Custom, Excise & Service Tax Tribunal
Mr. P.K. Kunhi Mohammad vs Cc, Cochin on 22 February, 2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing:03/12/2009
Date of decision:..
Appeal No.C/710/08
(Arising out of Order-in-Appeal No.213-217/2008 dt. 30/6/2008 passed by Commissioner(Appeals), Cochin)
For approval and signature:
Honble Mr. M.V.Ravindran, Member(Judicial)
Honble Mr. P.Karthikeyan, Member(Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
Yes
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
Mr. P.K. Kunhi Mohammad
..Appellant(s)
Vs.
CC, Cochin
..Respondent(s)
Appearance Mr.P.A.Augustine, Advocate for the appellant.
Ms. Sudha Koka, SDR for the Revenue.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) Honble Mr. P.Karthikeyan, Member(Technical) FINAL ORDER No._______________________2010 Per P.Karthikeyan This appeal filed by Shri P.K.Kunhi Mohammad seeks to vacate the impugned order which sustained confiscation of 31 gold biscuits of foreign origin weighing 3611 gms., Indian currency of Rs.11,800/-, packing material for the gold seized and penalty of Rs.36,000/- imposed on the appellant. Facts in brief are that the appellant was intercepted on his journey home by train from Mumbai at Kannur by the Customs preventive officers of Kasargod. 31 gold biscuits of foreign origin valued Rs.16,28,786/-, Indian currency of Rs.11,800/-, cellophane tapes and a cloth bag used to pack the gold bars were seized from him under a Mahazar. The evidence collected in the nature of statements recorded from the passenger and a chit recovered from him indicated that the gold seized was smuggled into India and the Indian currency seized was sale proceeds of smuggled foreign currency. After due process of law, the original authority confiscated the gold biscuits under Section 111d of the Customs Act, 1962(the Act) as well as under Section 121 of the Act. He held that the gold bars had been procured on barter with smuggled foreign currency and the gold bars were sale proceeds of illegal foreign currency. Currency for Rs.11,800/- were confiscated also under Section 121 being sale proceeds of smuggled foreign currency. The packing materials were confiscated under Section 119 of the Act.
2. In the appeal filed before the Tribunal, the main ground raised is that the appellant was not required to carry any transport document prescribed under any law when he carried the gold bars from Mumbai to Kerala. The gold bars were not prohibited goods. These were licitly procured for resale at a margin in Kerala. The appellant was an employee of one Shri V.K. Mohammed Ali and the gold bars were purchased using funds provided by him for his business of dealing in gold. The Indian currency seized was not sale proceed of foreign currency illegally procured. The Departmental officers were not certain if the seized gold was liable for confiscation as sale proceeds of smuggled foreign currency or for the reason that the gold bars themselves were smuggled. The authorities were finding it difficult to come to terms with the liberalized policy in regard to import of gold. There was no restriction imposed for carrying gold within the country. The gold bars had been purchased from a trader in Mumbai, the particulars of which had been furnished to the authorities. The Act did not require that gold shall be purchased under any prescribed document and such document should accompany such gold when carried within India. The officers had extracted statements by force in order to implicate him in a case of smuggling of gold and foreign currency. The case was foisted on him with malafide by the officers. It was prayed that the impugned order being bad in law may be quashed.
3. We have heard both sides. We find that gold is an item notified under Section 125 of the Act. Neither the carrier of the gold or Shri V.K.Mohammed Ali who claimed the ownership of the gold produced any document to establish the licit procurement of gold bars seized. Had the gold bars been purchased in a legal manner, there would have been no difficulty for Shri P.K.Kunhi Mohammad to give details of the seller or any other licit source. In the absence of any evidence of legal procurement of the gold bars of foreign origin, the Commissioner(Appeals) was correct in sustaining the confiscation of the gold bars under Section 111(d) of the Act. He also sustained the penalty imposed on Shri P.K.Kunhi Mohammad under Section 112 of the Act as appropriate and not excessive. As regards the Indian currency, the original authority inferred from particulars appearing on a chit recovered from the appellant that the currency of Rs.11,800/- was balance Indian rupees obtained on conversion of foreign currencies after paying the consideration for the gold bars. Thus he sustained confiscation of gold bars as sale proceeds of smuggled foreign currency under Section 121 of the Act. We find that the impugned order does not render any finding as regards the liability to confiscation or otherwise of Indian currency seized from the appellant. We remand the case for the purpose of deciding this aspect and to redetermine the penal liability of the appellant also in view of the finding to be made as regards the Indian currency. The impugned order is otherwise sustained to the extent it relates to the appellant. The appeal is thus allowed by way of remand.
(Pronounced in court on ..) (P.KARTHIKEYAN) Member (Technical) (M.V. RAVINDRAN) Member (Judicial) Nr 4