Custom, Excise & Service Tax Tribunal
Shri Suneel Yadav vs Ce & Cgst Lucknow on 26 July, 2023
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Customs Appeal No.70646 of 2019
(Arising out of Order-in-Appeal No.443-444-Cus/APPL/LKO/2018 dated
27/08/2018 passed by Commissioner (Appeals) Customs, GST & Central
Excise, Lucknow)
Shri Suneel Kumar Yadav, .....Appellant
(Village- Dogahara, Post- Dogahara,
District-Maharajganj-273305)
VERSUS
Commissioner of Customs, GST &
Central Excise, Lucknow ....Respondent
(Lucknow) WITH Customs Appeal No.70647 of 2019 (Arising out of Order-in-Appeal No.443-444-Cus/APPL/LKO/2018 dated 27/08/2018 passed by Commissioner (Appeals) Customs, GST & Central Excise, Lucknow) Shri Satyendra Kumar, .....Appellant (Village- Hariharpur, Post- Mujhama Bujurg, District-Maharajganj-273303) VERSUS Commissioner of Customs, GST & Central Excise, Lucknow ....Respondent (Lucknow) APPEARANCE:
Shri Shambhu Chopra, Advocate & Ms. Mahima Jaiswal, Advocate for the Appellants Shri Manish Raj, Authorised Representative for the Respondent CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NOs.70015-70016/2023 DATE OF HEARING : 26 July, 2023 DATE OF DECISION : 26 July, 2023 Customs Appeal Nos.70646-70647 of 2019 2 SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Appeal No.443- 444-Cus/APPL/LKO/2018 dated 27.08.2018 of the Commissioner Customs, Central Goods and Service Tax and Central Excise (Appeals) Lucknow. By the impugned order Commissioner (Appeal) has dismissed the appeals filed by the two appellants before me, upholding the order of Additional Commissioner, Customs, Lucknow.
1.2 Additional Commissioner has vide his Order-in-Original No 79-Cus/2015 dated 29.12.2015 held as follows:-
(i) मैं ऄभभग्रभित ५०० ग्राम भिदेशी सोने के भबस्कुट को, भिसका अंका गया कुल मल्ू य रु० १३,४५,०००/- िै, को सीमा शल्ु क ऄभधभनयम 1962 की धारा 111 के ऄन्तगगत पर्ू ग ऄभधग्रिर् का अदेश देता ि।ूँ
(ii) मैं ज्ञापी स०ं १ श्री सभु नल कुमार यादि पर सीमा शल्ु क ऄभधभनयम, 1962 की धारा ११२ के ऄन्तगगत रु० १,००,०००/- की शाभस्त लगाने का अदेश देता िूँ ।
(iii) मैं ज्ञापी सं० २ श्री सत्येन्र कुमार पर सीमा शल्ु क ऄभधभनयम, 1962 की धारा ११२ के ऄन्तगगत रु० १,००,०००/- की शाभस्त लगाने का अदेश देता िूँ ।
(iv) मैं ज्ञापी स०ं ३ श्री कृ ष्र् मोिन यादि ि ज्ञापी स०ं ४ श्री बेचन यादि को ईपरोक्त भििेचन भनष्कर्षों के अधार पर शाभस्त से मभु क्त का अदेश देता िूँ ।
(v) मैं बरामद मोटरसाआभकल भिसका पंिीकरर् संख्या य०ू पी० ५३ ए० िे० 9284 को सीमा शल्ु क ऄभधभनयम, 1962 की धारा 115 के ऄन्तगगत ऄभधग्रिर् का अदेश देता िूँ तथा साथ में िािन स्िामी को रु० ७५००/- का भिमोचन शल्ु क िमा करने के ईपरातं ईपरोक्त िािन को भिमोभचत करने का भिकल्प देने का अदेश देता ि।ूँ क्योंभक ईक्त िािन की रु० ७५००/- की कै श भसक्योररटी के अधार पैट सामभयक ईन्मभु क्त िो चक ु ी िै, ऄतः ईन्मभु क्त की ईपरोक्त धनराभश को भिमोचन शल्ु क में समायोभित करने का अदेश देता िूँ ।
Customs Appeal Nos.70646-70647 of 2019 3
(vi) क्योंभक ईक्त ऄिैध भिदेशी सोने के भबस्कुट का िास्तभिक स्िामी ऄज्ञात िै, आसभलए "भिस भकसी से भी संबंभधत िो ज्ञापी के भिरुद्ध सीमा शल्ु क ऄभधभनयम, 1962 की धारा ११२ के ऄन्तगगत ऄपने शाभस्त लगाने के ऄभधकार को सरु भित रखता िूँ ।
1.3 These two appeals have been filed by the appellant being aggrieved by the order in appeal upholding (ii) and (iii) of the order in original as above, against the two appellants before me. I am therefore considering the appeals against this part of the order and nothing else. The observations made in this order should not constrain operation of any other part of the above order in original.
2.1 The officers of Kotwali Police, Thoothibari, District Maharajganj handed over foreign origin gold weighing 500 grams along with Shri Suneel Kumar Yadav (Appellant 1) to the officers of land Customs Stration (LCS) Thoothibari for further action under Customs Act, 1962.
2.2 Appellant 1 in his statement dated 26.11.2014 admitted that the impugned gold was recovered from his jacket while he was coming from his village with his brother by Motor Cycle bearing No UP 53 AJ 9284. He further stated that he is constable of SSB posted in Narkatiyaganj and the gold biscuites were recovered at Siswa railway station from a passenger by Shri Satyendra Kumar (Appellant 2).
2.3 Shri Alok Pandey, Sub Area Organizer, SSB, Narkatiyaganj, Bihar, in his statement dated 31.03.2015 stated that Thoothibari police informed him regarding recovery of the said gold from the possession of the appellant - 1. he further stated that both the appellants were deputed for execution of information of gold smuggling but they did not report recovery of the impugned gold.
2.4 As the recovered gold appeared liable for confiscation under Section 111 of the Customs Act, 1962 and both the appellants liable to penalty under Section112 ibid, a Show Cause Customs Appeal Nos.70646-70647 of 2019 4 Notice dated 18.05.2015 was issued to appellant 1 and 2 stating as follow:
"ऄतः श्री सनु ील कुमार यादि एिं श्री सत्येंर कुमार दोनों भसपािी, एस० एस० बी० नरकभटयागिं को एतदद्वारा यि अित भकया िाता िै भक िे ऄपर अयक्त ु (प्रभारी मंडल नौतनिां) सीमा शल्ु क अयक्त ु ालय, पचं म ताल, कें रीय भिन, सेक्टर -एच० ऄलीगंि, लखनउ -२२६०२४ (ई० प्र०) को कारर् बताये भक क्यों न ईन पर ईपयगक्त ु ऄभधभनयम एिं ऄभधसचू ना के प्रािधानों का ईल्लंघन करने के कारर् ऄभधभनयम की धारा ११२ के ऄंतगगत िमु ागना लगाया िाये ।"
3.1 I have heard Shri Shambhu Chopra and Ms Mahima Jaiswal Advocates for the Appellants and Shri Manish Raj, Authorized Representative for the revenue.
3.2 Arguing for the appellants learned counsel submits, that none of the lower authority has heard the appellant before passing the order. Commissioner (Appeal) has in impugned order in para 5 recorded "Personal hearing in the case was fixed on 18.01.2018, 27.06.2018 and 31.07.2018, but nobody attended the same." Having not allowed any hearing in the matter Commissioner (Appeal) has passed the impugned order in violation of the principles of natural justice.
3.3 Arguing for the revenue learned authorized representative re-iterated the findings recorded in the impugned order.
4.1 I have considered the impugned order along with the submissions made in appeal and during the course of arguments.
4.2 Commissioner (Appeal) has in the impugned order recorded as follows for holding against the appellants:
"6. I have gone through the case record. it is apparent from the record that the appellants were deputed for execution of intelligence regarding gold smuggling and impugned gold was recovered from a person who reportedly ran away from their custody. However, recovery of the impugned smuggled gold was not reported to the higher officers of SSB. There is no official record of said recovery. The smuggled nature of the gold is not Customs Appeal Nos.70646-70647 of 2019 5 in dispute. The appellants were found to have acquired the possession of impugned gold and were concerned in carrying the same knowing very well that the same was liable to confiscation under the said Act. Therefore, the penalty imposed on the appellant is sustainable."
4.3 Original authority has in his order recorded as follows for imposing the penalty under section 112 of Customs Act, 1962 on the appellants:
"2. िाद के तथ्यों के ऄनसु ार, श्री सनु ील कुमार यादि (ज्ञापी स०ं १) ि श्री सत्येंर कुमार (ज्ञापी स०ं २) एस एस बी नरकभटयागिं , भबिार में पदस्थाभपत थे । ईक्त दोनों ज्ञभपयों के ऄभधकारीयों द्वारा ईनकी ड्यटू ी एक सचु ना के अधार पर मिु फ्फरपरु से गोरखपरु िाने िाली ट्रैन की चेभकंग के भलए लगाइ गइ थी भिसके द्वारा भिदेशी स्िर्ग भबस्कुट की तस्करी द्वारा लाये िाने के सचु ना प्राप्त िुइ थी । कभथत तौर पर ईपरोक्त सिगश्री सनु ील कुमार यादि ि सत्येंदर कुमार ने मिु फ्फरपरु से गोरखपरु िाने िाली पैसेंिर ट्रैन से सबया ि् भससिा बाज़ार स्टेशन के बीच सचू ना के ऄअधार पर, एक व्यभक्त से बरामद भकया भकन्तु िि व्यभक्त भससिा बािार में भाग गया । ईपरोक्त ज्ञभपयों के ऄभधकारीयों का कथन िै भक ज्ञभपयों की ड्यटू ी ईक्त िेतु से ऄिश्य लगाइ गयी थी, भकन्तु स्िर्ग बरामदगी ि ईसके बाद तस्कर के भागने की सचू ना ज्ञभपयों ने ईन्िें निीं दी । सनु ील कुमार यादि ि सत्येंर कुमार का कथन िै भक ईनका ईनके ऄभधकारीयों से फ़ोन पर संपकग निीं िो पा रिा था तथा ईस समय िापसी के भलए कोइ ट्रैन न िोने के कारन िे ऄपने ऄपने घर िा रिे थे । यद्यभप श्री सनु ील कुमार यादि का कथन िै भक ईन्िोंने ऄपने ऄभधकारी श्री पी० के ० श्रीिास्ति, एररया अगेनाआिर को फ़ोन द्वारा ईक्त स्िर्ग की बरामदगी की सचु ना दी थी ।
3. यिाूँ यि तथ्य मित्िपर्ू ग िै भक ऄभभग्रभित स्िर्ग भबस्कुटों के भिदेशी िोने ि भारत में ऄिैध रूप से अयाभतत िोने को लेकर भकसी भी तरि का भििाद निीं िै। आन स्िर्ग भबस्कुटों के स्िाभमत्ि का दािा करने के भलए कभी भी कोइ व्यभक्त सामने निीं अया। िाद पत्रािली में ईपलब्ध समस्त तथ्यों ि् साक्ष्यों से यि पर्ू गतया भसद्ध िोता िै भक Customs Appeal Nos.70646-70647 of 2019 6 ईक्त ऄभभग्रभित भिदेशी स्िर्ग भबस्कुट भारत में ऄिैध रूप से अयाभतत िोने के कारन पर्ू गतया ऄभधग्रिर् योग्य िै ।
4. आस प्रकरर् में यि ध्यान देने योग्य िै भक ज्ञभपयों ने गप्तु सचू ना के अधार पर सिम ऄभधकारीयों के द्वारा ऄभधकृ त भकये िाने के ईपरांत ट्रैन से एक व्यभक्त के पास से स्िर्ग भबस्कुटों को बरामद भकया था। आस तथ्य को ऄसत्य भसद्ध करने के भलए िाद पत्रािली में भकसी प्रकार का कोइ साक्ष्य ईपलब्ध निीं िै। यि ऄिश्य ईल्लेखनीय िै भक बरामद स्िर्ग भबस्कुटों को िापस ऄपने कायागलय में िाकर सौंपने के बिाय ईपरोक्त दोनों ज्ञापी स०ं १ ि २ ऄनभधकृ त रूप से ऄपने घर िा रिे थे िबभक ज्ञापी स०ं १ को पभु लस ने ईक्त स्िर्ग भबस्कुट के साथ रोक भलया। आसके साथ यि ऄत्यंत मित्िपर्ू ग िै भक ज्ञापी संख्या १ ि २ ने सीमा शल्ु क ऄभधभनयम १९६२ की धारा १०८ के ऄंतगगत भदए गये ऄपने स्िैभछिक बयानों में स्िीकार भकया िै भक ईपरोक्त स्िर्ग भबस्कुटों को ५ से ६ लाख रुपये भमल िाने पर आस स्िर्ग भबस्कुटों को िोड़ देने की ईनकी योिना थी। भकन्तु आस योिना के फलीभतू न िोने पर ईन्िोंने आन स्िर्ग भबस्कुटों को स्ियं िड़पने की योिना बनाइ। ऄपने बचाि प्रभतईत्तर में ईनका यि किना की ईनका यि किना की ईपरोक्त बयान दबाि में भदया था भकसी स्ितंत्र सियोगी साक्ष्य (independent supporting evidence) के अभाि में भसद्ध निीं िोता। ऄतः ईनके ईपरोक्त बयान को स्िैभछिक न मानने तथा पख्ु ता साक्ष्य के रूप में प्रयक्त ु न भकये िाने का कोइ अधार निीं िै। ईनके ईछच ऄभधकाररयों द्वारा भदए गए बयानों से भी ईपरोक्त तथ्यों को पयागप्त बल भमलता िै। ईपरोक्त कारर्ों से मैं ज्ञापी संख्या १ ि २ सिगश्री सनु ील कुमार यादि ि सत्येंर कुमार सीमा शल्ु क ऄभधभनयम, 1962 की धारा ११२ के ऄन्तगगत शाभस्त करने के योग्य पाता ि।ूँ "
4.4 As per para 10 of the of the order in original, in his statement recorded under Section 108, on 10.02.2015, Shri Satyendra Kumar (Appellant 2) had stated as follows:
"भदनांक २५. 11. २०१४ को लगभग शाम ३.२० बिे ईन्िें श्री अलोक कुमार पांडेय, सब एररया अगेनाआिर ने बल ु ा कर बताया भक सप्तक्ाभं त ट्रैन िो मज़ु फ़्फ़परु से भदल्ली Customs Appeal Nos.70646-70647 of 2019 7 िाती िै ईसमे सोना अ रिा िै, तमु सनु ील के साथ िाओ। िि और सनु ील कुमार यादि दोनो नरकभटयागंि रे लिे स्टेशन गये और ट्रैन अने पर िे लोग ट्रेन में चढ़ गये और आस दौरान सनु ील और ईसके आनफॉमगर से लगातार फ़ोन से बात िो रिी थी। ट्रेन बगिा पिुचूँ ने से पिले िि व्यभक्त भमल गया, ट्रेन बगिा स्टेशन पर पिुचूँ ने पर िे ईस व्यभक्त को लेकर ट्रैन से ईतर गये ईसके बाद ईस व्यभक्त की तलाशी में सोना भमल गया िो तीन पीस में था भिसका ििन ५०० ग्राम था। ईसके बाद सनु ील ने ईनके ऄभधकारी श्री ऄलोक पांडेय, सबु एररया अगेनाआिर ि श्री एस० के ० शमाग सबु एररया अगेनाआिर से फ़ोन में बात भकया भफर करीब १. ३० घंटे के बाद ईनके दोनो ऄभधकारीगर् बगिा में सरकारी गाड़ी लेकर अये और िे पकडे गए व्यभक्त के साथ बगिा स्टेशन से नरकभटयागिं के तरफ लगभग ५ भक० मी० चलने के बाद सनु सान िगि पर ऄभधकाररयों ने गाड़ी रोक भदया। दोनो ऄभधकारी सनु ील एिं पकड़ा गया व्यभक्त गाड़ी से ईतर कर करीब २० भमनट तक चारो लोग अपस में बात करते रिे और भफर िे चार गाड़ी में बैठ कर नरकभटयागंि की ओर चल भदए, नरकभटयागंि ि बगिा के बीच िरीनगर रे लिे स्टेशन पर रुके और ििां पर ईनके दोनो ऄभधकारीयों ने ईनसे किा भक तमु सनु ील के साथ िाओ िैसा किे िैसा करो। िि और सनु ील पकडे गए व्यभक्त को लेकर गोरखपरु की ओर िा रिी पैसेंिर ट्रैन में बैठ गये। ट्रैन में सनु ील ने बताया भक पकडे गए सोने के सम्बन्ध में कुि बात िुइ िै ईनको भससिा चलना िै ििी ूँ पर पाटी भमलेगी, िे लोग राभत्र लगभग ११. ३० बिे भससिा पिुचं े ट्रैन में बिुत भीड़ थी, नीचे ईतारते समय एक व्यभक्त नीचे भगरा और सनु ील से झगड़ने लगा आसी बीच िि तस्कर भिसके पास से सोना बरामद िुअ था ऄूँधेरे ि भीड़ का फायदा ईठाकर भाग गया। तब सनु ील ने बताया की ईससे ६ लाख रुपये लेना था िि यिाूँ पिुचूँ भकसी व्यभक्त से भदलिाता ि सोना िापस ले लेता। सनु ील ने बताया भक यि बात ईनके दोनो ऄभधकारी श्री ऄलोक पांडेय ि श्री एस० के ० शमाग भी िानते िैं। सनु ील ने श्री एस० के ० शमाग से मोबाआल पर बात की और बताया की िि व्यभक्त भाग गया िो पैसा भदलिाता, ऄब िम लोग क्या करें आस समय िापस अने के भलए कोइ ट्रैन निीं िै, Customs Appeal Nos.70646-70647 of 2019 8 तो िि बोले की ठीक िै सबु ि िी सोना लेकर अ िाना भफर सनु ील ने ईससे किा भक ईन दोनों का घर यिाूँ से निदीक िै घर चलते िै, ...."
In para 11, adjudicating authority has recorded the facts stated by the Appellant 1 in his statement on 18.02.2015. The facts as stated by the appellant 1 are corroborating the statement of Appellant 2. Interestingly it is observed that no proceedings have been initiated against the two superiors namely Shri Alok Pandey and Shri S K Sharma in the custom proceedings, who as per both the appellants were fully aware of the entire scheme and proceedings as per the intelligence received. It was they who had also settled the amount to be paid by the alleged person from whom the gold was recovered, and appellants were merely acting as per the directions given by their superiors. I do not find anything on recorded whereby the involvement of the two superiors has even been investigated by the customs authorities though their statements were recorded 31.03.2015 and their statements made against the appellants have been accepted as gospel truth. Further it is hard to accept that the detail of the person from whom the gold was recovered were not available with the appellant or their superior officres, when he was apprehended and had been in custody of the personnel of SSB for nearly 4-5 hours. Why these details were not collected and attempts made to locate the said person not made by the custom authorities, is not understood.
4.5 From the above it is quite evident that the entire case against the appellant is based on the presumption that the gold recovered from the possession of Appellant 1, was smuggled gold. This presumption is based on following facts:
The appellants were directed by their superior officers in SSB, to conduct search of a passenger travelling in passenger train from Muzzafarpur to Gorakhpur on the basis of specific intelligence received to the effect that the person was carrying the smuggled gold, smuggled from Nepal.
Customs Appeal Nos.70646-70647 of 2019 9 The gold recovered had foreign markings on it. 4.6 The only ground for imposing the penalty on the appellants is that they had after recovery of gold from the said passenger not informed their superiors about the recovery of gold but were proceeding to their home/ village, when appellant No 1 was intercepted by the police and gold was recovered from him.
Interestingly adjudicating authority records that the it was not the Appellant 1 who has recovered the gold from the passenger but it was the Appellant 2.
4.7 In my view the burden of proof to prove the smuggled nature of the gold is on the revenue, before any proceedings for imposition of penalty on the appellant could have been undertaken. The presumption under Section 123, which provides as follows would also not help the cause of the revenue as admittedly in this case the goods were recovered by the police authorities and handed over subsequently to the Custom Authorities.
Section 123. Burden of proof in certain cases. -
(1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be -
(a) in a case where such seizure is made from the possession of any person, -
(i) on the person from whose possession the goods were seized; and
(ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person;
(b) in any other case, on the person, if any, who claims to be the owner of the goods so seized.
(2) This section shall apply to gold, and manufactures thereof, watches, and any other class of goods which the Central Government may by notification in the Official Gazette specify.
Customs Appeal Nos.70646-70647 of 2019 10 4.8 CESTAT has constantly held the view that in case were the foreign origin goods were seized by the police or other authorities than the presumption under section 123 is not available to the Custom Authorities. It would be for the custom authorities to prove the smuggle nature of the goods.
Naveed Ahmed Khan [2005 (182) ELT 494 (T-Bang)] Tulsi Das Agarwal [2003 (158) ELT 725 (T-Del)] Jitendra Pawar [2003 (156) ELT 622 (T-Del)] Ram Lubhaya [2002 (147) ELT 807 (T-Del)] Nirmala Mitra [2001 (138) ELT 1037 (T-Del)] 4.9 In the present case even if I have to go by the version of the department, the gold was recovered by the appellant 2, from a person travelling in passenger train from Muzaffarpur to Gorakhpur on the basis of some intelligence received by the SSB Narkatiyaganj. However what the intelligence was is not made available on the record. Further no evidence such a "panchnama" drawn for conducting the search of passenger travelling on the train and recovery of gold from him is part of record. Is it the manner in which the Police/ SSB functions wherein the person is searched on the train without preparation of the document for search. Further, did the constables of SSB had any jurisdiction to search a person within India on the basis of such an intelligence. Interestingly no proceedings have been initiated against the senior officers of the two appellants, who admit that they were aware of the intelligence and had directed the two constables to proceed in accordance with the intelligence. In absence of the intelligence I am unable to comprehend how these two constables identified the person on board of the train from amongst the 100 of passengers travelling in the train. Story after the recovery of the gold that the person ran away leaving the gold with these two constables cannot be accepted. Further in absence of any investigations in respect of the person from whom the gold was recovered, would not support the case of the department for imposing penalty under Customs Appeal Nos.70646-70647 of 2019 11 the Customs Act, 1962. It is also not the case, that gold is prohibited or restricted for import, it is free importable subject to the payment of prescribed Custom Duty. Further in case of Mohamad Ali Jinah, Chenai Bench has vide order dated 20.04.2023 [2023 (04) CESTAT CK 0038] held as follows:
27. We therefore proceed to examine the merits of the case. The allegation in the Show Cause Notice is that the gold seized from the respondent is gold smuggled into India without declaring it to Customs for avoiding payment of customs duties. The first issue that requires to be analyzed is whether the gold is of foreign origin. Admittedly, the gold does not have any foreign markings. It is the case of department that the gold assayer Sh. G.K. Shankar has issued certificate that the purity of the gold is 24 karat and of 999.9%. It is contended by department that only foreign gold would have such high purity. It is seen mentioned in the mahazar dated 23.1.2017 that the gold was assayed by the assayer on the same day. However, the said document is not made part of relied upon documents for the purpose of issuing Show Cause Notice. The learned counsel for respondent has submitted that the respondent was not served with copy of this document. The said contention was raised before the Commissioner (Appeals) also. On the date of hearing of this appeal by us, the learned AR has produced a copy of this document purported to be issued by assayer. We do not understand what prevented the department from placing this document as part of relied upon documents. Usually, only copes of the Relied Upon Documents are given to the noticee. It can therefore be inferred that the appellant was not given copy of this document. Although it is seen mentioned in the mahazar that the assayer certified the purity of gold on the same day of the incident (23.1.2017), the date mentioned in the certificate produced by the learned AR is 24.1.2017. Further, it says 24 karat gold and does not say 999.9%. This document is produced only now, at the second appeal stage. This document which is not made part of RUD and of which a copy has not been served Customs Appeal Nos.70646-70647 of 2019 12 to the respondent, when produced at the fag end of proceedings cannot be viewed without suspicion.
28. The gold was seized from the respondent at a public place which is a bus stand. At the time of interception, the respondent did not produce any valid documents as to how he has procured the gold. Though in the Show Cause Notice it is alleged that the respondent deposed that the gold was handed over to him by Murugan who said that it was smuggled from Sri Lanka and asked the respondent to handover to Shri Batcha @ Pitchai, the department has not been able to establish any of this. The telephone details of any call made by the respondent to these persons is not verified. In fact, the investigation agency has not been able to find out as to the existence of anyone named Murugan or Batcha. If the case of the department is to be accepted, the mobile phone of the respondent which was available to the investigation agency would be the first evidence by which the call details of the respondent can be verified as to whether he has made any calls to Murugan or Batcha. The event chain starts with a loose link.
29. The purity of the gold as certified by the assayer is the main reason for the department to allege that the gold is of foreign origin and is smuggled into India. Apart from challenging the certificate issued by assayer, the learned counsel has also challenged the method adopted for ascertaining the purity of the gold. It is not stated in the certificate as to what is the method adopted by the assayer to ascertain the purity. The learned counsel submitted that the touchstone method is not an acceptable method to prove the purity of the gold. The Customs officers ought to have obtained a report from a competent agency like the Government Mint. The decision in the case of Customs Vs. Dina Aruna Gupta reported in 2011 (274) ELT 323 (Del.) is relied by the respondent to assail the certificate of assayer. The relevant para reads as under:-
―31. The prosecution has examined PW-3 Shri Ramesh Chand Aggarwal, the goldsmith and the valuer who had tested the gold Customs Appeal Nos.70646-70647 of 2019 13 bars allegedly recovered from the possession of the accused. Whether PW-3 Shri Ramesh Chand Aggarwal was possessed of any qualification in the matter of testing gold was liable to be proved by the prosecution. The certificate issued by the PW-3 Shri Ramesh Chand Aggarwal i.e. Ex.PW-1/F does not disclose the method on the basis of which he had tested the gold and had reached to the conclusion that it was gold of 24^ purity.
32. Normally, the test applied for testing gold is furnace test but the same was not applied or resorted to in the present case.
There is no evidence on record that PW-3 Sh. Ramesh Chand Aggarwal was possessing any proficiency in the matter of testing gold. The certificate/report Ex.PW-1/F does not contain any data. Whereas the certificate must contain actual data and not mere opinion. Further, the gold of foreign origin has to be proved by the authentic manner. Law is well settled that mere marking cannot be taken as a proof of the gold for origin of the gold as markings and labels. In such a situation, the statement of the accused under Section 108 of the said Act has no consequences.‖ (Emphasis supplied)
30. The Hon'ble High Court of Karnataka in the case of Central Excise Department, Bangalore Vs. P. Somasundaram reported in 1979 SCC Online Kar. 187 observed as under:-
―9. One more aspect that is clear form the evidence of PW2 is that he has simply sworn that on testing M.Os 1 to 50, he came to the conclusion that each one of the biscuits was of 24 carret purity and was of foreign origin because of the markings and fineness. He has nowhere stated that was the test he applied and what were the conversations, namely, the date on which he based his conclusion amid the opinion. Sri Hakim argued that the defence has not cross-examined PW 2 as to what test he had applied and, therefore, there is no lacuna in the evidence of PW2. It is laid down in Madnukar's case that when there is no data on which the opinion is furnished by the so called expert, the evidence of such a witness is neither legal nor sufficient. We Customs Appeal Nos.70646-70647 of 2019 14 respectfully agree with this view. It was for the prosecution to bring out such data in the evidence of PW 2 when it has failed to bring out the date on which PW 2 came to the conclusion and furnished opinion that each of the biscuits was of 24 carrat purity and was of foreign origin because of the markings and fineness, the evidence of PW2 would not be legal, hence, becomes inadmissible. The prosecution has not produced any other evidence in proof of the fact that each one of the biscuits in question is gold and of particular purity and fineness. So, it has to fail.‖ (Emphasis supplied)
31. We have to say that in the case on hand, the certificate does not mention 999.9% as contended by department. It merely says 24 carat. It does not mention the method adopted to test the purity. Further, the certificate is not made part of RUD. The copy of certificate is not given to the respondent. Again, the request to cross-examine the assayer was denied. It is produced belatedly and there is no petition filed by learned AR stating reasons to accept the document at the appellate stage. On the totality of these facts, we have to hold that the certificate of the assayer produced by the learned AR cannot be accepted in evidence.
32. Apart from the certificate, the department relies on the statements given by the respondent on 23/24.1.2017. These statements have been retracted later by the respondent. In such circumstances, the department has to place reliable evidence to prove that the gold is smuggled from Sri Lanka. There is no evidence to prove that the gold is smuggled from Sri Lanka or any connection of the gold with Murugan or Batcha.
33. The department has mechanically applied section 123 of the Customs Act, 1962, which reads as under:-
―123. Burden of proof in certain cases.--
(1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled Customs Appeal Nos.70646-70647 of 2019 15 goods, the burden of proving that they are not smuggled goods shall be--
(a) in a case where such seizure is made from the possession of any person,--
(i) on the person from whose possession the goods were seized;
and
(ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person;
(b) in any other case, on the person, if any, who claims to be the owner of the goods so seized.] (2) This section shall apply to gold 2[and manufactures thereof] watches, and any other class of goods which the Central Government may by notification in the Official Gazette, specify.‖
34. In the absence of foreign markings, there should be cogent evidence to establish that the gold is of foreign origin. The contention of the learned AR that if gold jewellery when converted into bullion will not have 999.9% purity is without any substance. The statement of respondent which has been retracted cannot be the basis for holding that the gold is smuggled unless corroborated by other evidences.
35. In the case of Shri Sarvendra Kumar Mishra (supra), the facts are almost similar wherein the only evidence relied by the department was the statement of Shri Kishan Kumar Dhuria. The gold in that case did not have any foreign markings and it was held by the Tribunal that the onus would be on the department to prove the smuggled nature of the goods. The Tribunal observed as under:-
―15. Further, the only evidence relied upon by the Revenue is the statement of Shri Kishan Kumar Dhuria, wherein he stated that the gold may be of foreign origin, as according to his knowledge gold is smuggled through Bangladesh into India, which he received at Kolkata. We find that other then the statement of Shri Kishan Kumar Dhuria, no evidence is brought Customs Appeal Nos.70646-70647 of 2019 16 forth by Revenue to conclude that the impugned gold has been smuggled. We have perused the statement of Shri Dhuria and find that the information about the gold being smuggle from Bangladesh is very general in nature. We find that nowhere Shri Dhuria has confessed that the impugned Gold is smuggled from Bangladesh. It is not open for the department to draw conclusions from a general statement to particulars about the impugned goods. As admittedly, the gold having no foreign markings, the onus would be on department to prove the smuggled nature of the same. The onus was not discharged. Moreover, the provisions of Section 138B of the Customs Act have not been complied with and therefore, the sanctity of the statement recorded under section 108 has been lost and consequently, it cannot be conclusively relied upon.
16. The expert value has not subjected the gold to any analysis as to find out the purity of the Gold, which is also one of the determining factors. It is not clear as to how he has reported the purity of the gold without testing. The original authority comes to the conclusion that the impugned gold is of foreign origin by alluding to a website which said that purity can be 995 onwards.
Valuer is expected to arrive at the purity and value of the Gold in a scientifically established manner. If his services were required only to value the Gold, the same can be arrived on the basis of day-to-day Bullion rates announced by various exchanges. In addition to the above, fact remains that the Gold did not have any foreign markings; it has not been established that the same has been smuggled. The circumstances would certainly create reasons to believe that the impugned gold could be a smuggled one necessitating further probe. It does not constitute reasonable belief to seize the goods under Section 123 of the Customs Act, 1962. We find Tribunal in the case of Ram Nath Sah 2007 (219) ELT 546 (Tri - Kol) held that:-
I find that the seizure report does not indicate any foreign marking on the gold. The purity is also not of 999 generally found with the foreign origin gold. The seizure report also does Customs Appeal Nos.70646-70647 of 2019 17 not indicate the individual weight of the gold pieces. As such, this is a case where the benefit of doubt requires to be extended to the appellants as there is no conclusive proof that the gold is of foreign origin and smuggled.‖ (Emphasis supplied)
36. The respondent has put forward the contention that the seized gold belongs to him and that he had procured it using his earning and the gold jewellery of other members of the family. His family members such as father, mother, wife and daughter have written letters to the department stating that the gold was procured by their jewellery and earnings. The department has not been able to adduce any evidence to disprove these contentions. The respondent contends that the gold was melted into crude bars by a goldsmith named Shri A. Kannan. Department has recorded statement of one G. Kannan. It is seen that the respondent pointed out to the department that they have inquired with the wrong person (G. Kannan) and the goldsmith to whom the respondent had entrusted the work of melting was a different person (A. Kannan). However, we are not able to see any further inquiry made in this regard even though the respondent informed this by writing much before issuance of Show Cause Notice.
37. The learned AR has adverted to various decisions Surjeet Singh Chabra Vs. Union of India - 1997 (89) ELT 646 (SC), Kanungo & Co. Vs. Collector of Customs, Calcutta - 1983 (13) ELT 1486 (SC), Union of India Vs. GTC Industries - 2003 (153) ELT 244 (SC) and Sanjay Shah Vs. Commissioner - 2011 (268) ELT A109 (SC) to argue that not allowing cross-examination will not be violation of principles of natural justice. These cases are distinguishable on facts. When the evidence relied by the department to prove that the gold is of foreign origin is the certificate issued by assayer, the rejection of request to cross- examine him without giving cogent reasons vitiates the proceedings.
Customs Appeal Nos.70646-70647 of 2019 18
38. The evidence put forward by the department to allege that the gold is smuggled from Sri Lanka is too flimsy to be accepted. The Commissioner (Appeals) in para 34 has held as under:-
―34. In view of the above findings, it is held that the essential things for confiscation namely proof of the gold having been smuggled into India was not proved. The investigation has assumed that the impugned gold was smuggled from Sri Lanka and no corroborative evidence was produced by the DRI. More so, it was certified by the Court that the gold bars do not have foreign markings. AA has proceeded on wrong premises that the impugned crude Gold bars are of foreign origin. There was no positive evidence except the statement of the appellant. The retracted statement has not been corroborated with findings/evidence/statements of others i.e. the person supposed to have handed over the same to the appellant for transporting and the person who was supposed to receive. The burden of proof has not been discharged by the department. It has been proved that there was a violation of principles of natural justice by not allowing cross examination. Respectfully following the ratio of the Hon'ble Supreme Court in M/s.Oudh Sugar Mills Vs. UOI, I am constrained to set aside the order of the adjudicating authority confiscating the impugned gold and imposing penalty on the appellant. It is ordered to release the two crude gold bars weighing 3.097 kg to the appellant Mohammed Ali Jinnah.‖
39. After appreciating the facts and evidence discussed above, we are of the opinion that the view arrived by the Commissioner (Appeals) is legal and proper and does not require any interference. The issue on merits is found against the appellant / Revenue and in favour of the respondent."
4.10 The only reason for holding against the constables of SSB (Appellants) is that they had not informed their superiors about the recovery of Foreign Marked Gold as per the intelligence. Not informing the superiors about recovery of this Gold can be an offence under some other act, but not an offence under the Customs Act, 1962. For the offences, the Appellants have been Customs Appeal Nos.70646-70647 of 2019 19 tried and punishments given to Appellants, I take note of the order dated 02.12.2020 of Hon'ble Delhi High Court has in the case of Appellant 1 (Shri Sunil Kumar Yadav), in WP (C) No 6226/2020. In the said decision Hon'ble High Court has observed as follows:
"12. There can be no quarrel with the proposition that sentence must be proportionate to the role of an accused. The courts have also recognised the Doctrine of Equality as applying to all who are placed equally, even among those who are found guilty of having committed offences. In the case decided by the Supreme Court annexed to the e-paper book as Annexure P-11, Rajendra Yadav v. State of M.P. and others, (2013) 3 SCC 73, the comparison was between two convicted persons. Here the facts are different. The COI and GFC have been concluded qua the petitioner, whereas proceedings are pending against the SAOs. There can be no parity claimed for and at various stages of disciplinary proceedings. As per the statement made by learned counsel for the respondents, it is not as if no action has been initiated against Sh.S.K.Sharma and Sh.Alok Pandey. What happens to them on conclusion of inquiries against them, cannot dictate what punishment would be appropriate for the role of the petitioner in the incident. The Doctrine of Equality has no application to the facts of this case and the plea is rejected. It may also be stated that the summation by the Judge Attorney is only for the purposes of the GFC and cannot substitute for the findings recorded after due trial and inquiry. The reliance of the learned counsel on the summation to seek exoneration of the petitioner is misplaced.
14. What is worthy of note in the case at hand are the several significant admissions made by the petitioner. The petitioner claims that it was he who had received the information of smuggling of gold by a passenger travelling by Saptakranti Express. Admittedly, he had gone along with Constable Satyendra Kumar for the recovery of the gold. Admittedly, he apprehended the smuggler, took his search and recovered the 3 pieces of gold from the possession of the smuggler.
Customs Appeal Nos.70646-70647 of 2019 20 Subsequently, he was the one who was found in possession of the very same pieces of gold by the local police at Tuthibari chowk. The COI and the GFC had found that the petitioner was on the way to his home and was ahead of Tuthibari when he was apprehended. That would also indicate that the petitioner instead of following the instructions of his superiors (as per his case) to deposit the gold at Tuthibari, had gone further ahead of Tuthibari with the smuggled gold towards his own village, which casts doubt on the integrity of the petitioner himself. All these facts were fully and conclusively established by the witnesses during the COI and GFC."
From the above it is quite evident that, the Appellant was held guilty of not following the instructions of the superior officers for depositing the Gold at Tuthibari, and has gone with the smuggled gold towards his own village. For the offence committed Hon'ble High Court has upheld the punishment given to the Appellant 1 stating as follows:
"13. The next question is whether the punishment meted out to the petitioner is per se disproportionate. The Supreme Court had dealt with the question of proportionality of punishment in Om Kumar v. Union of India (2001) 2 SCC 386, Union of India v. G. Ganayutham (1997) 7 SCC 463 and Union of India v. Dwarka Prasad Tiwari (2006) 10 SCC 388. Quoting with approval it's previous decision in Dwarka Prasad Tiwari (supra), the Supreme Court reiterated that the Court would interfere with the punishment imposed pursuant to disciplinary proceedings only if it was so disproportionate that it shocked the conscience of the court. The observations are reproduced below for ready reference:
―25. In Dwarka Prasad Tiwari, it has been held that unless the punishment imposed by the disciplinary authority or the appellate authority shocks the conscience of the court/tribunal, there is no scope for interference. When a member of the disciplined force deviates to such an extent from the discipline and behaves in an untoward manner which is not conceived of, it is difficult to hold that the Customs Appeal Nos.70646-70647 of 2019 21 punishment of dismissal as has been imposed is disproportionate and shocking to the judicial conscience."
15. In the background of these facts, the sentence of one year's rigorous imprisonment and dismissal from service as imposed on the petitioner do not seem disproportionate at all. Neither does it shock the conscience of the court as being unjust. The petitioner was a member of a disciplined Force and responsible for the security of the country, including economic security. He did not consider it inappropriate to keep smuggled gold in his possession, about the seizure of which no record was also prepared. Absolute honesty and integrity is expected of all government employees and no slip can ever be brooked. Such employees W.P.(C) 6226/2020 Page 10 of 10 wanting in integrity cannot but be dismissed as their retention in service would send wrong signals and would be counter-productive." 4.11 Further taking note of the fact that the appellants have been meted with requisite penalties for their misconduct under the applicable acts I do not find any merits in the penalties imposed on them under the Customs Act, 1962. 5.1 Appeals are allowed.
(Operative part of the order pronounced in open court) Sd/-
(SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp