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TMI Blog2025 (1) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... his workers being not available. Onus to prove - HELD THAT:- This Court has considered the fact that last two numbers were not visible has been held against the party which considered this finding to be based on assumption and presumption. This Court finds that even if the department nurtured a doubt despite the import documents having been produced, it should have at least done some further investigation to linked or otherwise the gold biscuits with the import made by the Kotak Mahindra Bank. Instead of this no statement even of the accused (now appellant) has been recorded in the matter and neither has it been brought on record as to why last two numbers became invisible to the department. There is nothing on record to show if the same was erased with the malicious intention and if so they by whom? It is also not on record as to whether such lack of visibility of last two number was on account of any rubbing or corrosion over a period of time. Further the moment, gold is found accounted for the documents (like) Bill of Entry produced, the onus gets shifted on the department - the production of any documents shifts onus on department. This was correct position in law even at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 123 of the Customs Act, 1962. Appeal allowed. - MR. SOMESH ARORA MEMBER (JUDICIAL) Shri. P. P. Jadeja, Consultant for the Appellant Shri. Himanshu P Shrimali, Superintendent (AR) for the Respondent ORDER In the instant case on information, an Angadia firm was intercepted on 16.11.2013 and 2 pieces of 1Kg each of gold were found in his possession. While one was released after detention and belonged to another party. The second one belonging to M/s. Jyoti Jewellers (the present appellant) and which was moved for job work to M/s. M.H. Karbawala Co, Mumbai under challan from M/s. Jyoti Jewellers was detained earlier and later seized on 06.05.2014. The lower authorities upheld confiscation, however, allowed release of the same on redemption find of Rs. 2,00,000/- and imposition of penalty of Rs. 1,00,000/- on present appellant i.e. M/s. Jyoti Jewellers and also imposed penalty of Rs. 50,000/- on Shri. Hiteshbhai Dwarkadas Patel, partner of M/s. Arvind Kantilal Co., under Section 112 (b) of the Customs Act, 1962 as he was carrying the above gold for the Angadia firm M/s. Arvind Kantilal Co. The concurred findings in substance of both the lower authorities are as follows: I fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Entry of import having been done under Bill of Entry No. 327575 dated 20.10.2013 through M/s. Kotak Mahindra Bank Limited. The seizure was upheld on the basis that the last two digits on the gold bar were not clearly visible. The appellant party has relied upon various case law to indicate that once there produce documents, the onus of proof gets shifted on the other side to establish otherwise in this context, he placed reliance on the following decisions:- 2001 (127) ELT 415 (Tri.-Mum) - S.K. Chains Vs. CC(P), Mumbai 2012 (286) ELT 375 (Tri.-Mumbai) - Mahesh B. Mali Vs CCE Pune 2008 (226) ELT 641 (Tri.-Ahmd.) Rasilaben H. Rathod Vs. Commissioner of Customs, Ahmedabad 2002 (142) ELT 668 (Tri.-Kolkata) - Kapildeo Prasad Vs Commissioner of Customs 2. The advocate has also emphasized that no recording of their statements was done, nor of officials of M/s. Kotak Mahindra Bank or intermediary was done to establish as to how two last numbers got erased so as to not remain visible. 3. Department through its A.R on the other hand, denying the burden of proof was discharged and apart from reiterating the findings places reliance on 2022 (380) ELT 205 (Tri. Chennai)-RAVI NAKHAT VS. COMMIS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Learned Counsel for appellants have no relevancy or applicability to the facts of the present case. 4. While reiterating all submissions in both Appeals filed and made during the PH held, Appellant also submitted further that the impugned O-I-O/O-I-A passed by authority is unjustified qua appellants, as the case is on incorrect base upon and Order is without justification. The O-I-O/O-I-A have not correctly appreciated the facts as per appellant s reply to allegations and findings as mentioned above in O-I-O/O-I-A. This case is based on suspicion and not on facts that seized gold is smuggled gold. Settled Principle that suspicion, however grave it may be, cannot take the place of a fact needs to be applied in this case. O-I-O/O-I-A have not followed this settled Principle of law. Revenue has not correctly appreciated that the seizure and confiscation of Gold Bar wt. 1000 gms is not supported by any evidence that Gold Bar wt. 1000 gms is improperly imported into India and in absence of compliance of such requirement, seizure of Gold Bar wt. 1000 gms worth Rs. 31,37,500/- is not justified or sustainable, and confiscation thereof allowing on duty, R/F and Penalty deserves to be vac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Virendra Patel] vide its challan No. 01 dated 01-11-2013 for making the Ornaments on Job Work basis to M/s M H Karbawala at 81-Shaikh Memon Street, Near Mumbadevi Temple, Zaveri Bazar, Mumbai 400002. However, since their Kargar[Artisen] were not available, the said M/s M H Karbawala, were not able to make ornaments required and returned the same back to the Appellant M/s Jyoti Jewellers at Ahmedabad vide their Voucher No. 27 dated 15-11-2013. Copies of the Vouchers dated 01 of 995.0 -11-2013 and their stock register for gold, Voucher dated 15-11-2013 are submitted for ready reference as Annexure No I. 7.1 M/s Jyoti Jewellers [shri Virendra Patel] has submitted that gold was imported by Kotak Mahindra Bank in 2010 and appropriate duty thereon was paid, but it had come in hands of Virendra Patel much later from open market in the year 2013. Appellant s submission is that as per prevailing Trade practice in market, Gold of 1000 gms were received normally as sale purchase and accordingly Appellant had taken entry of stock in their Books of Account for 995.0 gold in their trading purpose. O-I-O has confiscated 1000 gms Gold which is not liable to confiscation, as it has not considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perly or otherwise and DRI has simply jumped to conclusion and assumed that Appellant has failed to produce documents showing licit import of the said seized gold. SCN/O-I-O/O-I-A are only on basis that as last two digits on Gold Bar were not clearly visible, it could not be said with conviction that import documents submitted matched with seized gold showing its licit import. The finding cannot be said with conviction can be viewed in favour of Appellants. This is not a definite conclusion with positive evidence. It is settled principle also that when there are two interpretation possible, interpretation beneficial to trade should be applied. In facts of case, investigation has doubted documents submitted, but has not come out with any contrary evidence. Therefore, Applying settled principles of law, confiscation on such suspicion is not justified or sustainable under the Customs Act 1962. 8. Decisions relied by Revenue are on different facts and not applicable in this case. Decision 2022 (380) ELT-205 (Tri-Chennai)-Ravi Nakhat Vs Commissioner Customs, Chennai-II produced by the SDR during PH is a case where elaborate investigation was conducted, misdeclaration was established by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n delivery/sales documents issued by them and Revenue having failed to prove that gold bars not purchased by respondent and same procured from any other sources, confiscation not sustainable and further holding that Onus shifted to Department when assessee discharged his burden by producing bills showing purchase of gold in terms of Section 123 of Customs Act, 1962. In Nitya Gopal Biswas v/s CC(P) 2016 (344) ELT-209 (Tri-Kolkata), it has been held that reasonable doubt of smuggled nature of foreign marked gold may be sufficient for the purpose of seizure of gold, by virtue of Section 123 of Customs Act, 1962, but the same is not sufficient for confiscation when appellant has produced legal document of their licit acquisition and that Department not able to establish the smuggled nature of seized foreign marked gold, whereas claimant appellant has been able to discharge his burden by providing licit document of purchase of 60 foreign marked gold biscuits, further holding that in the light of liberalized policy of Central Government it cannot be held that all the foreign marked gold being bought and sold in India is of smuggled nature and confiscation and penalties imposed were set a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of foreign marked gold in India should indicate the brand names with respect to each brand then foreign marked gold should have been declared as one of items under Chapter IVA of Customs Act, 1962. Thus, there is no mandatory requirement under prevailing law to mention brand or marks or numbers of foreign marked gold in the sale/purchase documents. Hence, confiscation ordered deserves to be set aside in this case. Shri Virendra Patel pray to set aside order of confiscation of 1000 grms Gold and allow the Appeal with consequential reliefs as per law. Appellant has substantiated that seized 1000 gms gold was out of his stock inventory of legally purchased Gold. Appellant discharged burden of proof u/s 123 of Customs Act 1962 by maintaining normal business daily account with relevant documents of purchase/sale showing Opening Balance Receipt issue closing stock, while dealing in Gold/silver purchased and sold. Thus, confiscation of 1000 gms Gold is not sustainable in facts of this case and deserves to be set aside. 9. Appellant has relied upon various decisions which are part of its submissions. Thus, When O-1-0/0-1-A observe that authorised Importers like MMTC do not provide impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done any positive act or dealt with smuggled gold, which he knows or has reason to believe that such gold is liable to confiscation under section 111 of Customs Act 1962. Ingredients required for imposing penalty u/s 112(b) to impose penalty on the Appellant Shri Hitesh Patel, are not existing. 10.2 There is nothing on record to show that any of 2 Appellants had knowledge that seized gold was actually smuggled gold and it was liable to confiscation u/s 111 of customs Act 1962. There is nothing on record to suggest that Appellants had any role in smuggling of such gold seized and confiscated subsequently. Therefore, there is no case for imposing any penalty on Appellants u/s 112(a) or u/s 112(b) of customs Act 1962. Penalty imposed on Appellants u/s 112(a) and u/s 112(b) of Customs Act 1962 are not justified and also deserves to be set aside. The Redemption Fine imposed is also not justified and deserves to be set aside as the seized gold bar was not liable to confiscation. Thus, appellants seeks to consider all submissions and to allow appeals with consequential benefits. The appellants have substantiated their cases for justice by setting aside confiscation of gold and duty, R/F a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r corrosion over a period of time. Further the moment, gold is found accounted for the documents (like) Bill of Entry produced, the onus gets shifted on the department, as held in following case law. U.O.I Vs. Imtiaz Iqbal Pothiwala reported in 2019 (365) ELT 167 (Bom.) Ana Jamil Vs. C.C (P) Shillong reported in 2016 (342) ELT 248 (Tri.Kal,) Ashok K. Agarwal Vs. U.O.I-2016 (342) ELT 232 (Cal.) S. Ramki Vs. PRINCIPAL COMMISSIONER OF CUSTOMS, CHENNAI-III as reported in 2020 (372) ELT 372 (Tri-Chandigarh) Rajesh Verma Vs. C.C. as reported in 2021 (378) ELT 502 (Chandigarh) Therefore, the production of any documents shifts onus on department. This was correct position in law even at the time, when foreign marked gold was a notified item under Section 123 of the Customs Act, 1962. 11.2 Further it is also seen that while releasing the gold biscuits in the form in which it was seized by the department no melting has been directed as per records. The vital question therefore arises that if the gold biscuit was seized in the form in which it was liable to seizure, then why not at the time of ordering its release the same was directed to be released under supervised melting to prevent the po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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