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TMI Blog2024 (4) TMI 699X X X X Extracts X X X X X X X X Extracts X X X X ..... to Burdwan Customs Office. The officers searched the Appellant No.(2) in the presence of independent witness and found 5 pcs. (1 Kg. each Piece) of yellow metal in bar form appearing to be gold of foreign origin on which inscription as "PMAP SUISSE" on two bars, "VALCAMBI SUISSE" on one bar, "KALOTI DUBAI" on one bar & "MMTC PAMP" 1 KT on one bar were mentioned. The officers also found Rs.2,150/- Indian currency & a Notary Certificate from the Appellant No.(2). The weight of all bars were found to be 5 kgs., which was valued at Rs.1,53,25,000/-. During the course of interrogation, the Appellant No.(2) informed that he did not possess any licit documents of such gold bars. Thereafter, the said gold bars were seized under Section 110 of the Customs Act, 1962 vide Seizure Memo dated 18.06.2016. Thereafter, Panchnama was drawn and the statement of the Appellant No.(2) was recorded, in which, he has stated that such gold bars were handed over to him by Mr.Sonu Tewari on the instruction of Shri Neeraj Agarwal, the Appellant No.(1), who deals in foreign origin gold and he purchased the gold from Kolkata and sold the same at Mirzapur, Varanasi & Delhi. The Appellant No.(1) also owned a jew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the statement under coercion. Thereafter, summon was issued to the Appellant Nos.(3) and (4) for recording their statements under Section 108 of the Customs Act, 1962. The Appellant Nos.(3) and (4) appeared before the Customs Officers on 01.09.2016 and stated that they purchased the said gold in the year 1997-1998 from the Appellant No.(1) and handed over the same to the Appellant No.(2) to sell the same at Kolkata at higher price. 2.3 Further, the statement of Appellant No.(1) was also recorded, who has also stated that he has sold the gold in question to the Appellant Nos.(2),(3) & (4) and produced the invoices thereof and also submitted that since the matter relates to 18 years old, he was not having Books of Account as the same was not required to keep in safe for such longer period. 2.4 Thereafter, Shri Moniram Tewari was also interrogated on 03.11.2016 and he informed that three to four months ago, the Appellant No.(2) came to him to sell 5 kgs. gold and produced three photocopies of invoices, but he refused to purchase the same in absence of original invoices and as a result, the Appellant No.(2) went back. 2.5 Further, on conclusion of the Inquiry, a show-cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r smuggled one. He further submits that the alleged inscription mentioned on the seized gold bars were duplicate because the purity of the gold mentioned was only 99.5% wherein the foreign made gold is having purity of 99.9%. Therefore, it is established beyond doubt that the seized gold bars were not of foreign origin as purity is 99.5% as per CRCL. It is further submitted by him that the gold bars bear foreign markings, but the origin of the country has not been mentioned in the show-cause notice. Therefore, it cannot be concluded that the seized gold bars were of foreign origin. Mere foreign marking on the gold bars does not by itself establish the smuggled nature of the gold. It can at the best establish the foreign origin of the goods. To support his contention, he relies on the following judgments: (i) Naved Ahmed Khan Vs. CC, Bangalore : 2005 (182) ELT 494 ; (ii) Jitendra Pawar Vs. CC,Raipur : 2003 (156) ELT 622 ; (iii) CC, (Prev.), Kolkata Vs. Monoranjan Banik : 2004 (165) ELT 237. 3.2 It is his contention that the Revenue has built up its case only on the ground that the seized gold contains marking which belongs to a foreign country, hence the seized gold was of fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld seized from the Appellant No.(2) was smuggled one. 3.7 It is further submitted that the detailed inquiry was made by the Revenue from the seller of the gold and nothing incriminating was found during the course of inquiry and from the statement of the Appellant Nos.(3) & (4). Therefore, the case of the Revenue is on the basis of assumptions, presumptions, surmises and conjectures, therefore, the entire proceedings lacks of legal sustainability. To support his contention, he relies on the following judgments : (i) Sitaram Sao Vs. State of Jharkhand : 2007 (12) SCC 630 ; (ii) Mridul Agarwal Vs. Commissioner of Customs, Lucknow : 2018 (362) ELT 847 (Tri.All.) ; (iii) Shantilal Mehta Vs. UOI and Others : 1983 (14) ELT 1715 (Del.) ; (iv) CCC (P) Vs. Prabhash Kumar Jalan, CESTAT, Kolkata Bench, Final Order No.75500/2021 dated 27.08.2021 ; (v) Shri Sarvendra Kumar Mishra Vs. Commissioner of Customs Vide Final Order No.70198-70199/2021 dated 06.09.2021 ; (vi) Nand Kishore Modi Vs. Commissioner of Customs (Preventive), West Bengal : 2015 (325) ELT 781 ; (vii) Rajesh Pawar Vs. Union of India : 2014 (309) ELT 600 (Cal.) ; (viii) Commissioner of Customs (Prev.), Kolkata Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom whose such goods were seized before setting up the period so specified. 8. On going through the said proviso of Section 110 (2), it is stated that the Commissioner of Customs was duty bound to record the reasons in writing for extending the time for further six months and the same has to be communicated to the persons, from whose such goods were seized. As per the proceedings conducted by the Commissioner of Customs (Preventive), Kolkata, although such order was passed on 15.12.2016 and the same was sent to the Appellant No.(2) from whom the said gold was seized through speed post, but no date has been recorded by the adjudicating authority of communication thereof to the Appellant No.(2). 9. During the course of proceedings, the appellant filed an Affidavit claiming that the said order of extension of time under Section 110 (2) was received by them only on 17.01.2017, which is beyond period of six months in terms of Section 110 (2) of the Act. On that ground alone, the gold is required to be released to the appellants unless contrary is proved by the Revenue, but nothing contrary have been proved by the Revenue. In that circumstances, on this ground alone, the gold is not li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be the owner of the goods so seized. (2) This section shall apply to gold, diamonds, manufactures of gold or diamonds, watches and any other class of goods which the Central Government may by notification in the Official Gazette specify." 56. In Babulal Amthalal Mehta v. Collector of Customs, AIR 1957 S.C. 877, while considering the provisions of Section 178A of the Sea Customs Act, 1878, it was observed; "Though the word `smuggling' is not defined in the Act, it must be understood as having the ordinary dictionary meaning, namely, carrying of goods clandestinely into a country." Where Section 123 cannot be invoked it would be for the customs authorities to prove that the goods were imported after the restrictions against import were imposed. (Amba Lal v. Union of India, AIR 1961 S.C. 264 = 1983 E.L.T. 1321). In Pukhraj v. D.R. Kohli, AIR 1962 S.C. 1559 = 1983 E.L.T. 1360, the Supreme Court said that when the court was dealing with the question as to whether the belief in the mind of the officer who effected a seizure, was reasonable or not, the court was not sitting in appeal over the decision of the said officer. All that it could consider was whether there was any gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le belief for the seizing officer to hold that the goods are smuggled, are before the adjudicating officer. These facts which justified the seizing officer to reasonably believe that the goods were smuggled would certainly import a rational connection between the facts on which the presumption is raised and the fact to be proved, so that whatever other constitutional infirmity might attach to the impugned provision, the lack of rational connection is not one of them." It would be necessary, therefore, before any person could be called upon to prove that the goods seized from him were not smuggled goods, that the customs officer making the seizure must proceed upon the foundation of a reasonable belief inspired in him by some definite material by way of some definite information or otherwise so that he could be said to have seized the goods in a reasonable belief that they were smuggled goods. (Bapalal v. Collector of Central Excise, AIR 1965 Gujarat 135). The question is whether the record before me shows that there was a reasonable belief in the mind of the seizing officer that the goods were smuggled goods. It does not appear to me that he had entertained any reasonable belief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply was received on 24-7-1967. But at the time of seizure all that the officer had before him were 2 packets of diamonds and 5 ornaments. Neither the diamonds nor the ornaments had any foreign markings or label to suggest to the customs that these were smuggled goods. In the search list these two packets of diamonds are described as "appearing to be diamonds". This shows that the customs officer did not believe them to be diamonds on any reasonable ground. The ornaments had no foreign label or making. They were ordinary ornaments as are worn in this country. There was nothing peculiar about them. Nothing extraordinary. On this material could any reasonable man entertain a belief that these were smuggled goods? 59. The belief must be such as any reasonable man in the circumstances of the case would entertain about the existence or non-existence of a thing. Simply because the goods were not accounted for at that time does not necessarily mean that the goods were smuggled goods. Unaccounted goods may be stolen goods. Reasonable belief could be entertained either on the basis of some external indicia or on the basis of some internal information that the goods had been illegally impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e man to arrive to explain the entries to him. He seized the goods and took them away. This was not a case of reasonable belief. It was a case of suspicion. A case of speculation. A case of guess work. 63. As a result Section 123 did not apply to the case. There was no reasonable belief. No presumption could be raised under Section 123. There was no obligation on the petitioner to prove that the goods were not smuggled. The burden of proof was wrongly cast on him. The entire inquiry was vitiated." 14. As the purity of gold was 99.5%, although there is an inscription of gold being of foreign origin, which does not establish that the gold in question is of smuggled in nature. Moreover, one of the gold bar is having marked as "MMTC PAMP" that the gold bar cannot be of foreign origin and smuggled one, which itself breaks the case of the Revenue. The Revenue is also relying the marking of "MMTC PAMP" Indian marks, therefore, how can it be alleged that the gold in question is of foreign origin and smuggled one, therefore, we hold that the Revenue has failed to make out a case of reasonable belief that the gold in question is smuggled one. Consequently, the provisions of Section 123 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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