing the Show Cause Notice and the only effort seems to be that since no valid import documents could be produced by the first appellant-person carrying the gold, the same were deemed to be smuggled into India. Going by the ratio of the decisions of various higher judicial fora, the requirement of law is that the Revenue needs to prove the smuggled nature of the goods. It was not the intention of the Government to bring back the Gold (Control) Act albeit by a backdoor entry, by notifying gold under Section 123 ibid. The Revenue, therefore, is required to prove that the gold jewellery were of smuggled nature, even when it is notified under Section 123. In the case of Union of India and anor. v. Imtiaz Iqbal Pothiwala ors. [2019 (365) E.L.T. 167 (Bom.)], the Hon ble High Court has observed as under: - 2. This appeal was admitted on 28th June, 2007 on the following substantial questions of law :- (a) Whether in the facts and circumstances of the case and in law, the Customs, Excise and Service Tax Appellate Tribunal (th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 8. We shall now take up for consideration, the substantial questions of law in seriation, as under :- (A) Re. Question (a) :- (i) This question essentially proceeds on the basis that as the respondent had made a confessional statement under Section 108 of the Act, it is admissible as evidence and warrants, confirming the show cause notice. This particularly, in the absence of the party being able to explain away the confession made. Even if we accept that a confessional statement, can be admitted as evidence, it must contain a confession by the deponent to form the basis of confirmation of the show cause notice. (ii) We noted that statements of respondent No. 1 were recorded on 9th March, 2000, 15th March, 2000, 22nd March, 2000, 30th March, 2000 and 27th April, 2000. (iii) We specifically called upon the Learned Additional Solicitor General to show us any confessional statement made by respondent No. l and/or other respondents i.e. Driver, E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the fact that the 575 seized gold bars were secreted in a specifically made cavity in jeep. This, according to him, would be done only in case the gold so secreted, was smuggled gold. Further, it is submitted by the Revenue that on 8th March, 2000, neither the respondent No. 1 and/or his driver (Mr. Anis Ashraf) whose statement was recorded, could produce any documents in support of the legal possession of the gold. (vi) (vii) The Learned Additional Solicitor General drew our attention to various statements of respondent No. 1 under Section 108 of the Act, which indicated that he was not filing income-tax return, so much so he is unable to explain the source of the funds to purchase the gold. This for the reason that though he states that the money was borrowed, he is unable to state the name of the persons who lent him the money . . Therefore, the principle laid down in R.V.E. Venkatachala Gounder (supra) is applicable to adjudicating proceedings under the Act. By virtue of Section 123 of the Act, the burden to prove that the gold is not smuggled, is on the person found in possession of the gold. Thereafter, the onus keeps shifting. The impugned order hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d invite specifically to Column 3 where reasons for cross-examination of each person have been specifically mentioned. 24.2 From the documents placed on record and the impugned order, it is an undisputed fact that an opportunity to cross-examine any of the persons (73 plus 10 persons) has not been provided for. The Revenue may have difficulty in subjecting their own officials to cross-examination for various reasons, like their subsequent transfers, etc., but however, the important witnesses like the Assayers could have been subjected to cross-examination in order to elucidate the truth, but the same apparently has not been done, nor do we see palpable reasons for rejecting the request for cross-examination, the uncorroborated testimony of such persons cannot be taken on the face value. 24.3 When there is no cogent evidence in support and the sole reliance is on uncorroborated testimony which are not beyond suspicion but amenable to doubts, the only recourse in order to bring out the correct facts / truth is to subject the persons whose statements are relied upon to cross-examination. Hence, we are of the view that when only statements of Assayers, who are not even claimed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewellery. The methodology adopted to arrive at such a determination and as to whether any known processes / methods have been adopted have not been stated. Further, on all the jewellery, there are no foreign markings and hence, there is no reasonable basis to conclude these to be of imported origin. 28. In this context, the burden of proof does not shift to the appellants, but the burden lies on the investigating agency to prove that the seized jewellery were of foreign origin. Judicial Precedents: 29.1 In the case of Pr. Commissioner of Customs (Prev.), Delhi v. Ahamed Mujjaba Khaleefa [2019 (366) E.L.T. 337 (Tri. Del.)], the CESTAT had held as under: - 10. It is seen that there is no foreign marking on the jewellery. Revenue has not placed any proof to substantiate that the jewellery was smuggled into India other than the statement of the passenger. In the facts and circumstances of the case, I find no reason to interfere with the findings of the impugned order which is sustained for the reason mentioned therein. In the result, Revenue appeal is rejected. 29.2 The co-ordinate Kolkata Bench of the CESTAT in the case of Commissioner of Customs (Prev.), Shil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained by various High Courts. In the case of Basudev Garg v. Commissioner of Customs reported in 2013 (294) E.L.T. 353 (Del.), the Hon ble Delhi High Court has held as under: - 10. Insofar as the general propositions are concerned, there can be no denying that when any statement is used against the assessee, an opportunity of cross-examining the persons who made those statements ought to be given to the assessee. This is clear from the observations contained in Swadeshi Polytex Ltd. (supra) and Laxman Exports Limited (supra). Apart from this, the decision of this court in J K Cigarettes Ltd. (supra) clinches the issue in favour of the appellant. In that case, the validity of Section 9D of the Central Excise Act, 1944 was in question. The said Section 9D of the Central Excise Act, 1944 reads as under :- 9D. Relevancy of statement under certain circumstances. (1) A statement made and signed by a person before any Central Excise Officer of a gazette rank during the course of any inquiry or proceedings under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains: - (a) When t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44 interpreted its provisions as under: 12. Bare reading of the above section manifests that under certain circumstances, as stipulated therein, statement made and signed by those persons before any Central Excise Officer of a gazette rank during the course of inquiry or proceedings under this Act can be treated as relevant and taken into consideration if under the given circumstances such a person cannot be produced for cross-examination. Thus, this provision makes such statements relevant for the purposes of proving the truth of the facts which it contains, in any prosecution for an offence under the Act in certain situations. Sub-section (2) extends the provision of sub-section (1) to any proceedings under the Act other than a proceeding before the Court. In this manner, Section 9D can be utilized in adjudication proceedings before the Collector as well. In the present case, provisions of Section 9D of the Act were invoked by the Collector holding that it was not possible to procure the attendance of some of the witnesses without undue delay or expense. Whether such a finding was otherwise justified or not can be taken up in the appeal. 14. The Division Bench also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exist the noticee would have right to cross-examine the persons whose statements are being relied upon even in quasi-judicial proceedings. 30.3 It is clear from the above that any statement/s which are used against a person, unless such statement/s are subjected to scrutiny in the form of cross-examination by the affected persons / appellants, the same would only remain mere statements lacking any credibility. It is not as though it was impossible for the Revenue to at least subject the Assayers to cross-examination since it is they who have certified that the gold jewellery in question were of foreign make. Other than their statements, there is no other documentary evidence placed on record and hence, it was very much essential in the interests of justice to subject them to cross-examination, which opportunity having been denied to the appellants, we are of the view that their statements / certificates do not inspire any confidence and therefore the same are required to be ignored. 31.1 In the case of Kashi Kumar Aggarwal v. Commissioner of Customs (Preventive), New Delhi [Final Order No. 50387 of 2023 dated 23.03.2023 in Customs Appeal No. 50536 of 2022 CESTAT, New Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 4.687 kg and miscellaneous items of gold weighing 0.742 kg with a purity of 87.5% seized (part of S.No.(i) of the operative part of the Order in original) 34. These gold ornaments were confiscated in the order in original and upheld in the impugned order under sections 111(d), 111(i) and 111(p) read with section 120 of the Customs Act. Section 120 provides that smuggled goods may be confiscated notwithstanding any change in their form. Further, it also provides that where smuggled goods are mixed with other goods in such manner that the smuggled goods cannot be separated from such other goods, the whole of the goods shall be liable to confiscation. 35. It is the case of the department that the seized jewellery was made out of smuggled gold and NOT that it itself was smuggled. There were also no foreign markings on them to show that the jewellery was smuggled. Deepak had no bills or invoices to show legitimate purchase of these ornaments . 36. In his statement, Deepak, said that he got the jewellery made by supplying imported foreign marked, gold to the jewelers. Even if this statement is taken on face value, it does not say that smuggled gold was supplied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant is regarding Burden of Proof as envisaged under Section 123 of Customs Act,1962 . As per this section, the burden of proving that the goods are not smuggled, lies on the person fromwhose possession the goods were seized. For the sake of easy reference, the said section 123 is reproduced below: 19.4. The contention of the Appellant is that the gold bangles and silver bar were not of foreign origin. Section 123 of Customs Act is applicable only to foreign marked gold and silver. Since, there is no foreign mark available on the gold bangles and silver bars seized from the Appellants, the provisions of section 123 is not applicable in this case. 19.7 The Appellants also relied upon the decision in the case of Balanagu Naga Venkata Raghavendra vs CC Vijayawada 2021 (378) ELT 493 (Tri-Hyd), where in it has been held that the burden under section 123 will not shift on the Appellants when the seizure of gold without foreign markings are seized from city. The relevant portion of the order is reproduced below. 14. The confiscation of the gold by the adjudicating authority was set aside by the Tribunal and on appeal by the Revenue the Hon ble High Court of Ker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that they avoid air travel as there is a high risk of being caught. Coupled with these statements was the fact the gold of very high purity. The ratio of this judgment does not apply to the present case and the facts are quite different. 15. In view of the above, we find that the officers of the Department had no reasonable belief that the gold was smuggled and therefore they have not discharged their responsibility of forming reasonable belief under Section 123 without which the burden of proof will not shift to the person from whom the gold is seized. 19.8 In view of the above discussions and the decisions cited above, we hold that the burden under Section 123 of Customs Act, to prove that the gold is not smuggled one, does not lie on the Appellants, in this case. 20. The next ground raised by the Appellants is that they have been denied the right to cross examine the Expert who has given the certificate. The Appellants stated that Shri Akshay Kumar Paul, Goldsmith has given a Certificate dated 17.05.2019 certifying that the 90 pieces of gold were of foreign origin in strip form, based on its purity. They argued that Sh. Akshay Kumar Paul has no expertise to giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o hold the goods to be smuggled ones as noted in the judgments cited supra 32.3 The relevant observations of this Bench in the case of Commissioner of Customs v. Mohammed Ali Jinnah [Customs Appeal No. 40099 of 2020 Final Order No. 40289 of 2023 dated 20.04.2023 CESTAT, Chennai] are as under: - 8. In the absence of evidence on the part of respondent to prove that the gold was legally procured and in view of the fact that the crude gold bars had 999.9 purity, it appeared to be smuggled into India in violation of Foreign Trade Policy 2015 2020 read with RBI Regulations and having been found to be concealed in a bag, a Show Cause Notice dated 21.7.2017 was issued to the respondent by the Additional Director, DRI as to why the crude gold bars should not be confiscated and penalties should not be imposed under the Customs Act, 1962. 27. We therefore proceed to examine the merits of the case. The allegation in the Show Cause Notice is that the gold seized from the respondent is gold smuggled into India without declaring it to Customs for avoiding payment of customs duties. The first issue that requires to be analyzed is whether the gold is of foreign origin. Admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to assail the certificate of assayer. The relevant para reads as under:- 31. The prosecution has examined PW-3 Shri Ramesh Chand Aggarwal, the goldsmith and the valuer who had tested the gold bars allegedly recovered from the possession of the accused. Whether PW-3 Shri Ramesh Chand Aggarwal was possessed of any qualification in the matter of testing gold was liable to be proved by the prosecution. The certificate issued by the PW-3 Shri Ramesh Chand Aggarwal i.e. Ex.PW-1/F does not disclose the method on the basis of which he had tested the gold and had reached to the conclusion that it was gold of 24^ purity. 32. Normally, the test applied for testing gold is furnace test but the same was not applied or resorted to in the present case. There is no evidence on record that PW-3 Sh. Ramesh Chand Aggarwal was possessing any proficiency in the matter of testing gold. The certificate/report Ex.PW-1/F does not contain any data. Whereas the certificate must contain actual data and not mere opinion. Further, the gold of foreign origin has to be proved by the authentic manner. Law is well settled that mere marking cannot be taken as a proof of the gold for origin of the gold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 2011 (268) ELT A109 (SC) to argue that not allowing cross-examination will not be violation of principles of natural justice. These cases are distinguishable on facts. When the evidence relied by the department to prove that the gold is of foreign origin is the certificate issued by assayer, the rejection of request to crossexamine him without giving cogent reasons vitiates the proceedings. 33. As per sub-section (8) of Section 129C of the Customs Act, 1962, any proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purpose of section 196 of the Indian Penal Code, and the Appellate Tribunal shall be deemed to be a Civil Court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973. Thus, the Indian Evidence Act is no stranger to proceedings under the Customs Act. 34.1 Order 6, Rule 2 of the Civil Procedure Code, 1908, states that the pleading shall only contain important facts that must be shown in a concise form. Evidence is a relative term that refers to a connection between two facts: the fact in dispute (factum probandum), or statement to be pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of proof of preponderance of probabilities, we are of the view that the gold jewellery seized could not be proved to be of foreign origin, which the Revenue has not been able to establish beyond doubt. As the gold jewellery seized were not proved to be of foreign origin, the seizure of 4.627 kgs. of gold bars/bits, 3 nos. of 1 kg. gold bars and 10.011 kgs. of admittedly Indian-made gold jewellery as sale proceeds of smuggling is also not in accordance with the law. 36.2 Once the seizure is invalid, all subsequent proceedings and consequent actions are bad in law, as held in the case of Dimondstar Exports Ltd. ors. v. Director General of Income Tax (Investigaton) [(2005) 278 I.T.R. 36]. 36.3 Further, it has to be observed that Section 123, even assuming it is applicable, comes into play only if the ingredients for exercise of power under Section 110 are satisfied, as held in the case of Di Gold Designer Jewellery v. Commissioner of Customs [2021 SCC Online CESTAT 4213]. 37. Investigation has revealed that these 3 kgs. of gold bars seized at the premises of M/s. Mundhra Jewellers were validly purchased by M/s. GR Thanga Maaligai Jewellers Pvt. Ltd. through banking channe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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