Custom, Excise & Service Tax Tribunal
Neeta Prakash Modi vs Commissioner Of Customs (Prev.), ... on 11 March, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. C/751/08 Mum
(Arising out of Order-in-Original No. CCP/ADJ/SR/05/2008 dated 31.3.2008 passed by the Commissioner of Customs (Prev.), Mumbai).
For approval and signature:
Honble Shri. B.S.V. Murthy, Member (Technical)
and
Honble Shri Ashok Jindal, Member (Judicial)
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
Neeta Prakash Modi
:
Appellant
Versus
Commissioner of Customs (Prev.), Mumbai
Respondent
Appearance Shri Vishal Agarwal, Advocate with for Appellant Shri Sunil Nawandhar, C.A. Shri T. Tiju, SDR for Respondents CORAM:
Shri. B.S.V. Murthy, Member (Technical) Shri. Ashok Jindal, Member (Judicial) Date of Hearing : 11.3.2010 Date of Decision : 11.3.2010 ORDER NO.
Per : Ashok Jindal Neeta Prakash Modi the appellant has filed this appeal against the order confirming absolute confiscation of diamonds weighing 154.04 carets under Section 111(o) of the Customs Act, 1962. The appellants deceased husband Shri Prakash J. Modi was engaged in the business of the purchase and sale of cut and polished diamonds in the name and style of M/s. Koshin Gems as a sole proprietor. The said proprietary firm was registered with the Sales Tax department. It was also allotted RBI code and Import Export code. The appellant submits that the firm did not deal in rough diamonds. The firm was maintaining their books of accounts and having supporting bills / vouchers and documents with regard to their activities. The case of the department against Shri Prakash J Modi is that he had smuggled diamonds into India and it is these smuggled diamonds that were seized from him on 18.01.1991 in the office premises of M/s. Yogey Diamonds. Show-cause notice was issued and the seized diamonds were absolutely confiscated and penalty was imposed. Aggrieved by the said order, Shri Prakash J Modi challenged before this Tribunal and this Tribunal remanded the matter for fresh adjudication. In remand, the Commissioner of Customs again confirmed absolute confiscation of diamonds but penalty was dropped as Shri Prakash J Modi died during the course of proceedings. Smt Neeta Prakash Modi, Wife of deceased Shri Prakash J Modi filed this appeal before us.
2. Shri Vishal Agarwal, learned Advocate appearing on behalf of the appellant submits that the absolute confiscation of the seized diamonds is illegal and without any basis of law. He submitted that the seized diamonds were bona fide purchase. To support this, he produced a photocopy of the purchase bill and submitted that the firm in which these diamonds were purchased were registered with Sales Tax department, it had also been allotted RBI code, the transactions of these diamonds are absolutely within the provisions of law, the statement recorded of Shri. Prakash Modi was retracted within a weeks time and all the purchase of the impugned diamonds have been entered in the books of account. In that set of situation, burden to prove the illicit purchase thereof lies with the Revenue and the Revenue has failed to establish that they are smuggled goods, hence, the impugned order be set aside.
3. On the other hand, the learned SDR submitted that the appellant himself has admitted that he was involved in smuggling of the seized diamonds and the books of account were prepared after seizure of all the documents, hence the diamonds are liable for absolute confiscation and the impugned order be upheld.
4. We find that while remanding the matter for fresh adjudication, this Tribunal has given these findings which are reproduced as under:-
From the Commissioners order we find that the burden has been sought to be discharged by reliance upon the statement of Mr. Prakash Modi who had admitted that the diamonds were smuggled. However, the statement was retracted within a period of one week, i.e. on 25.1.1991, and further the record shows that Mr. Prakash Modi had taken stand that all the diamonds were accounted for in the books of account of the firm of M/s. Koshin Gems and the books of account had been filed with the sales tax authorities on 9.1.1991, along with application for registration and Mr. Prakash Modi had also taken the plea in the reply to the show-cause notice that all the diamonds seized were duly accounted for. He had also produced payment receipts showing payment for the diamonds. These documents have not been analysed or commented upon by the Commissioner in the impugned order. Therefore, it is not possible for us to give a finding as to whether the purchases were really bona fide or not and this finding is required to be recorded by the adjudicating authority. We, therefore, set aside the impugned order and remit the case to the jurisdictional Commissioner to record a specific finding, on the basis of the documents produced by the appellant, as to whether the purchases of diamonds seized from Mr. Prakash Modi on 18.1.1991 were bona fide or not.
5. We further find that this Tribunal has directed the Commissioner to record specific finding on the basis of the documents produced by the appellant, as to whether the purchases of diamonds seized from Mr. Prakash Modi were bona fide or not. While adjudicating the case, the Commissioner gave his finding as given under:-
The contention of the Noticee that the said diamonds are not notified goods under Section 123 of the Customs Act, 1962 and therefore the onus is on the department to prove the smuggled nature of said diamonds and there is no evidence in this regard is not sustainable as it is now well settled that even in the case of goods not notified under Section 123 of the Customs Act, 1962 the burden of proof shifts from one to another when the department gave every possible opportunity to explain as to how they came to possess them. There were ample opportunity available to the Noticee to come forward with the documents which could be verified to prove his claim. He all the time maintained that he had the relevant documents but at the same time ascertained nor to submit any verifiable documents. It was the strategy of the Noticee to claim every time that the seized diamonds were procured legally without submitting any documents which could be verified so as over the period of time, the documents become unverifiable. The Noticee, in fact, has not submitted any verifying evidence in support of their purchase. Unless he submit the source of procurement of said diamonds, the burden can not shift to the department to prove that the said diamonds were improperly imported or smuggled.
6. We have seen the findings given by the Commissioner that every possible opportunity was given to the appellant to explain how they come to the possession of the seized documents but from the records we find the appellant has produced the purchase vouchers of the diamonds in question. The Commissioner has failed to verify those vouchers whether they are genuine or not. The Commissioner further failed to verify from the seller of these diamonds to the appellant as the name of the seller are on record. The Commissioner has failed to give any findings on the corroborative evidence to prove that the purchase of the impugned diamonds is not genuine. We have gone through the reliance placed by the learned Advocate in the case of Rang Birangi Sarees (P) Ltd vs. CC, Kolkata 2007 (219) ELT 574 (Tri. Kolkata) wherein this Tribunal has held that in the event of seizure of non-notified goods, burden of proof is on the Revenue to prove that there was illegal import and inability of the litigant to produce documents showing legal importation does not ipso facto prove the goods were smuggled. The same view has been confirmed by the Honble High Court of Calcutta in CC (Prev.) vs. Raj Kumar Jaiswal 2006 (204) ELT 561 (Cal.). In this case, we find that the appellant has been able to produce the documents with regard to purchase of the seized documents but the department has failed to discharge their burden to prove that these documents are fabricated and the diamonds in question are smuggled one. In such set of situation, benefit of doubts goes in favour of the appellant. Accordingly, we set aside the impugned order and the appeal is allowed.
(Pronounced in open Court) (B.S.V. Murthy) Member (Technical) (Ashok Jindal) Member (Judicial) nsk 6