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TMI Blog2024 (8) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms (Preventive) examined certain consignments at Domestic Inbound Terminal, Air Cargo Complex, Rajiv Gandhi International Airport, Shamshabad on 10.11.2020. They, interalia, found that one M/s Sunil Kumar Saini, C/o Jai Mata Di Logistics had taken certain consignments of gold and gold jewellery weighing 2.60 Kg from different consignees which were to go to Mumbai. On examination, interalia, it was found to 11 individual packets containing gold biscuits/cut pieces of gold biscuits, jewellery etc., which were not accompanied by any proper documents. On further evaluation of these goods, it was found to contain various types of gold including pure gold of 999 purity, gold ornaments etc. They also found that, interalia, the appellant's consignment of pure gold weighing 400 gms was accompanied by job work voucher no. 001 dated 09.11.2020. All these items were seized as Department felt that gold biscuits, jewellery etc., without proper bill were attempted to be smuggled and were liable for confiscation under Customs Act 1962 and CGST Act 2017. 3. The Department also recorded the statement of one Shri Sujit Kumar Jain, Managing Partner of the appellant on 04.12.2020, wherein, he was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court's judgment in the case of Om Prakash Bhatia Vs Commissioner of Customs, Delhi [2003 (155) ELT 423 (SC)] to hold that said goods were liable for confiscation. Further, by holding that the said goods were prohibited in nature, he confiscated gold bars absolutely without giving any option to pay the fine in lieu of confiscation as provided under Section 125 of the Customs Act, 1962. 5. Commissioner (Appeals) has mainly dealt with the issue of absolute confiscation and held the order of the Adjudicating Authority proper and legal. He has, however, not dealt adequately with the contention of the appellant's that Department has not established that said seized gold bars were initially illegally imported by appellant or anybody in violation of Customs Act and that burden is not on appellant to prove the legal acquisition of gold in India but it's on Department to establish illicit import. 6. The Learned Advocate has mainly contended that there was no ground to have reasonable belief of gold being liable for confiscation in first place under Section 110 as said gold which were confiscated were being transported under the cover of proper documents. He relied on the judgment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer identified some images of gold biscuits/cut pieces of gold biscuits in 4 packets which were respectively not accompanied by any proper document. The Officers also observed presence of jewellery/ornaments without proper valid documents in the remaining packets. 11. The case against the appellant is that the Officers found 4 pieces of pure gold totalling 400 gms covered under job work gold issue voucher no. 001 dated 09.11.2020. Further investigation was carried out, wherein the statement of the appellant Shri Sujit Kumar Jain, Managing Partner of the appellant was recorded wherein, interalia, he clarified that 4 gold bars of 99.9 purity weighing 100 gms belongs to them. He further informed that the said gold bars were purchased from one M/s Shubham Jewellers, Mumbai vide invoice no. 62 dated 17.10.2020 for which payment was also made through cheque no. 307120, SBI, SME Branch, Kakinada and that the said transaction has been duly reflected in the GSTR-2A of Raj Jewellery Mall, Kakinada. However, on being informed by the Department that the said M/s Shubham Jewellers has dis-owned the delivery of the impugned gold bars, Shri Jain expressed his inability to explain as to why ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n origin. One of the main thrusts of the Department is that so called supplier of impugned gold has refused to acknowledge that the said golds were supplied by him, whereas, the appellants have brought evidence on record that they had purchased 4 gold bars totalling 400 gms under valid invoice which was also having the purity of 999. The fact that the M/s Shubham Jewellers has supplied to the appellant 400 gms of pure gold (Gold Bar 999) and received payment etc., or it's reflection in GSTR-2A has not been disputed by either Department or appellant but what is being disputed or alleged is that the gold in question are not the same gold which were supplied by the Shubham Jewellers under the cover of invoice no. 62. 14. In order to understand the circumstances under which the said gold bars were seized by the Customs Officers, I have perused the Panchanama dated 10.11.2020 under which, interalia, these goods were seized. The Panchanama gives the factual details as well as the background for inspecting and examining the consignment from Vijayawada to Bombay via Hyderabad. On going through the 11 packets, the Officers felt that there might be foreign origin gold biscuits and got these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase invoice no. 62 dated 17.10.2020 to the courier M/s Jai Mata Di Logistics for the purpose of transportation. However, the fact that Department had contacted M/s Shubham Jewellers via e-mail and their response was never disclosed or relied upon in show cause notice. Again, the fact that they had sent for verification the invoice to M/s Shubham Jewellers further confirms that Department was in possession of supplier's invoice even before they recorded statement of Shri Jain. 16. In the entire show cause notice, there is no details as to how investigation were carried out by the Department from M/s Shubham Jewellers, Mumbai and it was only in the course of the statement this fact was disclosed to the appellant. In fact, the Department has now by way of additional submission has accepted that Department had sent one e-mail dated 27.11.2020 to confirm the sale of gold to the appellant vide invoice no. 062 dated 17.10.2020 by attaching the image of seized 4 gold bars and in reply M/s Shubham Jewellers, Mumbai vide e-mail dated 27.11.2020, though confirmed the sale of gold bars vide invoice no. 062 but denied the delivery of the said impugned 4 gold bars. In view of the same, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustained. Further, the fact the Departmental Officers were themselves not sure as to under which provisions said goods were liable to confiscation i.e whether Customs Act or CGST Act, they cannot have reasonable presumption that impugned goods were smuggled in nature, as a pre condition for invoking Section 123 of Customs Act. It is also noted that certain other relevant factors like seizing it from domestic inbound terminal of Air Cargo Complex, immediate clarification about covering documents and ownership etc., by authorised representative of courier company M/s Jai Mata Di Logistics, and appellant not shyning away from ownership of said item would also make the presumption of reasonable belief about impugned goods being smuggled in nature, untenable. 19. On going through Section 123 & 110 of Customs Act, what is obvious is that seizure under Section 110 can be made if reasonable belief exists for the for them being liable to confiscation under Customs Act, Section 123 can be invoked only when seizure has been made under reasonable belief that it was of smuggled nature. The definition of smuggling under Section 2(39) of Customs Act defines where the goods are liable for confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as far as gold is concerned that it was smuggled and in the given facts there was reasonable belief, is not tenable in view of discussion in foregoing paras that on the date of seizure there could not have been any reasonable belief to hold said goods as smuggled goods by the Departmental Officer in view of the documents covering the consignment. In the case of Collector of Customs, Madras Vs Nathela Sarpathu Shetty [1999 (110) ELT 157 (SC)] Hon'ble Supreme Court, inter alia, observed in para 44 that reasonableness of the belief has to be judged by all the circumstances appearing at that moment. Therefore, even though subsequently they would have found some evidence to suggest that one of the documents might not be authentic document for coverage of the impugned gold, at the time of seizure, there was no material ground to hold such a belief. Therefore, in the given set of facts, I do not find that Section 123 was invokable. 22. In so far as the issue whether Department was able to establish that said gold bars were of foreign origin and were smuggled and subsequently re-melted as held by the Original Adjudicating Authority, I find that there is no evidence in support of that thes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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