Custom, Excise & Service Tax Tribunal
) Sri Nand Kishore Modi vs Commr. Of Customs (Prev.), W.B on 21 August, 2015
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EAST REGIONAL BENCH : KOLKATA
Customs Appeal Nos. C/07/2007 & C/10/2007
(Arising out of the Order-in-Original No.12/CUS/CC(P)/WB/2006 dated-07/11/2006 passed by the Commissioner of Customs (Prev.), West Bengal, Kolkata)
For approval and signature of:
SHRI H.K. THAKUR, HONBLE TECHNICAL MEMBER
======================================================
1. Whether Press Reporters may be allowed to see :
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 :
of the Order?
4. Whether Order is to be circulated to the Departmental :
Authorities ?
1) Sri Nand Kishore Modi
2) Sri Rajendra Kumar Damani
APPELLANT(S)
VERSUS
Commr. of Customs (Prev.), W.B.
RESPONDENT(S)
APPEARANCE
Sri K.P. Dey, Advocate for Nand Kishore Modi
Sri B.N. Chattopadhyay, Consultant for R.K. Damani
FOR APPELLANT(S)
Sri S. P. Pal, Appraiser (A.R)
FOR THE RESPONDENT(S)
CORAM:
SHRI H.K. THAKUR, HONBLE TECHNICAL MEMBER
DATE OF HEARING : 21/08/2015
ORDER NO : FO/A/75482-75483/2015
Per SHRI H.K. THAKUR
These appeals have been filed by the appellants against Order-in-Original No. 12/CUS/CC (P)/WB/2006 dated-7/11/2006 passed by C.C. (P), Kolkata. Under this Order-in-Original dated-7/11/2006 twenty two (22) pcs. of gold biscuits weighing 2566.29 gms. (valued at Rs.11,34,000/-) have been confiscated under Section 111 (b) & (d) of the Customs Act, 1962 without giving any option of redemption to the appellants.Penalties of Rs.2 Lakh & Rs.1 Lakh have also been imposed upon the appellants (Shri Rajendra Damani and Shri Nand Kishore Modi respectively under Section 112 of the Customs Act, 1962.
2. Shri K.P. Dey (Advocate) appeared for the appellant Nand Kishore Modi & Shri B.N. Chattopadhyay (Consultant) appeared for Shri Rajendra Kumar Damani. Shri K.P. Dey (Advocate) argued that 22 pcs. of gold biscuits, having inscription of PMPO SUISSE 10 TOLAS -999.0 on two pcs. & CREDIT SUISS 999.0 TOLAS on the rest, were seized by the officers of Customs during the search of the business premises of Rajendra Kumar Damani on 14/2/2001 during which brother of Shri R.K. Damani, Shri Bimal Kumar Damani was also present alongwith another person Shri Mahendra Bahadur. Ld. Advocate emphasized that as per the facts recorded in the opening para of Order-in-Original dated- 7/11/2006, the said 22 gold biscuits were seized from waste paper box into which Shri Mahendra Bahadur has hastly dropped the packet containing gold bars, when the officers of Customs reached the premises. That as per panchnama dt. 14/02/2001, the said gold biscuits were kept in the pocket of the accused Shri Mahendra Bahadur, son of Shri Ram Bahadur who has been shown as the owner and both the Damani brothers have been shown as witnesses in the panchnama. That Shri Mahendra Bahadur has confessed to have collected the said gold biscuits from a person at Sealdah as per the instructions of his employer Shri Rajendra Kumar Damani. Shri R.K. Damani also confirmed in his statement dt. 14/02/2001 that he has sent his two employees Shri Mahendra Bahadur & Bhola Rai to Sealdah station to receive 22 pcs. of gold biscuits from one person sent by Shri Jagdish Agarwal of Gangarampur. That Shri Mahendra Bahadur was arrested on 15/02/2001 but Shri R.K. Damani was not arrested even when Shri Mahendra Bahadur stated him to be his employer in the very first statement. That on 19/2/2001, Shri R.K. Damani wrote a letter to the CC (P) enclosing two bills and one certificate issued by M/s. Anand Silver Pvt. Ltd. claiming the said gold biscuits have been procured by him legally from M/s. Anand Sales Pvt. Ltd. of 10, Nalini Seth Road, Kolkata-7. Shri R.K. Damani also alleged that his statement recorded by Customs Officers on 14/02/2001 was under pressure & coercion. That statement of Shri Nand Kishore Modi of M/s. Anand Sales Pvt. Ltd. was also recorded on 19/3/2001 wherein he confirmed to have supplied 22 foreign marked gold biscuits under Bill No. G/0618 /2000-01 dated-9/2/2001 & G/0615/2000-2001 dated-9/2/2001. Shri N.K. Modi also stated that the said gold bars were purchased by him from ABN Amro bank, Russel Street Branch , Kolkata under delivery Challan No. CAL-2001/C.L.G./124 dated-6/2/2001,CAL/2001/CLD/129 dated-7/2/2001 & CAL/2001/CLD/135 dated-9/2/2001. It was strongly argued by the advocates appearing on behalf of the appellants that in view of the case law S.K. Chains Vs. C.C. (P), Mumbai [2000 (09) LCX 02027] that hundreds of tons of gold is being imported through baggage or special import licenses and it cannot be said that a foreign marked gold acquired in India is of smuggled nature. It was thus appellants case that onus of gold being of smuggled nature has not been discharged by the department under Section 123 of the Customs Act, 1962. It was also argued by the Ld. Advocate that following case laws have also decided the same issue in favour of other appellants:
(i) Samir Kr. Roy Vs. CCP (Calcutta) reported in 2001 (07) LCX 0153
(ii) Giridhari Dubey Vs. CCP, Kolkata 2001 (11) LCX 0215)
(iii) Kapildeo Prasad Vs. C.C. (P), Patna- 2002 (02) LCX 0099
(iv) Mohd. Aslam Vs. C.C., New Delhi- 1999 (04) LCX 0198)
3. Shri S.P. Pal (Appraiser), A.R. appearing on behalf of the Revenue argued that statement of co-accused Shri Mahendra Bahadur was not retracted even during his subsequent recording of statements in the jail. That retraction made by Shri R.K. Damani is only an after thought nd the purchase bills later produced cannot be accepted as valid documents. Learned A.R. strongly defended the order passed by the Adjudicating authority.
4. Heard both sides and perused the case records. The issue involved in these proceedings is whether the foreign marked gold seized by the officers of Customs on 14/2/2001 was smuggled gold and whether the purchase bills for gold biscuits produced by the appellant Shri Rajendra Kumar Damani were covering the seized gold biscuits . It is the case of the Revenue that on the date of seizure neither Shri Mahendra Bahadur nor Shri R.K. Damani could produce any documents regarding licit acquisition of seized gold biscuits. By a letter dated 19/2/2001, Shri R.K. Damani produced copies of the purchase of seized gold biscuits from M/s. Anand Sales Pvt. Ltd. and also stated that his statements were recorded under duress. In the very first statement of Shri Mahendra Bahadur as reflected in the brief facts of Order-in-Original dated-7/11/2006, it was stated that he mentioned that he had gone to Sealdah Station as per the instruction of his employer Shri Rajendra Kumar Damani. Only Shri Mahendra Bahadur was arrested on 15/2/2001 and not Shri Rajendra Kumar Damani by the officers of Customs. No investigation conducted and evidence has been brought on record to indicate whether any efforts were made to trace out Shri Jagadish Agarwal of Gangarampur from whom Shri R.K. Damani has stated to have purchased smuggled gold biscuits on past several occasions also. Conflicting facts regarding place of recovery of gold biscuits, whether from the pocket of Shri Mahendra Bahadur or from the waste paper box, are coming out from the records of the case. It is also not clear as to why Shri Mahendra Bahadur was shown as the owner of the seized goods if they were recovered from the waste paper box of the premises belonging to Shri Rajendra Kumar Damani and when Shri Mahendra Bahadur specifically mentioned that had had gone to the railway station as per the instruction of the employer Shri R.K. Damani. In view of these discrepancies the panchnama recorded on 14.92/2001 and the first day recorded statements do not project the correct nature of facts. It is not the case of the Revenue that seized gold biscuits were seized in a Customs area or was coming from the side of an international border with India. In the case of Samir Kumar Roy Vs. CC(P), Calcutta [2001 (07) LCX 153 appeal of the appellant under similar factw was allowed . Following paras of this case law are relevant and are reproduced below:
3.1 On 16/101995 at about 15.30 hrs., on interception and search of one Maruti Car, the Customs Officers found 16 pieces of gold biscuits and 4 pieces of gold strips from the underneath of front seat of the maruti car. Shri Samir Kr. Ray claimed the ownership of the gold in question. On his disclosure one more gold biscuits was recovered from under the mattress of the bed in his bed-room alongwith Indian currency of Rs.2,53,525/-. During the course of search of the residential premises of Shri Samir Kumar Ray one Shri Subhas Chandra Saha entered his house. He also was interrogated and 6 pcs. of gold biscuits kept in his rectum was ejected. Shri Saha disclosed that he was go give the said 6 pcs. of gold biscuits to Shri Samir Kumar Ray. As the appellant could not produce any documentary evidence, showing legal acquisition of the gold in question, the same alongwith Maruti Car were seized. The Indian currency was also seized by the officers on a reasonable belief that the same was the sale-proceeds of the smuggled goods. However, the said currency stands released by the impugned order of the Commissioner. 3.2 During interrogation Shri Ray gave self-incriminating statement admitting the gold in question was smuggled goods. Shri Samir Kumar Ray is proprietary of M/s. Bijay Jewellers and carries the business of manufacturing gold ornaments. The statement of the Accountant of Binay Jewellers was also recorded. Subsequently, at the time of hearing of the bail application before the Honble High Court of Calcutta Shri Samir Ray claimed that he had purchased 21 pcs. of imported gold biscuits from one Shri Mansukhlal T. Bavishi of Mumbai and produced one Bill No. G/118, dated 12/10/1995. Enquiries were conducted by the Customs and statement of Shri Vinay Kumar C. Zaveri, In-charge of M/s. Mansukhlal T. Bavishi was recorded on various dates. He admitted having sold 21 pcs. of gold biscuits of foreign markings to Shri Samir Kumar Ray of M/s. Bijay Jewellers, Calcutta under Bill No. G/118, dated-12/101995. He further revealed that these 21 pcs. of gold biscuits were purchased from one NRI person named Ismail who imported the same under baggage receipt No. 58310, dated- 8/10/1995, the said deal was made through M/s. Pankaj Jewellers of Mumbai on 11/10/1995 under Bill No. 205 and recorded in the stock register at page No.7. They had made full payments to M/s. Pankaj Jewellers by issue of cheques.
8. We have given our careful consideration to the argument advanced on behalf of the appellants and on behalf of the Revenue. As regards the confiscation of 21 pcs. of gold biscuits recovered from Shri Samir Kumar Ray it is seen that the said appellant has taken a definite stand before the adjudicating authority that the gold in question was purchased by him through Mansukhlal T. Bavishi and Shri Binay C. Zaveri the representative of the said M/s. Mansukhlal T. Bavishi have clearly deposed in his statement before the investigating officer that the gold in question was sold by them to Shri Samir Kumar Ray, Calcutta at Mumbai (sic) and Shri Ray has signed the purchase bill at Mumbai and took the delivery of the same personally. They have also disclosed their source of acquisition of gold from M/s. Pankaj Jewellers who acted as a broker. They also revealed that gold in question was legally brought by Md. Ismail and was cleared on payment. The said defence of the appellant has not been accepted by the adjudicating authority by observing that there are certain missing links in the stand of the appellant inasmuch as M/s. Pankaj Jewellers could not be identified nor the person who had claimed to have imported the said gold in the baggage receipt. On the other hand we find that the appellant as also Shri Mansukhlal T. Bavishi of Mumbai have placed on record sufficient evidence showing sale of the gold biscuits in question. The residential address of the proprietor of M/s. Pankaj Jewellers was disclosed by Shri Mansukhlal T. Bavishi in their reply to the show cause notice. There is nothing in the impugned order to reflect upon efforts made by the Revenue to contact the proprietor of M/s. Pankaj Jewellers or to verify the bank accounts produced by Shri Mansukhlal T. Bavishi showing the payments of consideration of gold biscuits to M/s. Pankaj. It is also on record that the appellants had subsequently paid the entire consideration to M/s. Mansukhlal T. Bavishi for 21 gold biscuits in question. The observation of the adjudicating authority that the gold biscuits was not recorded in the appellants record thus reflecting upon smuggled character of the same are not found favourable with us inasmuch as firstly the appellant was under no legal obligation to maintain any records and secondly, the appellants have explained that Shri Samir Kumar Ray landed in Calcutta on 14/10/1995 which was Saturday and 15/10/1995 was Sunday and thereafter the gold was seized in the morning hour on 16/10/1995, thus giving no opportunity to the appellant to record the same in his business records. We also take note that Revenue has nowhere alleged that the baggage receipt produced by the appellant is not genuine. The fact of non-traceability of Md. Ismail, who imported the gold by itself cannot ipso facto lead to conclusion that the gold was smuggled especially when the appellants have been able to establish the sale of the same by M/s. Pankaj to Shri Mansukhlal T. Bavishi and further sale to the appellant Shri Samir Kumar Ray. In this connection we take into consideration the Tribunals decision in the case of S.K. Chains reported in 2000 (09)LCX0202 Eq 2001 (127) ELT 0415 (T) observing as under:
7. Thus, today there exists a very peculiar situation. On the one hand the Customs Act considers it necessary to ask a person to establish the legality of the origin of the gold seized from him while on the other hand in pursuance of the relaxations made in the Import Policy and the Baggage Rules framed under that very Act, there is a flood of foreign marked gold in the town. Such gold changes hands several times on importation. Since the repeal of the Gold (Control) Act in 1968, there is no legal requirement for the buyers and sellers of gold to maintain any registers nor is there any requirement to issue invoices under any Central Act.
9. Accordingly, we observe that as a result of liberalization of the Policy as regards the import of foreign marked gold, such gold is available in the Indian market in ample. In the baggage receipt issued by the Customs authorities no identification marks are given so as to connect a particular piece of gold with the factum of payment of duty. The fact of Mansukhlal T. Bavishi having admitted to have sold the gold in question to the appellant by itself is sufficient to show the legal acquisition of the gold by Shri Ray. As such we are of the view that the onus placed upon the appellant under provisions of Section 123 is discharged to the requisite extent. Accordingly, we set aside the confiscation of 21 pcs. of gold biscuits belonging to Shri Samir Kumar Ray and confiscation of his maruti car and imposition of personal penalty upon him. For the same reason, the imposition of personal penalty on Shri Mansukhlal T. Bavishi and Shri Vinay Kumar C. Zaveri is also set aside. 4.1 In view of the above observations and settled proposition of law every piece of gold possessed by a person in India cannot be considered to be of smuggled nature and that the possessor of such gold has to discharge the onus under Section 123 of the Customs Act, 1962, However, it may be a requirement from a person in a Customs area who imported gold as baggage. In the instant case the foreign marked gold was not seized from a customs area or a person coming from an international border. Accordingly, it is held that in the present appeals, Revenue has failed to establish that seized gold was of smuggled nature.
5. Appellant Shri Rajendra Kumar Damani has brought on record two bills suggesting the purchase of the seized gold biscuits from M/s. Anand Sales Pvt. Ltd. On investigation by the Customs officer Shri Nand Kishore Modi of M/s. Anand Sales Pvt. Ltd. has confirmed the sale of 22 pcs. of gold biscuits to Shri R.K. Damani and also that these gold biscuits were procured by him from ABN AMRO BANK, Russel Street Branch, Kolkata. It is true that no document of purchase of seized gold biscuits have been produced on the date of the panchnama or recording of of the first statement. But looking to the fact; that Shri R.K. Damani was not arrested when Shri Mahendra Bahadur did implicate Shri R.K. Damani as his employer; it has to be held that statements recorded on 14/02/2001 were not the correct representation of the facts. This is also fortified by the fact that recovery of gold biscuits was conflictingly shown to be from the pocket of Shri Mahendra Bahadur and as well as from the waste paper box. Under the existing factual matrix, appellant Shri R.K. Damani is able to discharge his burden of licit acquisition of gold biscuits by furnishing the purchase bills from the M/s. Anand Sales Pvt. Ltd. The confiscation of 22 pcs. of gold biscuits is required to be set aside and the same are required to be handed over to the rightful owner. As on merits, the case has been decided in favour of the appellants. There is no point in imposition of penalties. In view of the above observations and settled proposition of relied upon case laws appeals filed by the appellants are allowed with consequential relief, if any.
(Operative part of the order already pronounced in the Court) Sd/-
(H.K. THAKUR) TECHNICAL MEMBER k.b/-
Customs Appeal Nos. C/07/2007 & C/10/2007 2