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TMI Blog2024 (3) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in facilitating the purchase of smuggled gold from unknown person for a paltry commission of Rs.2,000/- per kg. It is further found that the statement of Mr. B. Suresh is not admissible for denial of cross-examination and accordingly, the same is inadmissible in terms of Sec 138B of the Act. The appellant/claimant Mr. PVMJ Rao has lead cogent evidence with regard to availability of stock, evidence of conversion of old gold ornaments to gold bars and pieces through refinery at Narasaraopet and the said refiner has also confirmed melting of old gold jewellery and thereafter, refining the gold and delivering gold bars and pieces to the appellant - further, in view of the evidence led by the appellant, they have discharged the onus under Sec 123 of the Act as to the licit source of the gold in question. The appellant Mr. P.V.M. Jagannadha Rao is held entitled to receive back the gold, and if the same is already disposed of by the department, shall be entitled to receive the sale proceeds of the same with interest as per Rules. All penalties also stand set aside - the impugned order set aside - appeal allowed. - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) Shri M.V.S. Prasad, Advoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J Rao and his son Shri Venkatesh. They had gone to Coimbatore on instructions of Mr PVM J Rao on 08/03/2020, carrying cash of Rs.93 lakhs (Rs.45 lakhs by VK Kumar and Rs.48 lakhs by TP) by bus. On reaching Coimbatore they visited the shop of Kubera bullion in Raja Street and purchased gold from a person named B. Suresh by giving him cash carried by them. Then they proceeded to a refinery/Bhatti around 13:30 hours, where they got the purchased gold melted with the addition of 3.660 gm silver. On 09.03.2020 itself they both booked their return ticket by bus from Coimbatore to Vijaywada. 4. To find the exact nature of the yellow coloured metal bars and pieces the officers called Shri D. Krishna, approved jewelry valuer to the DRI office at Nellore, who examined all the bars and pieces of the yellow metal recovered and issued certificate dated 10/03/2020, stating as follows a) Mr VKK: one bar, weight 954.480 grams, purity 99.9 and 4 pieces total weight 49.680 gm, purity 99.9, totalling 1004.16 gms b) Mr TP: one bar weight 1147.360 grams purity 99.9 and 5 small pieces of gold totally weighing 4.850 gm, purity 99.9, totalling 1152.21 gms. c) Grand total weight 2156.370 gms. 5. When the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.18 gm. The refinery, similarly, handed over one bar and small pieces, totalling 1152.210 gm to Mr TP. On receiving the gold, they wrapped it in a magazine paper and secured with rubber band and kept in the white coloured cloth pouch, which was tied around their waist. They paid Rs.6,802/- melting charges. On the same day evening, they boarded the bus Kallada travels, which runs from Coimbatore to Vijaywada. Further stated that he was getting monthly salary of Rs.15,000/- and Mr TP was getting monthly salary of Rs.10,000/- from their employer. Further, he was to get additional Rs.1,000/- for this activity. They knew that carrying of gold without valid documents is an offence and they have done the same to meet out their financial burden. Further stated that they purchased gold from Coimbatore, as it is cheaper by about Rs.30,000/- per KG. They purchased gold on behalf of their owner, which would be used for making ornaments to be sold to the customers. On being asked about the origin, they stated that the seized gold was remelted from smuggled foreign origin gold. They only knew one person Mr B. Suresh of Kubera bullion, who gave them the gold in exchange of cash. 8. As both Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lers, Narasaraopet on 17.03.2020 under panchanama and no incriminating documents or things were found. Mr. P.V.M. Jagannadha Rao, by his letter dt.23.03.2020 sent by email to Revenue, stated that the seized gold from Mr. V. Kranti Kumar and Mr. TP belongs to their firm. In response to summons (Covid period), he appeared before the officers on 23.06.2020 and his statement was recorded, wherein, he inter alia stated, that he is partner of M/s Venkateswara Jewellers and his son Mr. P. Venkatesh is his other partner. The firm was started in October, 2017 and they were in the business of purchase and sale of gold ornaments. They also purchase gold on some occasions. They have stock of gold ornaments valued around Rs.95 lakhs and as some ornaments in stock were outdated, he got these ornaments melted into gold bars weighing 2156.370gms from a refinery. Since, no immediate buyers were available in Narasaraopet and the gold rate was less when compared to prices in other places, he contacted his friend, who was in gold business at Coimbatore, who advised him to bring the gold to Coimbatore and assured that he will assist in sale of the same at good price. Accordingly, on 08.03.2020, he sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2020 for sending the ornaments to M/s Gurudatta Bullion for needful. The difference in the gold jewellery issued and received back is due to removal of impurities pursuant to melting and also other alloys like Copper and Silver contained in the gold ornaments. He further stated that the purity of gold received from the refinery is ranging from 98% to 99%. On specific query, he stated that he handed over the gold comprising of bars and pieces totally weighing 2.150kgs approximately to his employees on 08.03.2020 for the purpose of sale at Coimbatore. He had given them the copy of his GST registration certificate. He was of the view that he will raise the sale invoice once the transaction was settled. However, due to unforeseen circumstances, gold could not be sold at Coimbatore. So he had asked his clerks to return with gold to Narasaraopet. He did not know M/s Kubera Bullion, Coimbatore or any person of the said firm. He categorically denied the averment/statement given by his employees Mr. V. Kranti Kumar and Mr. TP on 10.03.2020, nor he had given any cash to his said clerks for purchase of gold. Further, he stated that he neither knows Mr. Suresh Babu of M/s Kubera Bullion nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old, he also gives small slips of weighment. He charges Rs.3/- per gram for purification of gold for which he does not issue any bill/invoice. Further, he stated that during February, 2020, about 1kg of gold ornaments were given by Mr. P.V.M. Jagannadha Rao, which he converted into remelted gold and returned to him. In the month of March also he received approximately 1.3kg of gold ornaments for melting purification and within two days, he gave him approximately 64gms of ornaments for purification. On being questioned, he stated that he does not maintain any written records of his transactions as regards receipt and delivery. He also stated that out of 1300gms of gold ornaments, he approximately returned 954gms of pure gold to Mr. P.V.M. Jagannadha Rao. Further, in respect of 64gms of ornaments received, he delivered 54gms of pure gold. For this work, he received around Rs.7,000/- as remuneration. On being asked as to how he could make 600gms pure gold bar when he had only 500gms of mould or dye, he replied that in 500gms mould dye, extra 100gms can be poured which helps in making the 600gms gold bar; if further more quantity is poured, it will spill out. On being shown the deliver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner (Appeals), who vide impugned order confirmed the OIO by rejecting their appeals. 15. Being aggrieved, the appellants are before this Tribunal. 16. Assailing the impugned order, learned Counsel for the appellants, inter alia, stated that M/s Venkateswara Jewellers, Narasaraopet is a partnership firm of father Mr. P.V.M. Jagannadha Rao his son Mr. P. Venkatesh. Mr. P.V.M. Jagannadha Rao was not in a very good health. Further, his son was interested to go abroad to pursue further studies in Australia and had cleared the IELTS examination. Accordingly, he was in need of funds of around Rs.50 lakhs. So, he decided to get old stock of gold jewellery coverted and accordingly, in the normal course of business, they sent the old jewellery to the refiner M/s Gurudatta Bullion and received back the purified gold bars and pieces. The fact of melting of old ornaments and converting to gold bars and pieces has also been supported by the refiner Mr. D. Vijay Kumra of M/s Gurudatta Bullion. As the appellant Mr. P.V.M. Jagannadha Rao was not getting good prices for refined gold at Narasaraopet, he gave his employees - Mr. V. Kranti Kumar and Mr. T. Prasannanjaneyulu part of the gold, tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old in question was part of their stock in trade. 18. It is further urged that the statements of the two other appellants namely Mr. VK Kumar and Mr. TP were recorded immediately at the time of interception and seizure and both the persons had signed on the dictated statements by the officers. Both of them were under undue influence and duress during the relevant time. Further, both the persons, at the first opportunity of there being some ease in the Covid pandemic situation, have retracted their statements by sending email to the Customs Authority, followed by duly signed paper copy which has been received by the Revenue. Such statements were also not accepted by the owner/claimant Mr. PVMJ Rao, at the very first instance. 19. Learned Counsel further relies on the ruling of the Apex Court in the case of Vinod Solanki vs UOI in Civil Appeal No. 7407/2008, wherein it has been held a person accused of commission of an offence is not expected to prove to the hilt that confession had been obtained from him by any inducement, threat or promise by a person in authority. The burden is on the prosecution to show that the confession is voluntary in nature and not obtained as outcome of thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned, it is urged that the appellant/claimant has discharged the onus by submitting business records including bank statement and copy of returns filed with GST department and Income tax department, which supports the stock position of the appellant with respect to gold/gold jewellery. Thus, the appellant has discharged the onus upon him under Sec 123 of the Customs Act as to the source of the gold in question. 22. Opposing the appeals, learned AR for Revenue relies on the impugned order. He urges that both the appellants/carriers Mr. VK Kumar and Mr. TP had stated, at the very first instance upon interception and seizure, that they had carried cash with them to Coimbatore and had purchased gold by paying cash through Kubera Bullion, Coimbatore, which facilitated the purchase of gold without any invoice. This fact has been supported by the person in charge of the Kubera Bullion Mr. B. Suresh, in his statement recorded under Sec 108 of the Act. Thus, the fact of purchase of gold from Coimbatore on payment of cash stands corroborated. He further urges that the transaction in gold without issue of proper invoice/challan itself indicates the smuggled nature of the gold/goods. According ..... X X X X Extracts X X X X X X X X Extracts X X X X
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