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TMI Blog2024 (2) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... ohini, New Delhi. They were travelling from Surat to New Delhi by car along with Shri Pramod and Shri Vishal Dabas on 29.10.2018 during which the officers of DGGI, Vadodara acting upon intelligence, intercepted the car around Vadodara Bharuch toll plaza. Shri Pawan Verma, when asked, informed the officers that he was carrying 1600 grams of Gold with him. The officers of DGGI after carrying out search of the car and of the appellants, so found the sixteen bars of gold wrapped in hanky plus plastic from jeans pant's pocket worn by Shri Pawan Verma and passed on the proceedings to the officers of DRI, Ahmedabad. 1.2 The officers of DRI noticing the foreign make markings on the gold bars held a view that out of sixteen gold bars, seven gold bars appears to be of foreign origin and nine that had markings of MMTC - PAMP appears to be of Indian origin and proceeded to seize the same along with Hyundai Verna car on the premise that the said car was used for transportation and concealment of suspected smuggled gold. The officers further seized mobile phones from the possession of the appellants. 1.3 Shri Salim Daginawala, Gold assayer was called for identification of the metal, its purity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 112 (b) of the Act. 1.7 The Joint Commissioner of Customs adjudicated the show cause notice by which he ordered absolute confiscation of seven gold-bars having market value of Rs. 22,96,000/- seized from the possession of appellant- Shri Pawan Verma holding that the said gold bars had foreign make marking without any purchase details produced are to be held as smuggled ones. As regard, nine gold-bars with the MMTC-PAMP marking held to be of Indian origin and released provisionally, it was held that the same have been used for concealment of seven gold bars of foreign origin and hence liable to confiscation under section 119 of the Act and gave option of redemption fine of Rs. 7,00,000/- in terms of section 125 of the Act. It was further held that eight gold-bars of foreign origin were purchased in the past from Shri Lalaji as admitted in the statements of appellants and hence same are liable to confiscation under section 111(d) of the Act and since the said goods are not available for confiscation, redemption fine of Rs. 21,60,000 was imposed. He further imposed personal penalty of Rs. 10,00,000/- each on both the appellants under section 112 (b) of the Act. The adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stablish that the same were smuggled gold and in any event allegation of purchase of such gold in the past based solely on the statements of appellants dated 30.10.2018 and 01.04.2019 is not tenable and deponents of the said statements having not examined in terms of section 138B of the Act, no reliance can be placed on such statements. Consequently, based on such statements, the case of the department that appellants have purchased smuggled gold fails. Reliance in this regard is placed on the following decisions: Jindal Drugs Pvt Ltd V UOI - 2016 (340) ELT 67 (P&H) J K Cigarettes Ltd V. Collector of Central Excise - 2009 (242) ELT 189 (Del.) 2.3 It was further submitted that had the said statement of the appellants been voluntary, they would not have admitted all sixteen gold bars to be of foreign origin; when admittedly nine out of the sixteen gold bars were released later by the department holding the same to be of Indian origin. It was further submitted that assuming that the seized seven Gold-Bars were liable to confiscation, in view of above submissions, the Commissioner (Appeals) should have set aside the absolute confiscation and should have given an option to the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of foreign origin, that by itself does not establish the smuggled nature of the gold, as import of gold into India is not absolutely prohibited and there is large quantity of gold which is legally imported and is available for sale in the local market and hence merely because the seized gold had foreign markings that itself is not sufficient to infer that the same was smuggled into India. Reliance in this behalf is also placed on the decision in the case of Lalchand D. Kothari v CC - 2001 (136) ELT 525 supra. It can be observed that section 123 would apply where in first place there must be some evidence to form a reasonable belief that the seized gold was of foreign origin. Where foreign markings are not sufficient for arriving at the conclusion that the goods are of foreign origin, there did not exist any evidence to form a reasonable belief that the seized gold was of foreign origin and much less there exist any evidence to form the reasonable belief that the seized gold was smuggled. Reasonable belief cannot be based on suspicion or speculation or merely on the ground that the person from whom seizure was effected was unable to account for the same and that to form reasonabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gin. Further, no other details shown from the statements as to how such gold can be said as foreign origin or smuggled. This shows that statements are not reliable. Moreover, no deponents of the statements have been examined/cross examined by the adjudicating authority in terms of mandate of section 138B of the Act and as such no reliance can be placed on such statements which are not relevant in view of settled legal position in this behalf by the following decisions:- Jindal Drugs Pvt Ltd V UOI - 2016 (340) ELT 67 (P&H) J K Cigarettes Ltd V. Collector of Central Excise - 2009 (242) ELT 189 (Del.) 4.3 It has been held in the above decisions that statements of deponents are not relevant piece of evidence where deponents of such statements have not been examined/cross-examined in terms of section 138B of the Act. In view of above, confiscation of eight gold bars under section 111(d) of the Act and redemption fine so imposed of Rs. 21,60,000/- is not tenable. 4.4 As regards confiscation under section 119 of Customs Act, 1962 upheld in respect of nine gold-bars on the premise that the said gold-bars were obtained without any bill/invoice/bill of entry etc. and were used for conc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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