Custom, Excise & Service Tax Tribunal
Vemula Kranti Kumar vs Vijayawada on 18 March, 2024
(1)
C/30327, 30328 & 30331/2023
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Single Member Bench
Court - I
Customs Appeal No. 30328 of 2023
(Arising out of OIA No. VJD-CUSTM-000-APP-100-2022-23 dt.25.03.2023 passed by the
Commissioner of Central Tax & Customs (Appeals), Guntur)
Pachipulusu Venkata Murali
Jagannadha Rao ......Appellant
S/o Sri Venkateswarlu, Partner of M/s Venkateswara
Jewellers, 19-2-58, Pulupullavari Street,
Kota Bazar, Narasaraopet, Guntur, AP - 522 601
VERSUS
Commissioner of Central Tax
Vijayawada
D.No.55-17-3, C-14, 2nd Floor, Industrial Estate,
......Respondent
Autonagar, Vijayawada, Andhra Pradesh - 520 007 with Customs Appeal No. 30327 of 2023 (Arising out of OIA No. VJD-CUSTM-000-APP-097-2022-23 dt.25.03.2023 passed by the Commissioner of Central Tax & Customs (Appeals), Guntur) Vemula Kranti Kumar S/o Sri Rama Rao, 1st Floor, Near Balaji Complex, ......Appellant Near Telephone Exchange, Narsaraopeta, Guntur, Andhra Pradesh - 522 601 VERSUS Commissioner of Central Tax Vijayawada D.No.55-17-3, C-14, 2nd Floor, Industrial Estate, ......Respondent Autonagar, Vijayawada, Andhra Pradesh - 520 007 and Customs Appeal No. 30331 of 2023 (Arising out of OIA No. VJD-CUSTM-000-APP-096-2022-23 dt.25.03.2023 passed by the Commissioner of Central Tax & Customs (Appeals), Guntur) Tadepalli Prasannanjaneyulu H.No. 3-11-40, Besides Sreerastu Function Hall, ......Appellant Paturu, Narsaraopeta, Guntur, AP - 522 601 VERSUS Commissioner of Central Tax Vijayawada D.No.55-17-3, C-14, 2nd Floor, Industrial Estate, ......Respondent Autonagar, Vijayawada, Andhra Pradesh - 520 007 (2) C/30327, 30328 & 30331/2023 Appearance Shri M.V.S. Prasad, Advocate for the Appellants.
Shri A. Rangadham, AR for the Respondent.
Coram:
HON'BLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) FINAL ORDER No. A/30214-30216/2024 Date of Hearing: 16.11.2023 Date of Decision: 18.03.2024 [Order per: ANIL CHOUDHARY] As these Appeals arise from common SCN, arising from common investigation and adjudication order, they are taken up together for hearing and disposal.
2. The Appellant PVM Jagannadha Rao (PVMJ Rao for short) son of Shri Venkateshwarlu is resident of Narasaraopeta, Guntur district and the partner of M/s Venkateshwara Jewellers, which is engaged in making and trading of gold and silver ornaments and articles. The said firm is registered under the GST provisions and they were filing GST returns regularly and discharging the admitted tax liability. The other two Appellants namely Mr. V. Kranti Kumar and Mr. T. Prasannanjaneyulu are the employees/staff of the first Appellant and/or his firm M/s Venkateshwara Jewellers.
3. The brief facts are that the DRI officers at about 03.20 hours on 10.03.2020 intercepted the bus registeration number AR 01J5225 at Venkatachalam toll plaza, Nellore district. The officers identified the passengers namely Mr V. Kranti Kumar (VK Kumar for short) and Mr T. Prasannanjaneyulu (TP for short). On being asked both Mr VK Kumar and Mr TP admitted that they are carrying gold about one KG each, which is kept in a tailor made cloth belt with a zip and is tied around their waist. On being asked by the officers whether they were carrying any purchase/transport documents for the gold and from where they had purchased, both informed that they have purchased gold at Coimbatore on cash payment and they were not carrying any documents/ purchase bill for the gold they were carrying. Accordingly, the officers detained both the Appellants and took them to DRI office at Nellore. On reaching the DRI office, both the Appellants/staff took out the gold and placed it on the table (3) C/30327, 30328 & 30331/2023 before the officers. Mr VK Kumar placed one yellow coloured metal bar and 4 small pieces of yellow coloured metal and Mr TP placed one yellow coloured metal bar and 5 small pieces of yellow coloured metal. The Appellants said that the yellow coloured metal bars and pieces were of gold. Further stated that they purchased the gold at Coimbatore by paying cash and do not have any receipt/vouchers/bill in respect of the gold carried by them. The said Mr VK Kumar and Mr TP informed officers that they work in a gold shop namely Venkateshwara Jewellers at Narsaraopeta, Guntur district, AP, operated/owned by the PVM J Rao and his son Shri Venkatesh. They had gone to Coimbatore on instructions of Mr PVM J Rao on 08/03/2020, carrying cash of Rs.93 lakhs (Rs.45 lakhs by VK Kumar and Rs.48 lakhs by TP) by bus. On reaching Coimbatore they visited the shop of Kubera bullion in Raja Street and purchased gold from a person named B. Suresh by giving him cash carried by them. Then they proceeded to a refinery/Bhatti around 13:30 hours, where they got the purchased gold melted with the addition of 3.660 gm silver. On 09.03.2020 itself they both booked their return ticket by bus from Coimbatore to Vijaywada.
4. To find the exact nature of the yellow coloured metal bars and pieces the officers called Shri D. Krishna, approved jewelry valuer to the DRI office at Nellore, who examined all the bars and pieces of the yellow metal recovered and issued certificate dated 10/03/2020, stating as follows -
a) Mr VKK: one bar, weight 954.480 grams, purity 99.9 and 4 pieces total weight 49.680 gm, purity 99.9, totalling 1004.16 gms
b) Mr TP: one bar weight 1147.360 grams purity 99.9 and 5 small pieces of gold totally weighing 4.850 gm, purity 99.9, totalling 1152.21 gms.
c) Grand total weight 2156.370 gms.
5. When the officers asked them whether they were in possession of any documents to show the import or purchase of the gold in question, they stated that they had purchased the same by making payments through cash and they were not in possession of any documents to show that the same is the licit transport of gold. They further stated that they understood that the gold they were carrying was melted from foreign origin gold and therefore, such gold was sold without documents.
6. The officers informed both the persons that as the gold they were carrying/possessing appears to be smuggled, they have reasons to believe that the same was melted in order to erase the identity of foreign markings and (4) C/30327, 30328 & 30331/2023 purchased without any valid bills/documents and voucher, and hence is liable for confiscation under the provisions of Customs Act. Accordingly, the officers seized the said goods/gold along with the packing/cover used to wrap and carry the gold. The gold recovered from Mr. VK Kumar - one Gold bar and 4 small pieces of gold, totally weighing 1004.160 gm was put in a box marked M1. Further, the gold recovered from Mr TP namely, one gold bar and 5 small pieces of gold, totally weighing 1152.210 gm was put in a box marked M2. Panchnama was drawn in presence of panchas which was concluded on 10/03/2020 at 16.00 hours.
7. Statements of both Mr VK Kumar and Mr TP were recorded under Section 108, by the officers on 10/03/2020. They, inter alia, stated that Mr. VK Kumar is working since November 2019 with Venkateshwara jewellers, as clerk and Mr TP is working since January 2020, as clerk. Both were also carrying gold on the instructions of the owner/employer, who dropped them at the bus stop on 08/03/2020. As per instructions, they left for Coimbatore with total cash of Rs.93 lakhs. On reaching Coimbatore on 09/03/2020, they went to M/s Kubera bullion at Raja Street where they met Mr B. Suresh, owner of the shop. They handed over the cash carried by them to Mr B. Suresh towards supply of gold. Mr B. Suresh handed over one FT Gold bar weighing 1000.980 gm to him and 2 FT gold bars totally weighing 1152.530 gm to Mr TP. Thereafter, they went to a refinery located at a distance of about 1 km and got the gold melted with some silver - 3.660 gm. He did not know the name of the refinery or the person there. After melting, the refiner handed over 1004.160 gm of gold to him which included small piece of 3.18 gm. The refinery, similarly, handed over one bar and small pieces, totalling 1152.210 gm to Mr TP. On receiving the gold, they wrapped it in a magazine paper and secured with rubber band and kept in the white coloured cloth pouch, which was tied around their waist. They paid Rs.6,802/- melting charges. On the same day evening, they boarded the bus - Kallada travels, which runs from Coimbatore to Vijaywada. Further stated that he was getting monthly salary of Rs.15,000/- and Mr TP was getting monthly salary of Rs.10,000/- from their employer. Further, he was to get additional Rs.1,000/- for this activity. They knew that carrying of gold without valid documents is an offence and they have done the same to meet out their financial burden. Further stated that they purchased gold from Coimbatore, as it is cheaper by about Rs.30,000/- per KG. They purchased gold on behalf of their owner, which would be used for making ornaments to be sold to the customers. On being asked about the origin, they stated that the seized gold (5) C/30327, 30328 & 30331/2023 was remelted from smuggled foreign origin gold. They only knew one person Mr B. Suresh of Kubera bullion, who gave them the gold in exchange of cash.
8. As both Mr. V. Kranti Kumar and Mr. TP had stated that they had purchased gold in question from one - Mr. B. Suresh, partner of M/s Kubera Bullion, Coimbatore, follow up search was conducted at the said premises on 13.03.2020 under mahazar and the person present Mr. B Suresh produced documents, being sales register for the period from 01.03.2020 to 13.03.2020, stock summary for the period from 01.04.2019 to 13.03.2020 and Axis bank statement for the period from 01.03.2020 to 13.03.2020. The statement of Mr. B. Suresh Babu, who was the partner of M/s Kubera Bullion was also recorded on the same day, wherein he, inter alia, stated that they are engaged in purchase of gold bullion from authorized dealers and effect sales to various jewellery shops. On specific query, he stated that they receive payment for the sales made through online transfer by RTGS/NEFT. He further stated that they do not mention the serial numbers/markings of gold bar in their invoices. On specific query if they effected sales of gold bullion on cash basis, he denied and stated that they do not effect sales of gold bullion on cash basis. However, if any customer approaches them to purchase gold on cash payment, he makes arrangement by identifying some person from the market who is ready to sell on cash basis and receive commission of Rs.2000/- per kg from the purchaser. Further, on specific query, he stated that on 08/09.03.2020, unknown persons from Andhra Pradesh/Telangana approached him and requested for purchase of 2.160kgs of gold bullion on cash basis. Since he was not having sufficient stock, he made arrangement to purchase gold from unknown persons available in the market and he received commission of Rs.4300/- (@ Rs.2000/- per kg). He further stated that he did not have the details of the said two persons. As regards shortage of 910gms of gold found on comparison of stock as per records, he stated that the shortage is due to non issuance of sales bill of the same date. On being questioned about the shortage of 3258gms of gold ornaments/jewellery noticed during verification as per his records, he stated that they have transferred the said gold ornaments to their sister concern M/s Sabarish Jewellery on the previous day i.e., 12.03.2020, but they did not issue the sales invoice, because the owner was not available in the shop.
9. Follow up seach was made in the premises of M/s Venkateswara Jewellers, Narasaraopet on 17.03.2020 under panchanama and no incriminating documents or things were found. Mr. P.V.M. Jagannadha Rao, by his letter dt.23.03.2020 sent by email to Revenue, stated that the seized gold from Mr. (6) C/30327, 30328 & 30331/2023 V. Kranti Kumar and Mr. TP belongs to their firm. In response to summons (Covid period), he appeared before the officers on 23.06.2020 and his statement was recorded, wherein, he inter alia stated, that he is partner of M/s Venkateswara Jewellers and his son - Mr. P. Venkatesh is his other partner. The firm was started in October, 2017 and they were in the business of purchase and sale of gold ornaments. They also purchase gold on some occasions. They have stock of gold ornaments valued around Rs.95 lakhs and as some ornaments in stock were outdated, he got these ornaments melted into gold bars weighing 2156.370gms from a refinery. Since, no immediate buyers were available in Narasaraopet and the gold rate was less when compared to prices in other places, he contacted his friend, who was in gold business at Coimbatore, who advised him to bring the gold to Coimbatore and assured that he will assist in sale of the same at good price. Accordingly, on 08.03.2020, he sent his two clerks viz., Mr. V. Kranti Kumar and Mr. T. Prasannanjaneyulu to carry the melted gold bars to Coimbatore and approach his friend. He told them that once the suitable buyer is found, he would issue necessary invoices. He also instructed them that only after getting the amount paid into his bank account, they should hand over the gold. The said two employees reached Coimbatore on 09.03.2020 and from there, he received phone call from his clerk - Mr. V. Kranti Kumar, who informed him that on account of Covid virus outbreak, there was fall in the demand for gold and they were advised to wait about a weeks time for a good price. As he felt unsafe to ask his clerks to stay for about a week in Coimbatore with gold, he instructed his clerks to come back along with the gold. Accordingly, the said clerk Mr. V. Kranti Kumar informed him that he has booked his return journey in the evening of 09.03.2020 and will reach on 10.03.2020. In the morning of 10.03.2020, when he tried to contact his clerks over phone, their phones were not reachable. As he was down with high fever and cold coupled with restlessness and anxiety about gold, he could not take any steps immediately. Later on he was informed through his friend that gold was seized by DRI officers and his two clerks have been taken into custody. The appellant thought that gold has been seized in connection with moral code of conduct pertaining to Panchayat Raj elections, as he never heard about the DRI before. In view of the disturbances, due to corona virus, he sent his statement by email to the DRI on 23.03.2020 itself. In support of his contentions, he undertook to produce their stock register, GST Returns, Income Tax Returns, etc. He denied the depositions made by his clerks as to the bars being purchased at Coimbatore on payment of cash. He categorically stated that the gold is arising out of his stock of old jewellery melted and refined at (7) C/30327, 30328 & 30331/2023 Narasaraopet having 99.9 purity. Evidently, the gold bars are of irregular size and weight and are not of foreign origin. He also furnished the statement of stock of gold for the years 2018-19 and 2019-20. Further, he stated that the old gold ornaments weighing 2450.70gms were melted at M/s Gurudatta Bullion, Narasaraopet. The owner of which is Mr. D. Vijay Kumar having mobile no. 8297788101. He also produced copy of delivery challans dt.25.02.2020, 28.02.2020 and 03.03.2020 for sending the ornaments to M/s Gurudatta Bullion for needful. The difference in the gold jewellery issued and received back is due to removal of impurities pursuant to melting and also other alloys like Copper and Silver contained in the gold ornaments. He further stated that the purity of gold received from the refinery is ranging from 98% to 99%. On specific query, he stated that he handed over the gold comprising of bars and pieces totally weighing 2.150kgs approximately to his employees on 08.03.2020 for the purpose of sale at Coimbatore. He had given them the copy of his GST registration certificate. He was of the view that he will raise the sale invoice once the transaction was settled. However, due to unforeseen circumstances, gold could not be sold at Coimbatore. So he had asked his clerks to return with gold to Narasaraopet. He did not know M/s Kubera Bullion, Coimbatore or any person of the said firm. He categorically denied the averment/statement given by his employees Mr. V. Kranti Kumar and Mr. TP on 10.03.2020, nor he had given any cash to his said clerks for purchase of gold. Further, he stated that he neither knows Mr. Suresh Babu of M/s Kubera Bullion nor ever met him or contacted him over phone. On being shown the panchanama, wherein Mr. V. Kranti Kumar had stated that he was involved in purchase of gold without any invoice or bills for the last few months from Chennai/Coimbatore and that Mr. TP was involved in carrying melted smuggled gold of foreign origin for the past two months, he replied that Mr. V. Kranti Kumar was working with him since December, 2019 and Mr. TP was working since January 2020. He categorically stated that he had never sent them for purchase of smuggled gold and that they might have stated the same out of fear at the time of interception.
10. The statement of Mr. D. Vijay Kumar, proprietor of M/s Gurudatta Bullion refinery at Narasaraopet was recorded by the officers on 11.11.2020. He, inter alia, stated that he is running a gold refinery and does not have GST registration. He never issued bills or invoices to anybody. Further, he stated that after receipt of gold ornaments from his customers, he separates the stones, if any, thereafter, gold is poured in a mould (musa) and melted in a (8) C/30327, 30328 & 30331/2023 furnace (batti); the molten gold is poured into a mould dye (gaadi raayi) and converted into solid form and delivered to his customers. On being asked by the customers to purify the gold, the gold converted into solid state is cut into pieces melted with silver balls in a furnace and then poured in a bucket of water; after cooling of the same, balls are formed which are filled in a Borosil bowl to which nitric acid is added; the gold balls convert into Coffee colour powder and settle at the bottom; this powder is pure gold. The coffee coloured powder is again poured in a mould, melted and poured into a mould dye. Such purified gold is then delivered to the customers. His refinery has mould dies of 10gms, 100gms and 500gms; as per the requirement of customer, pure gold bar is delivered. He further stated that Mr. Vijay Kumar, Narasaraopet and Mr. P.V.M. Jagannadha Rao, Narasaraopet were his customers and stated that they owned jewellery shops; Jewellery shop in the name of Sri Kapilvay Vijayakumar belongs to Mr. Vijay Kumar while Venkateswara Jewellers belongs to Mr. P.V.M. Jagannadha Rao. Further, he stated that Mr. P.V.M. Jagannadha Rao is running gold shop for the last four years and he has given him gold jewellery four times for conversion into pure gold. Whenever Mr. P.V.M. Jagannadha Rao sent the gold, he also gives small slips of weighment. He charges Rs.3/- per gram for purification of gold for which he does not issue any bill/invoice. Further, he stated that during February, 2020, about 1kg of gold ornaments were given by Mr. P.V.M. Jagannadha Rao, which he converted into remelted gold and returned to him. In the month of March also he received approximately 1.3kg of gold ornaments for melting & purification and within two days, he gave him approximately 64gms of ornaments for purification. On being questioned, he stated that he does not maintain any written records of his transactions as regards receipt and delivery. He also stated that out of 1300gms of gold ornaments, he approximately returned 954gms of pure gold to Mr. P.V.M. Jagannadha Rao. Further, in respect of 64gms of ornaments received, he delivered 54gms of pure gold. For this work, he received around Rs.7,000/- as remuneration. On being asked as to how he could make 600gms pure gold bar when he had only 500gms of mould or dye, he replied that in 500gms mould dye, extra 100gms can be poured which helps in making the 600gms gold bar; if further more quantity is poured, it will spill out. On being shown the delivery challans of the gold ornaments dt.25.02.2020, 28.02.2020 & 03.03.2020 issued by Venkateswara Jewellers, he stated that his signature on challans are by way of acknowledgment and also of Mr. P.V.M. Jagannadha Rao. Further, he stated that the said challans were for the conversion of gold ornaments to pure gold bars. The purity of gold after processing by him is approximately 99.8 to 99.9.
(9)C/30327, 30328 & 30331/2023
11. Further facts on record are that on 20.06.2020 Mr. V. Kranti Kumar retracted his statement dt.10.03.2020 through email and also sent a hard copy/paper copy duly signed by him through post, which was received by Revenue on 23.06.2020. Similarly, Mr. TP also retracted his statement vide email dt.20.06.2020 and also followed by a signed paper copy, received through post by Revenue on 29.06.2020.
12. It appeared to Revenue that the seized gold bars/pieces totally weighing 2156.370gms, seized jointly from Mr. V. Kranti Kumar & Mr. T. Prasannanjaneyulu, the source of which has not been reasonably explained and appeared to be of smuggled nature and further, the explanation of source given by the person claiming i.e., Mr. P.V.M. Jagannadha Rao, as herein above stated, is not reliable. SCN dt.25.02.2021 was issued proposing to confiscate the seized gold - 1 gold bar and four small gold pieces totally weighing 1004.16gms valued at Rs.43,24,415/- seized from Mr. V. Kranti Kumar; and 1 gold bar and five small gold pieces of remelted gold totally weighing 1152.21gms valued at Rs.49,61,992/- seized from Mr. T. Prasannanjaneyulu are liable to confiscation under Sec 111(d) & 111(o) of the Act and Mr. P.V.M. Jagannadha Rao was also added as co-noticee in the proposal for confiscation. Further, penalty was also proposed on all the three persons. Mr. B. Suresh Babu of Kubera Bullion was also added as co-noticee, proposing to impose penalty under Sec 112(a) & 112(b) of the Act.
13. The SCN was adjudicated on contest vide common OIO dt.20.02.2022 ordering absolute confiscation of gold bars and pieces seized including packing material - cloth belt used for carrying of seized gold and imposing consolidated penalty of Rs.10,00,000/- each on Mr. V. Kranti Kumar, Rs.12,00,000/- on Mr. T. Prasannanjaneyulu; Rs.20,00,000/- on Mr. P.V.M. Jagannadha Rao and Rs.10,00,000/- on Mr. B. Suresh Babu of Kubera Bullion under Sec 112 (a) &
(b) of the Act.
14. Being aggrieved, the appellants preferred appeal before the Commissioner (Appeals), who vide impugned order confirmed the OIO by rejecting their appeals.
15. Being aggrieved, the appellants are before this Tribunal.
16. Assailing the impugned order, learned Counsel for the appellants, inter alia, stated that M/s Venkateswara Jewellers, Narasaraopet is a partnership firm of father - Mr. P.V.M. Jagannadha Rao & his son - Mr. P. Venkatesh. Mr. P.V.M. (10) C/30327, 30328 & 30331/2023 Jagannadha Rao was not in a very good health. Further, his son was interested to go abroad to pursue further studies in Australia and had cleared the IELTS examination. Accordingly, he was in need of funds of around Rs.50 lakhs. So, he decided to get old stock of gold jewellery coverted and accordingly, in the normal course of business, they sent the old jewellery to the refiner M/s Gurudatta Bullion and received back the purified gold bars and pieces. The fact of melting of old ornaments and converting to gold bars and pieces has also been supported by the refiner Mr. D. Vijay Kumra of M/s Gurudatta Bullion. As the appellant - Mr. P.V.M. Jagannadha Rao was not getting good prices for refined gold at Narasaraopet, he gave his employees - Mr. V. Kranti Kumar and Mr. T. Prasannanjaneyulu part of the gold, totally weighing about 2.152 kgs and directed them to go to Coimbatore for sale. He had also given a copy of his GST registration number and instructed that once the payment is received for sale in his bank account, he will issue the invoice and thereafter, only the staff should deliver the gold to the buyer. Evidently, due to bad market conditions, in view of the prevailing Covid threat around 09.03.2020, they could not find buyers for gold at Coimbatore, he advised his staff to return back. Admittedly, during such return journey, both his staff were intercepted by the DRI officers and the gold was seized. It is further urged that the appellant - Mr. P.V.M. Jagannadha Rao (owner) has led cogent evidence by producing his business records, which covers the seized gold in question. Further, at the very first instance, after interception, Mr. P.V.M. Jagannadha Rao, in his statement sent to the DRI on 23.03.2020, had stated these facts. At the very first opportunity, when his statement was recorded by the officers, he has denied the statement recorded from his two staff at the interception cum seizure on 10.03.2020. He further stated that admittedly, both the said staff have also retracted their statements which was recorded by the officers on 10.03.2020 at the time of interception/panchanama proceedings. The cogent evidence led by the appellant has not been found to be untrue. Further, he urges that the statement recorded by the officers from his two staff on 10.03.2020 is the sole basis, as read with the statement of Mr. B. Suresh Babu, partner of Kubera Bullion. The said statements only raise assumptions and presumptions, having no legs to stand.
17. It is furthe urged that the appellant/claimant - Mr. PVM J Rao has filed statement of gold for the financial years 2018-19 and 2019-20, copy of delivery challans dt.25.02.2020 & 03.03.2020, issued by him for getting the gold ornaments converted into gold bars through Mr. D. Vijay Kumar of Gurudatta (11) C/30327, 30328 & 30331/2023 Bullion Refinery - Refiner of gold and silver at Narasaraopet, copy of GSTR 3B returns for the period 2018-19 and 2019-20, sale and purchase invoices for these two financial years, Income Tax returns for these two financial years, copy of bank statement of their firm - M/s Venkateswara Jewellers and its partners for the period 01.04.2018 to 31.03.2020. All the aforementioned records support the contention of the appellant that the gold in question was part of their stock in trade.
18. It is further urged that the statements of the two other appellants namely Mr. VK Kumar and Mr. TP were recorded immediately at the time of interception and seizure and both the persons had signed on the dictated statements by the officers. Both of them were under undue influence and duress during the relevant time. Further, both the persons, at the first opportunity of there being some ease in the Covid pandemic situation, have retracted their statements by sending email to the Customs Authority, followed by duly signed paper copy which has been received by the Revenue. Such statements were also not accepted by the owner/claimant - Mr. PVMJ Rao, at the very first instance.
19. Learned Counsel further relies on the ruling of the Apex Court in the case of Vinod Solanki vs UOI in Civil Appeal No. 7407/2008, wherein it has been held
- a person accused of commission of an offence is not expected to prove to the hilt that confession had been obtained from him by any inducement, threat or promise by a person in authority. The burden is on the prosecution to show that the confession is voluntary in nature and not obtained as outcome of threat, etc., if the same is to be relied upon solely for the purpose of securing a conviction. Further, observed - with a view to arrive at findings as regards the voluntary nature of statement or otherwise of a confession, which has since been retracted, the Court must bear in mind the attending circumstances which would include the time of retraction, the nature thereof, the manner in which such retraction has been made and other relevant factors. Law does not say that the accused has to prove that retraction of confession made by him was because of threat, coercion, etc., but the requirement is that it may appear to the court as such.
20. Admittedly, in the facts of the present case, the gold bars are of irregular size and weight, having no foreign markings. Thus, there is no evidence on record as to the smuggled nature of the gold in question. Admittedly, it is a case of town seizure and the person carrying gold was travelling from Coimbatore to Narasaraopet/Vijayawada. Thus, there is no basis available to (12) C/30327, 30328 & 30331/2023 Revenue for forming the opinion that the gold in question is of smuggled in nature. The said presumption is solely based on the statement recorded from other two appellants, namely, Mr. VK Kumar and Mr. TP, whose statements are more or less pari materia, which also indicates that both these persons have signed on the statements as dictated by the officers. Further, Revenue has failed to examine its witnesses in the course of adjudication proceedings, in spite of specific prayer by the appellant/claimant - Mr. PVMJ Rao. Such evidence recorded under Sec 108 during investigation of the other appellants as well as Mr. B. Suresh of Kubera Bullion, is fit to be rejected being inadmissible under the provisions of Sec 138B of the Act. The statement of the alleged seller Mr. B. Suresh of Kubera Bullion, Coimbatore, is also apparently not freely given, as on the day of inspection at his shop, there was some discrepancy found in the stock of gold/jewellery and accordingly, he has given the statement as dictated by the officers. This is further evident from the facts on record as the statement of Mr. V.B. Vimal of Srinidhi Gold, Coimbatore, recorded on 12.03.2020 and the statement of Mr. B. Suresh of Kubera Bullion, Coimbatore, recorded under Sec 108 are more or less pari materia.
21. So far the onus to discharge burden of proof under Sec 123 of the Customs Act is concerned, it is urged that the appellant/claimant has discharged the onus by submitting business records including bank statement and copy of returns filed with GST department and Income tax department, which supports the stock position of the appellant with respect to gold/gold jewellery. Thus, the appellant has discharged the onus upon him under Sec 123 of the Customs Act as to the source of the gold in question.
22. Opposing the appeals, learned AR for Revenue relies on the impugned order. He urges that both the appellants/carriers - Mr. VK Kumar and Mr. TP had stated, at the very first instance upon interception and seizure, that they had carried cash with them to Coimbatore and had purchased gold by paying cash through Kubera Bullion, Coimbatore, which facilitated the purchase of gold without any invoice. This fact has been supported by the person in charge of the Kubera Bullion - Mr. B. Suresh, in his statement recorded under Sec 108 of the Act. Thus, the fact of purchase of gold from Coimbatore on payment of cash stands corroborated. He further urges that the transaction in gold without issue of proper invoice/challan itself indicates the smuggled nature of the gold/goods. Accordingly, he prays for dismissal of the appeals.
(13)C/30327, 30328 & 30331/2023
23. Having considered the facts and circumstances and rival contentions, I find that save and except the statement recorded from Mr. VK Kumar and Mr. TP at the time of interception and seizure of the gold in question, read with the statement of Mr. B. Suresh, there is no other evidence available to Revenue for assuming or forming opinion that the gold in question is of foreign origin and/or smuggled. Admittedly, the gold bars seized are of irregular shape and size and also of irregular weight other than standard gold bars. Admittedly, there is no marking of any foreign refinery on the gold bars seized. I further find that the statements recorded by Revenue from both the appellants/staff - Mr. VK Kumar and Mr. TP are pari materia and hence, it is apparent that such statements are not freely given but the person deposed have signed on the dotted line. Similarly, the statement of Mr. B. Suresh recorded under Sec 108 also does not inspire confidence. The officers did not pose any question to him as to how he came in contact with unknown persons, did he have their mobile numbers and what is the basis of stating that the gold sold through him by unknown persons was smuggled gold. It is also beyond comprehension that a person engaged in gold business for a long time, not usually entertaining cash dealings, will get involved in facilitating the purchase of smuggled gold from unknown person for a paltry commission of Rs.2,000/- per kg. I further find that the statement of Mr. B. Suresh is not admissible for denial of cross-examination and accordingly, the same is inadmissible in terms of Sec 138B of the Act.
24. I further find that the appellant/claimant - Mr. PVMJ Rao has lead cogent evidence with regard to availability of stock, evidence of conversion of old gold ornaments to gold bars and pieces through refinery at Narasaraopet and the said refiner has also confirmed melting of old gold jewellery and thereafter, refining the gold and delivering gold bars and pieces to the appellant. I further find that these facts are also supported by the Income Tax and GST records of the appellant as well as the books of accounts maintained in the ordinary course of business. So far the statement of Mr. PVMJ Rao is concerned, at the very first instance, he has stated these facts and had also categorically denied the statement recorded by the officers from his aforementioned two staff, viz., - Mr. VK Kumar and Mr. TP. Thus, I find that the cogent evidence led by the appellant has not been found to be untrue and the same has been rejected arbitrarily. I further find that in view of the evidence led by the appellant, they have discharged the onus under Sec 123 of the Act as to the licit source of the gold in question.
(14)C/30327, 30328 & 30331/2023
25. Accordingly, in view of my findings and observations herein above, I allow all the appeals and set aside the impugned orders. The appellant - Mr. P.V.M. Jagannadha Rao is held entitled to receive back the gold, and if the same is already disposed of by the department, shall be entitled to receive the sale proceeds of the same with interest as per Rules. All penalties also stand set aside.
26. Appeals allowed.
(Pronounced in the Open Court on 18.03.2024) (ANIL CHOUDHARY) MEMBER (JUDICIAL) Veda