Judgment:
1. The above captioned 3 appeals have been directed against the common order-in-appeal dated 7-10-2002 vide which the Commissioner of Customs (Appeals) had affirmed the order-in-original dated 18-4-2002 of the Additional Commissioner regarding confiscation of the gold biscuits and imposition of penalty, on the appellants.
2. On 27-5-2000, Police officers of Kotwali Police Station, Bilaspur, made seizure of the gold from the premises of M/s. Jai Saraswati Refinery Works and from the possession of its proprietor Shri Jitendra Pawar (appellant No. 1). The gold recovered was, 1 gold biscuit bearing marking UBS (10 tolas), 2 gold biscuits bearing marking 'COMMERZ BANK (10 tolas), 3 gold biscuits bearing marking 'CREDIT SUISEE' (10 tolas), 2 gold biscuits with marking UBS (10 tolas), 2 gold rod/wire weighing 164.750 gms and 86.150 gms. 1 cut piece of gold weighing 26.420 gms. 1 gold lump bearing marking JSR and Lotus flower weighing 33 grms and 5 pieces of gold lump weighing 23.850 grms, as detailed in the seizure memo which was also prepared by the Police. Later on, the Police authorities handed over all these gold to the Superintendent of Customs on 31-5-2000 who took into the possession under a proper panchnama on the reasonable belief that the same was smuggled gold. During the enquiry, the other two appellants were also interrogated and their statements were recorded. On completion of investigation, show cause notice was issued to all the three appellants proposing confiscation of the seized gold collectively weighing 1278.270 grms valued at Rs. 5,62,440/- and imposition of penalty on them. Appellant No. 1 claimed the seized gold and produced the documents about the legal acquisition of the same. The other two appellants denied their concern with the seized gold. The adjudicating authority ordered the confiscation of the gold and imposed penalty of Rs. 25,000/- each, on the appellants. The Commissioner (Appeals) had affirmed that order.
3. I have heard both sides. The perusal of the record shows that the initial seizure of the gold in question was made by Kotwali Police, Bilaspur on 25-7-2000 from the possession of appellant No. 1. It was only on 31-5-2000, the police intimated to the Assistant Commissioner of Central Excise, Bilaspur about the seizure of the gold with a request to take over the investigation under the Customs Act. The Superintendent of Customs thereafter got verified the purity of the seized gold from one Shisupal Soni, a dealer in gold and silver.
Therefore, the presumption regarding the smuggled nature of the seized gold under Section 123 of the Customs Act was not invokable, in view of the ratio of law laid down by the Apex Court in Gian Chand v. State of Punjab - 1983 (13) E.L.T. 1365 as well as in State of Maharashtra v.Prithiviraj Pokhrai Jain - 2000 (126) E.L.T. 180 (Bom.) wherein it has been observed that in a case of seizure of gold by the police, no presumption under Section 123 of the Customs Act regarding its smuggled nature can be drawn.
4. That being so, the initial burden was on the Department to prove that the gold seized from the possession of appellant No. 1 was smuggled one and mere foreign marking which was only on the gold biscuits and not on the other gold items detailed above, was not sufficient to raise an inferences that it was smuggled into India. In this context reference may be made to State of Maharashtra v.Prithviraj Pokhraj Jain (supra) as well as to Rajesh Kumar v.Commissioner of Customs - 2001 (134) E.L.T. 148. It remains undisputed that at that time gold could be freely imported and was available in the market for sale and purchase. There is no tangible evidence on the record to prove that the seized gold was smuggled into India by the appellant No. 1 from whose possession it was recovered. The statement of appellant No. 2, Shri Anil Soni before the police at the time of his arrest that he had been supplying the gold biscuits of foreign origin to appellant No. 1 after bringing the same from abroad could not be attached any legal credence as it was made before the police and the same was inadmissible evidence. Moreover, he himself retracted that statement immediately when the investigation was taken over by the Customs authorities after handing over of the case to them by the police. He denied his concern with the seized gold. Similarly, the earlier statement of appellant No. 1 before the police regarding the supply of gold to him by co-appellant No. 2 of foreign origin, being inadmissible evidence did not carry any legal value. He too even otherwise retracted that statement before the Customs authorities by disclosing the source from where he purchased the same and later on produced documents vide which he purchased. According to him, he purchased 7 gold biscuits from Anoop Jewellers and Kasturchand Mohanchand Baid. He produced bill dated 5-11-98 issued by Kasturchand Mohanchand Baid. His statement had even been corroborated by Kasturchand Mohanchand Baid who in his statement disclosed on 8-8-2000 that 7 biscuits of gold was sold to Jitendra Pawar, appellant No. 1 and after adjusting the purchase of some bullions from Jitendra Pawar, appellant No. 1, the balance payment was received by him. This evidence has been wrongly ignored by the authorities below. The bill dated 5-11-98 issued by the firm Kasturchand Mohanchand Baid had been brushed aside on the ground that it was produced after six days of seizure. But this could not be legally done, when the firm which issued the bill had accepted its correctness. Similarly, the bill issued by Anoop Jewellers regarding sale of the gold to appellant No. 1 on 19-4-2000 had also been wrongly not accepted by the authorities below. No statement of any partner of Anoop Jewellers was recorded and as such the correctness of the bill issued by that firm to appellant No. 1 could not be questioned or doubted.
5. The proof of legal acquisition of the seized gold furnished by the appellant No. 1 referred to above deserves to be accepted, especially when the gold was freely importable at that time and available in the market for sale and purchase and no evidence has been brought on record to prove that the seized gold was smuggled gold and that it was never sold by the firm named above to Jitendra Pawar, appellant No. 1.
6. Therefore, the findings of the authorities below regarding the smuggled nature of the gold being based on no tangible and acceptable evidence deserves to be set aside. The observations of the authorities below that Licence was required for importing gold and no proof of taking such a Licence was produced, have got in fact no bearing on the case. The appellant No. 1 never claimed to have imported the gold. He has only purchased it from the firms named above, through bills on payment and for such a purchase no Licence was required.
7. There is also no reliable evidence on the record to prove any concern with the seized of other two appellants. Appellant No. 2 has denied his concern with the seized gold. Appellant No. 3 is father of appellant No. 1 and he too has nothing to do with the seized gold as stated by him in his own statement.
8. In view of the discussion made above, the impugned order of the Commissioner (Appeals) cannot be sustained against any of the appellants and the same is set aside. The appeals of the appellants are accepted with consequential relief, if any, permissible under the law.