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TMI Blog2023 (11) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... HON'BLE MR. JUSTICE YASHWANT VARMA And HON'BLE MR. JUSTICE RAVINDER DUDEJA For the Petitioner : Mr. Aman Lekhi, Senior Advocate with Mr. Ujjwal Sinha, Mr. Aniket Seth, Mr. Subas Acharya, Mr. Akash Agarwalla, Mr. Harsh Raj Singh, Advocates For the Respondents : Mr. Aniruddha Deshmukh, Senior Standing Counsel for DRI/R-1 with Mr. Shaurya Kuthiala, Advocate. Mr. Harpreet Singh, Senior Standing Counsel for R-2 with Mr. Jatin Kumar Gaur and Mr. Gurpreet Singh Gulati, Advocates ORDER 1. The instant writ petition assails the validity of a Seizure Memo dated 19 January 2023 as also a Show Cause Notice SCN dated 17 July 2023 in terms of which the respondents have called upon the petitioner to show cause why the gold jewellery and ornaments weighing approximately 20,756 grams should not be confiscated. 2. As would be evident from the record, the seizure came to be effected on 19 January 2023 and it is only thereafter and on conclusion of a detailed investigation that the impugned SCN has come to be issued. 3. Assailing the validity of the SCN, Mr. Lekhi, learned senior counsel has contended that as would be manifest from the tenor of that notice, the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nchnama dated 19.01.2023 with respect to recovery of 20,756.3 grams of gold Jewellery/Articles (18035.26 grams manufactured from foreign origin gold bars and the gold jewellery total weighing 2721.04 grams used for the concealment of gold jewellery/articles manufactured from foreign origin gold bars), Panchnama dated 19-01-2023 with respect to recovery of 11,224.4 grams of gold Jewellery/Articles manufactured by foreign origin gold bars and gold cut piece 2818.5 grams having foreign marking and Panchnama dated 19-01-2023 with respect to recovery of 19 gold coins/bars having gross weight 450.25 grams foreign marking along with the voluntary statements tendered by the concerned persons and on the basis of other evidence brought on record and discussed above, the modus-operandi, facts of the case and role of the concerned persons are discussed here as under. It appears that- I. A conspiracy has been hatched by Sh. Barat Shantilal Shah for dealing in the purchase and sale of smuggled gold of foreign origin and also converting purchased smuggled gold into gold jewellery/articles and selling them to local traders in Delhi; II. Foreign-origin gold having foreign markings are smu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilal Shah received smuggled gold bars having foreign markings from Sh. Manish Kumar and Sh. Naresh Kumar in a hotel room in Delhi which was telephonically booked by Sh. Bharat Shantilal Shah. Sh. Bharat Shantilal Shah also procured smuggled gold bars/cut pieces having foreign markings in Delhi from Sh. Manish Kumar and Sh. Naresh Kumar for supply of the same to local Jewellers in Delhi. Sh. Bharat Shantilal Shah also used to manufacture gold jewellery from the smuggled gold bars having foreign markings in Mumbai procured by him from some suppliers and thereafter used to supply these gold jewellery/ articles to local jewelers in Delhi with the help of Sh. Subhash Tukaram Karan. Sh. Sanjay Ram used to assist Sh. Bharat Shantilal Shah and Sh. Subhash Tukaram in sale of the gold jewellery/articles made/manufactured from smuggled foreign origin gold to local buyers in Delhi. Tickets for the journey undertaken by Sh. Subhash Tukaram used to be booked by Sh. Bharat Shantilal Shah through Mumbai based travel agent named Aashit. Sh. Bharat Shantilal Shah used to collect all payments with respect to sale of gold jewellery/articles made/manufactured out of smuggled gold b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laws are formulated and incorporated from time to time in Foreign Trade Policy announced under Section 5 of Foreign Trade (Development and Regulation) Act, 1992. Further, under Section 11 of the Foreign Trade (Development and Regulation) Act, 1992, no export or import shall be made by any person except in accordance with the provisions of the Foreign Trade (Development and Regulation) Act, 1992, the rules and orders made there under and the Foreign Trade Policy for the time being in force. 103.1 In view of the above, it appears that the provisions of the Foreign Trade (Development and Regulation) Act, 1992, provisions of rules and orders issued under the said Act and the Import Policy regime under Foreign Trade Policy as applicable during the relevant time are the statutory provisions of law of import, except to the extent where the application of the Foreign Trade (Regulation) Rules, 1993, made under Section 19 of the Foreign Trade (Development and Regulation) Act, 1992 has been exempted under the Foreign Trade (Exemption from Application of Rules in certain cases) Order, 1993, made under Section 3 read with Section 4 of the Foreign Trade (Development and Regulation) Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by an eligible passenger, hence, the gold of foreign origin seized in the instant case squarely falls well within the definition of Illegal import as defined under Section 11 (A) (a) of the Customs Act, 1962. 103.6 And, whereas, on the basis of the evidences brought on record, it appears that the seized gold bars/cut pieces of smuggled gold and gold bars/ gold cut pieces used in the manufacturing of gold Jewellery did not pass through the regular and legal channels of baggage , customs airport , customs area and customs port as defined under section 2(3), 2(10), 2(11) and 2(12) respectively of the Act. It also follows from the evidences discussed herein that no Bill of entry, as defined under Section 2(4) of the Act ibid was filed and no examination (as defined under section 2(17) of the Act) in respect of the goods , as defined under section 2(22) of the Act ibid, was done. Consequently, no assessment, as defined under section 2(2) was done and hence no duty, as defined under section 2(15) was paid. xxx xxx xxx 103.9 And, whereas, gold is a restricted item for import. It appears that a passenger has to overcome statutory disabilities to import gold as a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were illegally and illicitly imported in contravention of the prohibition/ restrictions/ regulations imposed during the relevant time issued by the Central Government. Hence, the smuggled gold bars totally weighing 12,000 Grams, and gold cut pieces 2818.5 Grams and gold bars/ gold cut pieces used in the manufacturing of 18035.26 grams gold jewellery/ articles (excluding the gold jewellery totally weighing 2721.04 grams used for the concealment of gold jewellery/ articles and carried under two invoices no. SG-460 dated 17.01.2023 and SG-160 dated 18.01.2023 out of total gold jewellery/articles i.e., 20,756.3 grams recovered from Sh. Subhash Tukaram Karan) 11,224.4 grams of gold Jewellery, and 19 gold coins/ bars having gross weight 450.25 grams having foreign marking recovered from the shop premises of M/s Khandelwal Chain CO. which were illicitly and illegally imported by the unscrupulous person(s), tantamount to 'prohibited goods as envisaged under Section 2(33) of the Customs Act, 1962. xxx xxx xxx Proposal for Confiscation and penalty 110. And, whereas, from the facts of the case brought on the record above, it appears that the seized gold bars, gold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Borivali (West), Mumbai- 92, (ii) Sh. Manish Kumar S/o. Sh. Nag Raj, R/o 564, Haveli Vass, Koselo, Pali, Rajasthan 306708; are hereby called upon to Show Cause to the Pr. Commissioner of Customs(Preventive), New Custom House, Near IGI Airport, New Delhi-110037 as to why: I. 07 gold bars of foreign origin having foreign marking collectively weighing 7,000 grams having tariff value of Rs. 3,49, 11,660/- (Rupees Three Crore Forty Nine Lakh Eleven Thousand and Six hundred sixty only) recovered from the possession of Sh. Manish Kumar under Panchnama dated 19.01.2023 and seized vide Seizure Memo dated 19-01-2023 should not be confiscated under Section 111(b) and Section 111 (d) of the Customs Act, 1962; II. the Indian currency amounting to Rs. 1, 17,590/- recovered and seized from the possession of Sh. Manish Kumar should not be treated as monetary consideration for transportation/delivery of gold bars from Chennai to New Delhi and should not be confiscated under Section 121 of the Customs Act, 1962; III. the seized packing and concealing material used for packing and concealing of the seized gold bars should not be confiscated under Section 118 and Section 119 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24.4 grams having total tariff value Rs. 5,38,68,684/- (Rupees Five Crore Thirty Eight lakh Sixty Eight Thousand Six Hundred Eighty Four only) recovered from the shop premises of M/s Bikaner Jewellers 1170, Second Floor, Kucha Mahajani, Chandni Chowk, Delhi- 110006 under Panchnama dated 19.01.2023 and seized vide Seizure Memo dated 19.01.2023 should not be confiscated under Section 111 (a)/(b) and Section 111 (d) of the Customs Act, 1962 as Sh. Bharat Shantilal Shah has claimed himself as the owner of the said gold jewellery and the same has been admitted by Sh. Pawan Soni S/o Sh. Bhanwar Lal Dhupar, M/s Bikaner Jewellers; III. the seized packing and concealing material used for packing and concealing of the seized gold should not be confiscated under Section 118 and Section 119 of the Customs Act, 1962; 7. On a due consideration of the aforesaid passages as appearing in the SCN, we find ourselves unable to sustain the submission of Mr. Lekhi of the same being indicative of the respondents having predetermined the entire issue. As would be evident from a close reading of the aforesaid recitals, the same clearly appears to be based on a tentative view and conclusion that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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