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TMI Blog2023 (7) TMI 1410X X X X Extracts X X X X X X X X Extracts X X X X ..... f gold also remains between 99.5 % to 99.7 %, whereas the normal foreign origin gold will be of purity of 99.99 %. Thus, without coming to the belief that the gold is of the purity of 99.9 %, it cannot be alleged on presumption that it is smuggled one. Evidences proving smuggling of gold from Bangladesh - The appellants have discharged their onus u/s 123 of the Customs Act, 1962 by producing invoices in support of their claim that they are the owners of the gold in question. In view of the evidences and discussions, we hold that the appellant has discharged the onus that the source of procurement of gold. We further take note of the fact that as the Revenue has failed to prove from the facts and circumstances of the case, we have come to the conclusion that in the absence of evidence on record, it cannot be held that the gold in question is of smuggled in nature, therefore, the same can be released to the appellants. Therefore, no penalty is imposable under Section 112 (a) 112 (b) and 114AA of the Customs Act, 1962. Accordingly, penalties imposed on the appellants are also set aside. In the result, the appeals are allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... market. Intelligence also suggested that those smuggled gold and silver were secreted at different premises at Burrabazar area of Kolkata by Shri Anurag Jalan. 2.2 On the basis of aforesaid intelligence simultaneous searches were conducted on 22.01.2020 at the following premises, I premises of M/s Roopam Sarees at 3rd Floor, 3 Chetan Seth Street, Kolkata-700007, 2) Jalan Bullion and Jewellers, Jalan Arcade, 2nd Floor, 43, Nalini Seth Road, Kolkata-700007, 3) Room No.405, 4th Floor, 61, Manohar Das Street, Sonapatti, Kolkata 700007. 2.3 The premises of M/s Roopam Sarees at 3rd floor, 3 Chetan Seth Street Kolkata 700 007 were searched by one team of DRI officers in the presence of Shri Dhan Kishore Agarwal Director of M/s Roopam Creations Pvt. Ltd & property of M/s Roopamr Sarees and Shri Shreyash Agarwal Manager of M/s Roopam Sarees along with two independent witnesses on 22.01.2020. and recovered seven packets containing four(04) numbers of gold bars and five cut pieces of gold bar believed to be gold of foreign origin collectively weighing 6356.05 grams and valued at Rs. 2,57,42, 002/- (Rupees Two crore Fifty-seven lakh Fortytwo thousands and two only). As Shri Dhan Kishore Aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... searched the premises at Room No. 405, 4th Floor, 61, Manohar Das Street, Sonapatti, Kolkata - 700007 owned by Shri Anurag Jalan. Shri Baikunth Prasad, who according to Shri Anurag Jalan, lives at the said premises and was in possession of keys of the said residential premises accompanied the officers to Room No. 405, 4th Floor, 61, Manohar Das Street for search. From the almirah in the said premises four(04) pieces of gold bars collectively weighing 4000.00 grams and valued at Rs. 1,62,00,000/- was recovered. As Shri baikunth Prasad failed to produce any licit documents in support of possession/acquisition, dealing with the gold bars. Therefore, the same were seized by DRI under Section 110 of the Customs Act, 1962 on the reasons to believe that those were liable for confiscation under Section 111 of the Customs Act, 1962. 2.7 Statement of Shri Dhan Kishore Agarwal was recorded under Section 108 of Customs Act, 1962 on 22.01.2020, wherein he inter alia stated that the said seven packets containing 4 pcs of gold bars and 5 pcs of cut pieces of gold bars totally weighing 6356.05 gm from the chamber of his manager Shri Shreyas Agarwal at 3, Chetan Seth Street, was sent by his son in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portion to Roopam Saree as per his instruction; that apart from the above two suppliers he also had another supplierof smuggled gold namely Biman Debnath of Siliguri (Phone 9474331608); that he had no further details about the suppliers; In response to a specific question about seizure of 3 kg smuggled gold from two carriers at Siliguri on 23.01.2019, Shri Anurag Jalan admitted that those carriers were coming from Shri Buman Debnath for delivery of the gold to him; In response to another question regarding seizure of 4 kg gold bars at Gaya Railway Station on 10.01.2020, Shri Anurag Jalan admitted that he was supplier of those gold bars weighing 4 kgs, which were made from foreign origin gold smuggled from Bangladesh; that as per his instructions, his staff Shri Dilip Singh handed over the said gold bars to the carriers from the 4th floor premises at 61, Manohar Das Street, Kolkata on 09.01.2020 afternoon; that Dilip Singh was his staff, he used to receive smuggled gold with foreign markings on his behalf and reshaped it after melting; That thereafter Dilip used to hand over the reshaped gold bars to representative of the buyers as per his instruction; that after interception of 4 k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per instruction of Shri Anurag Jalan he delivered five packets to Ashu babu of Roopam Saree and kept six packets of gold bar in the almirah of Rook No. 405, Manohar Das Street; that from those six packets, as per instructions of Shri Anurag Jalan he had delivered another two packets of gold bars to Roopam Saree on 22.01.2020; 2.12 On 17.02.2020, Shri Anurag Jalan visited DRI office and submitted a file titled GST Silver purchase 2019-20 of Jalan Bullion & Jewelers. The file contains documents related to purchase of Silver by the firm during the period of April, 2019 to January, 2020. All the invoices were related to purchase of goods described as (i) Silver Grains (purity 9995+) (ii) Silver Bar/grains Fineness 999, (iii) Silver granule 0.9999 or (iv) silver [999%]. 2.13 In support of legal purchase of the gold bars seized on 22.01.2020 by DRI, Shri Anurag Jalan submitted two invoices of one Prithvi Gold of Delhi. In the said two invoices quantities of gold was mentioned as 6450.910 gms and 4000 gms respectively. There was no mention of number of pieces of gold bars in any of the invoices. The purity of gold was also not mentioned in any of the invoices. In invoice dated 15.01.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f his cash ledger, cash book and cash summary. As per the cash ledger submitted by him the closing balance was Rs. 20,19,514/- as on 22.01.2020. Total amount of Indian Currency recovered and seized from the premises of Jalan Bullion & Jewellers on 22.01.2020 was Rs. 20,16,100/-. It is also found from the cash ledger that there was no receipt of cash throughout the month of January. An amount of Rs. 19,15,824/- was shown to have been received on 22.01.2020 itself. This single entry on the date of search raised doubt about the authenticity of the transaction. It may be mentioned that on the date of search on 22.01.2020, Shri Anurah Jalan failed to give any account of the currency notes recovered from the premises. It appears that all the transactions shown in the ledger was created afterwards to substantiate his claim on the money as legal. 2.17 Shri Anurag Jalan submitted one gold sale memo dated 13.01.2020 issued by Ranjana Tibrewal. As per the said sale memo. 20 gold coins weighing 92 Grams were sold to Jalan Bullion & Jewellers for a total price of Rs.3,33,224/- for giving evidence and submit documents. In reply letter dated 26.12.2020 received from Smt Tibrewal, some documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Caused proposing confiscation of the seized goods and imposition of penalty upon them under provisions of Customs Act, 1962. Shri Param Hans, Proprietor Prithvi Gold, was asked to show cause notice as to why penalty shall not be imposed upon him under Section 114AA of the Customs Act, 1962 for submitting false documents before DRI officers in course of investigation. 2.20 The Adjudicating authority passed the order mentioned in paragraph (1) herein above. 2.21 The said order was challenged before the ld.Commissioner (Appeals), who upheld the order passed by the Adjudicating authority. 2.22 Against the said order, the appellants are before us. 3. The ld.Counsel appearing on behalf of the appellants, submits that it is alleged that on the basis of reasonable belief, the appellants were involved in smuggling of gold and silver from Indo Bangladesh border through District of 24 Parganas, West Bengal. This allegation is purely on figment of imagination that the subject golds bullion were smuggled and subsequently melted and converted into bar another form for further sale in the Indian market. The said allegation was fostered with the grounds that the subject gold and silver as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settled law that any statement made under Section 108 of the Customs Act, 1962, should be supported by materials other than the statement itself. 3.8 It is the submission that the appellants claimed through letter dated 12.02.2020 that the goods under seizure has been legally purchased and the documents in support thereof were furnished to the Revenue wherein the appellants claimed for vacating the seizure of gold bullion along with the silver granules, coins and Indian currency for which cash ledgers and documents were submitted to the Department and requested to verify the same. 3.9 It is the submission that there is no evidence of marking on the gold and undisputedly, the gold in question was of lower purity and silver coins/silver granules were procured through Bank and all the same were recovered by proper tax invoice/documents of title in favour of the appellants. 3.10 It is the submission that the gold in question is of Indian origin and the same have been purchased from one M/s Prithvi Gold under cover of proper GST Invoice on payment of part consideration through banking channel and M/s Prithvi Gold through his Proprietor, Shri Parmhans, submitted the documents and vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said matter has been argued and pending for decision before the adjudicating authority. 3.16 He further submitted that in the name of deposition, there was yet another case of interception of gold of Indian origin by the DRI, Patna, wherein two persons in the name of Shri Rajesh Kumar Yadav and Shri Umanath, were the employees of M/s Gandhi & Sons, Jaounpur. The said case along with along with the statement of Shri Anurag Jalan dated 22.01.2020, has been evaluated by this Tribunal in the case of Balwant Raj Soni & Others (Final Order No.75455- 75457/2023 dated 18.05.2023) and also presumption of Section 123 does not go in favour of the Revenue in the absence of any independent evidence of smuggling from Bangladesh other than the statement itself. 3.17 With regard to Shri Dhan Kishore Agarwal & Shri Sreyash Agarwal, it is argued that the entire goods are owned and claimed by Mr.Anurag Jalan, being a registered bullion merchant and Shri Dhan Kishore Agarwal and Shri Sreyash Agarwal were closed relatives and there was absolutely no contumacious conduct or any deliberate violation of the fiscal statute on the part of the three appellants to invoke penal proceedings. 3.18 In view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound, firstly, that the subjected case was during the breathing period of Gold Control Act, wherein possession of primary gold even unmarked had a thrust of burden upon the Assessee. When the Gold Control Act was repealed without a saving clause, the said decision under the Gold Control Act has no relevancy under the Customs Act .Currently under the Customs Law, the burden has been thrust upon the Department and the presumption under Section 123 of the Customs Act has no application in the present case, as the gold seized is of Indian origin. 16. The Appellants have relied upon the decision of the Hon'ble Supreme Court in the case of Tata Chemicals Ltd. v. Commissioner of Customs (Preventive), Jamnagar reported in (2015) 11 SCC 628, which has explained the meaning of the word 'reason to believe' as under:- "reason to believe" by opining it to be not the subjective satisfaction of the officer concerned, for "such power given to the officer concerned is not an arbitrary power and has to be exercised in accordance with their strains imposed by law" and that such belief must be that of an honest and reasonable person based upon reasonable grounds. Further, if the authority would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner's premises on 15-12-1967 and seized the goods. Section 110 opens with the words "if the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods". What is the meaning of "reasonable belief"? Did the officer entertain reasonable belief in the facts and the circumstances of this case? This is the other question to be decided. The Supreme Court has said that reasonable belief is a pre-requisite condition of the power of seizure that the statute confers on the officer. (See Collector of Customs v. Sampathu Chetty, AIR 1962 S.C. 316). The preliminary requirement of Section 110 is that the officer seizing should entertain a reasonable belief that the goods seized were smuggled. 55. Reasonable belief as required by Section 110 refers to the point of time when the goods in question are seized and not to a stage subsequent to the act of seizure. (M.G. Abrol v. Amichand, AIR 1961 Bom. 227). The condition precedent that there was such a reasonable belief anterior to the seizure must exist before the presumption under Section 123 can be invoked." 19.2 Smuggled goods -- Reasonable belief cannot be based on presum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods. The word `smuggled' means that the goods were of foreign origin and they had been imported from abroad. Only then does the presumption under Section 123 arise. The goods themselves did not suggest that the petitioner was an old smuggler or a dealer in smuggled goods. If there was such information with the customs, they ought to have disclosed it. The goods themselves did not suggest any illicit importation. Nor was there any inscription on the goods which could be the basis of the reasonable belief that the goods were of foreign origin. There was nothing in the appearance of the goods to suggest that they had been newly manufactured and brought into this country very recently from another country. In a word there was nothing absolutely from which inferences about their origin or recent import could arise. It was not a case where large quantity of gold with foreign markings was found hidden in the trousers of the accused as happened in Hukma v. State of Rajasthan, AIR 1965 S.C. 476. 61. In fact there is a finding by the Board in favour of the petitioner supporting his contention that there could be no reasonable belief in the mind of the officer when he seized the goods. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oices 3 and 5 dated 01/01/20 and 03/01/20 respectively. They contended that they have made part payment for the gold purchased from M/s Chandan Enterprises and the balance could not be paid as the gold pieces were seized by DRI. Since gold is not of foreign origin, section 123 is not applicable in this case as the gold bars/pieces were purchased domestically. 22. Section 123 of Customs Act 1962 puts the burden of proving that the gold is not smuggled one, on the person who claims ownership of the gold. For the sake of easy reference, the said section 123 is reproduced below: 22.1 SECTION 123 - Burden of proof in certain cases (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be - (a) in a case where such seizure is made from the possession of any person, - (i) on the person from whose possession the goods were seized; and (ii) if any person, other than the person form whose possession the goods were seized, claims to be the owner thereof, also on such other person; (b) in any other case, on the person, if any, who claims ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 2000 (126) E.L.T. 180 (Bom.). 4. On the other hand Learned AR appearing on behalf of the Revenue submits that in this case Shri Umesh Kumar in his statement has admitted that gold is being smuggled from Nepal by Shri Sanjeeb Kumar, therefore, Revenue has established that gold in question is smuggled one and is of third country origin. The appellants have failed to prove that the gold in question is not smuggled one. In that circumstances, the Revenue has rightly absolute confiscated the Gold in question. 5. Heard the parties. 6. Considering the submissions made by both the sides, we find that the appellants have failed to prove the source of procurement of gold, therefore, we hold that gold is smuggled one but on the same time, Revenue is also failed to prove that gold is of third country origin and smuggled through Nepal. In fact, the Revenue has not adduced any evidence to that effect, whereas on the other side, Shri Sanjeeb Kumar, himself has categorically stated that he is not dealing with the purchase and sale of the gold. Therefore, the Revenue has failed to prove that the gold in question is of third country origin and have been imported/smuggled through Nepal. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kings are seized from city. The relevant portion of the order is reproduced below. "14. The confiscation of the gold by the adjudicating authority was set aside by the Tribunal and on appeal by the Revenue the Hon'ble High Court of Kerala, in the above factual matrix, has overturned the decision of the Tribunal. Therefore, it was not merely the purity of the gold in question but also the statements made during the investigation which formed the basis of the reasonable belief of the officers. In the present case, none of the statements recorded by the Department admit to or even suggest that the gold was smuggled gold. It has also not been brought out in the show cause notice that the purity of the seized gold is such that it could only have been of foreign origin. It is true that the conduct of the appellants was suspicious inasmuch as the gold pieces were being carried in newspapers and a letter was found written to one Shri Vijay in Trissur for requesting the gold to be handed over to the bearer of the letter. It is also confirmed by the DCM, Railways that the appellants had travelled from Trissur to Vijayawada by train. However, we note that Trissur is not even a port in itse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld has been seized . 9. We further take note of the fact that there is no mark showing that the gold of foreign origin and purity of gold also remains between 99.5 % to 99.7 %, whereas the normal foreign origin gold will be of purity of 99.99 %. 10. In that circumstances also, without coming to the belief that the gold is of the purity of 99.9 %, it cannot be alleged on presumption that it is smuggled one. Issue No.(2) (2) whether the evidences available on record prove that the gold bar and pieces were smuggled into India from Bangladesh without any legal documents or not ? In this case, the appellant has produced two invoices for procurement of the same, which are extracted below : img 11. The above said invoices clearly depicts that Shri Anurag Jalan has procured the gold from M/s Prithi Gold owned by Shri Param Hans, Delhi and to that effect, the above two invoices have been produced. Therefore, Shri Param Hans has also stated that they have sold the gold to Shri Anurag Jalan of Jalan Bullion and Jewelers and also produced the purchase and sale registered copy of the balance sheet and profit and loss account and the invoices for purchase of the gold from M/s Kritika Jew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20)ELT 3 (SC) . That a confession of a co-accused person cannot be treated as substantive evidence and can be pressed into service only when the Court is inclined to accept other evidence and feels the necessity of seeking for an assurance in support of the conclusion deducible therefrom. A confession purported to have been made before an authority would require a closure scrutiny. It is therefore, now well settled that the Court must seek corroboration of the purported confession from independent sources. ii) Prakash Kumar Vs. State of Gujarat- (2007) 4 SCC 266 . The confession of co-accused by itself is not sufficient to hold the other accused guilty. It has been held repeatedly by this Court that the confession of a co-accused is a fragile and feeble type of evidence and it could only be used to support the other evidences, if any, adduced by the prosecution. iii) Assistant Collector of Customs Vs. Amrik Singh 2014 (301) ELT 170 (P&H) The question arises whether the admission of coaccused under Section 108 of the Customs Act can be basis of conviction of other co-accused. The Ld. Trial Court has rightly held that statement of co-accused under Section 108 of the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be considered for corroboration of any tangible evidence and in the instant case, there is no tangible evidence to seek corroboration from statement of co-accused. 26. The appellants submits that Adjudicating Authority should have first examined the person whose statements have been relied upon to form an opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence. This was mandatory. The statement of any person cannot be relied upon directly as has been held by the Hon.ble High Court in the case of G-Tech Industries - Vs. Union of India2016 (339) ELT 209 (P&H). In the said decision the rationale behind the mandate contained in Section 9D of the Central Excise Act, 138B of the Customs Act, 1962 has been mentioned as below: "Para 15- The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement recorded during inquiry/investigation, by the Gazetted Central Excise Officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that is the confessional statements of the coaccused as stated above. On the touchstone of law laid down by this Court such a confessional statement of a coaccused cannot by itself be taken as a substantive piece of evidence against another co-accused and can at best be used or utilized in order to lend assurance to the Court. In the absence of any substantive evidence it would be inappropriate to base the conviction of the appellant purely on the statements of co-accused. The Appellant is therefore entitled to be acquitted of the charges levelled against him." 31. We find that the Impugned Order mainly relied upon the statements of the Noticees 1 to 5 to establish the foreign origin nature of the gold. Other than the statements, there is no other evidence available on record to show that the gold were smuggled into the country from Bangladesh. It is incorrect to rely only on the statements of the co-accused without any corroboration, to prove the smuggled nature of the gold. It is a settled law that the statement of the co-accused cannot be relied without any independent corroboration. 31.1 In the case of Commissioner of Customs (Preventive), Lucknow vs Shakil Ahmad Khan, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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