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TMI Blog2024 (4) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... evidentiary value. It is further found that Revenue has failed to examine their witnesses during adjudication proceedings, as required under section 138B of the Act. Further, the appellant Mr. R. Rajasekhar who has claimed the ownership of the gold has led cogent evidence in the form of his business records and account statements in support of the gold in question. It is further found that such cogent explanation has not been found to be untrue but have been arbitrarily rejected by Revenue. It is also found that the explanation given by these appellants has been corroborated by the statement of smelters/melters both at Jaggayyapet and at Chennai. Accordingly, it is found that appellants have discharged the onus under section 123 of the Act. The impugned orders set aside - appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... tal rectangular bars and one very small piece totally weighing 1000 gms approximately. He also informed that in total, he was carrying approximately 1500 gms of gold in the said two packets. 4. From the packet taken out by Mr. VVRK, one yellow metal rectangular shaped bar and two uneven small pieces were available. On the rectangular yellow metal bar, number "999" was found inscribed. It was informed that the said yellow metal is gold weighing approximately 129 gms (in total). Both the persons also informed that Mr. R. Rajasekhar is their employer, who handed over to them melted gold of 22 ct weighing approximately 140 gms and directed him to hand over the said gold in Chennai to a person named Mr. Jawahar and take delivery of 24 ct gold. Accordingly, he had handed over 140 gms of 22 ct gold and obtained approximately 129 gms of 24 ct gold in the shape of three bars/pieces from them. 5. On being questioned by the officers, they informed that as per the instructions of their employer Mr. R. Rajasekhar, they handed over the cash in Chennai to two persons viz., Mr. Jawahar and Mr. Rajesh and received said gold from them. Further, they did not have any receipt/voucher/bill in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri Nomula Pavan Kumar 2 3 No. of Rectangular gold Bars inscribed with markings "999" and 1 very small piece 1000.46 99.9 3 1 No. of rectangular gold bar inscribed with markings "999" and 2 uneven shaped small pieces 129.00 99.8 6,45,000 (@Rs.5,000 per gram) Sri Vemula Venkata Ramakrishna 1629.46 81,54,802 8. On query by the officers if they were in possession of any documents to show the licit import or purchase of the gold, they stated that they had purchased the same by making payment through cash and were not in possession of any documents to show that the same is licit transport of gold. The officers, as it appeared to them that these persons are carrying gold which appears to be smuggled in nature and as they have reasons to believe that the gold found from these persons is melted gold in order to erase the foreign markings and purchased without valid bills/documents and vouchers and hence are liable for confiscation under Customs Act. The officers also seized the packing material, the newspaper used to wrap and carry the gold and also recovered the following documents: a) Bill No.329 dt.01.12.2020 of M/s Lakshmipathy Thulabaram, Chennai found in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts (22 ct/18 ct) from the stock of M/s Rayapudi Lakshmi Narasimha Rao Son. He directed his employees Mr. NPK & Mr. VVRK to go to Chennai and hand over the same to Mr. Gorakh at Chennai and to get equivalent 24 ct gold bullion from him. As per his instructions, they proceeded to Chennai on 01.12.2020 and reached Chennai on 02.12.2020 and thereafter, proceeded to the shop of Mr. Gorakh, near Elephant Gate and handed over 1269 gms (approx). In exchange, they obtained equivalent 24 ct gold being 1129 gms (approx) from Mr. Gorakh. After that as per the directions, the said appellants went to M/s Balaji Bullion and Jewellery at Chennai and collected 5 Nos. of 100 gms biscuits totally weighing 500 gms of gold bullion from there. After collecting, both of them were returning from Chennai and on the way they were intercepted by the officers of DRI, Vijayawada at Ongole RTC Bus Stand. 10.7. Upon seizure by the officers, he had enquired from Balaji Bullion and Jewellery, Chennai regarding the origin of the gold in question. He was informed by them that they purchased the said gold biscuits from M/s Tarun Chains, Chennai vide Invoice No.TC/103/2020-21 dt.01.12.2020. They further informed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the purified gold returned by the smelters at Chennai is approx., 24 ct and purity is ranging from 99.8% to 99.9%. 10.12. That he does not know if Mr. Gorakh has required machinery and equipment for conversion of melted ornament gold into 24 ct gold. 10.13. On being asked, he stated that earlier also he had handed over 70 gms of melted gold to Mr. Gorakh through Mr. NPK and had received equivalent 24 ct gold. He further admitted that both Mr. NPK & Mr. VVRK are working in his firm and as per his instructions only they have proceeded to Chennai. 10.14. That he neither gave any cash to them nor directed them to proceed to Chennai for handing over cash to Mr. Jawahar and Mr. Rajesh to collect foreign origin smuggled gold. The gold seized by the officers from his two staff was collected by them from Mr. Gorakh and Mr. Prasad only. 10.15. That the name of the person Mr. Rajesh referred by Mr. NPK is one of the partners of Balaji Bullion and Jewellery, Chennai. 10.16. On query regarding Bill No.329 dt.01.12.2020 of M/s Lakshmipathy Thulabaram, recovered from Mr. NPK along with 1000.460 gms of gold vide Panchanama dt.03.12.2020, he stated that he has no idea about the bill. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he melting shop is functioning for more than 20 years. Both the shops are being run by him and he has total of two workers in the melting shop and testing shop. 12.2. That they charge Rs.70/- and 20 mg per item; as far as melting is concerned, they do not charge any money but they take wastage (silver & copper) as well as 1 gm of gold per kg. 12.3. That he knew Mr. R. Rajasekhar, proprietor of M/s Rayapudi Lakshmi Narasimha Rao Son at Jaggayyapet since 2019. 12.4. That Mr. R. Rajasekhar had contacted him in the year 2019 to obtain pure gold from already melted gold from jewellery. Further stated that he would have converted gold 3 or 4 times for Mr. R. Rajasekhar till now and only in December, the weight was around 1 kg. Mr. R. Rajasekhar would call him and inform in advance that his staff would be coming with melted gold of jewellery and he needs 999 purity gold to be extracted out of it. 12.5. Mr. NPK and Mr. VVRK who were working for Mr. R. Rajasekhar used to come to deliver the melted jewellery gold and take back the converted 24 ct gold. 12.6. That the said persons/employees used to bring melted gold in the form of bars and last time they had come in the month of Dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wamy Bullion Merchants. b) He noticed some mistakes in Panchanama dt.02.12.2020 & 03.12.2020. c) He does not have any objection about the quantity of gold seized from him. However, the contents of the statement recorded are not correct. d) His owner - Mr. R. Rajasekhar gave them 1270 gms of remelted gold and instructed them to go to Chennai and meet Mr. Gorakh, who has a melting shop, and get equivalent valued 24 ct gold bullion from him. He also instructed them to go to Balaji Bullion and Jewellery and receive 5 gold biscuits of 100 gm each. As per instructions, they proceeded to Chennai on 02.12.2020 and gave the remelted gold to Mr. Gorakh at his melting shop and Mr. Gorakh gave them 1000.46 gms of gold in the form of 3 rectangular bars with one small bit and 129 gms gold in one rectangular bar and two small pieces. e) His owner - Mr. R. Rajasekhar had not given any cash to them for purchase of gold. 16. Similar retraction letter was given by the other employee - Mr. VVRK. Further it appeared to Revenue that the aforementioned retractions have been given after four months and are by way of afterthought in order to match with the version of Mr. R. Rajasekhar. It als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he deposition given by this appellant, as to the licit source of gold recovered from his two employees, the other appellants, he had submitted statement of 91.6 gold ornaments account for the period 01.04.2020 to 31.03.2021 and also the gold ornament account register for the period 01.11.2020 to 30.11.2020, gold ornament account item register for the period 01.11.2020 to 30.11.2020, old gold item register for the period December 2020, Balance Sheet for the period 2021-22, Profit & Loss account for the period 2021-22, stock in transit item register for the period 2021-22, stock summary for the period 2021-22, Balance Sheet for the period 2020-21, Profit & Loss account for the period 2020-21, stock summary for the period 2020-21, stock journal voucher dt.03.12.2020. 22. Learned Counsel further reiterates the facts as narrated in the statement of Mr. R. Rajasekhar and further relying on the retraction by the other two appellants, urges that the gold in question has been properly explained and no case of smuggled gold is made out by the Revenue. In the retraction statement, both the clerks of Mr. R. Rajasekhar have stated that their statements recorded at the time of Panchanama/seizur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence of licit possession of the gold. The whole case of Revenue is based on assumptions and presumptions, which has no base. The only basis was the statements recorded of the persons carrying gold viz., Mr. NPK and Mr. VVRK, which have been subsequently retracted. Evidently, as the whole country and people were disturbed due to COVID-19 pandemic, retraction made by these persons after a gap of four months from the date of recording of the earlier statements cannot be said to be by way of afterthought. It is further urged that Revenue failed to examine the witnesses as required under section 138B in the adjudication proceedings and accordingly, such statements recorded during investigation cannot be relied upon as they have no evidentiary value under the provisions of section 138B of the Act. 26. During the course of hearing before this Tribunal, learned Counsel referred to the copy of gold ornament account, gold ornament register, old gold item register, stock in transit register and copies of balance sheet, profit & loss account, etc., for the relevant period and pointed out that the records support the contentions of the appellant as to the licit possession of gold in questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them had admitted that they had travelled to Chennai at the behest of their employer - Mr. R. Rajasekhar and have collected gold from Mr. Jawahar and Mr. Rajesh at Shaokarpet, Chennai after paying cash and also delivering 22 ct gold lump. They had further stated that the gold they were carrying is smuggled in nature and has been melted to conceal its identity. 30. He further urges that the smelter/gold smith - Mr. Vishnu in his statement categorically stated that the gold melted by him for Mr. R. Rajasekhar and the gold seized by Revenue may be different. Further, in the course of enquiry/investigation, Revenue could not find the firm by the name - M/s Lakshmipathy Thulabaram at the given address nor Revenue could trace Mr. Jawahar and Mr. Rajesh. It is further urged that as per section 123 of the Act, the burden of proof is on the person from whose possession the gold is found or such other person who claims the gold to be his. Thus, once gold has been seized by Revenue on the apprehension of it being smuggled, the onus is on the persons from whose possession it is seized or on the person who claimed the gold to explain the licit source of such gold. Accordingly, he prays for di ..... 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