Vimlesh Kumar Neema, Dilip Kumar Vs. C.C. - Court Judgment

Excerpt:
1. these appeals are filed against the order-in-original 10.07.2002 vide which 50 gold bars were absolutely confiscated and penalties imposed on the appellants herein. since all these appeals arise out of the common impugned order they are disposed off by a common order.2. the relevant facts that arise for consideration are that customs officers received information from the surat railway police station that they have apprehended a passenger carrying 50 gold bars of foreign origin. customs authorities seized the said 50 gold bars under a panchanama and after recording statement of the passenger, further investigation was carried out by the officers. after recording statements of the all the appellants and other persons, a show cause notice was issued to the current appellants proposing the confiscation of the seized gold bars and for imposition of penalties. all the appellants resisted the show cause notice on the ground that the said gold bars were in their licit possession and they had documentary evidences to that effect. adjudicating authority did not accept the contentions of the appellants and came to conclusion that the seized gold bars of smuggled nature and hence absolutely confiscated the same and imposed penalties on the appellant under section 112 of the customs act, 1962. hence these appeals.3. the learned senior counsel appearing for all the appellants submits that the adjudicating authority has not considered the evidences filed by the appellants as regards the licit possession of the gold bars. it is his submission that the appellant had from the date of seizure claiming that the said gold bars were purchased by them from registered dealers. he takes us through all the documents and statements. it is his submissions that all these documents were produced by them before the adjudicating authority. it is also his submission that absolute confiscation of the gold bars was uncalled for and the consequent penalties are unwarranted.4. the learned sdr would submit that the appellant have not explained why these documents were not given with the person who was carrying the gold bars. it is his submission that the purported purchaser of these gold bars had denied that he had placed the order. it was also submitted that when there is contradictions in the statements it would indicate that the gold bars were not legally imported. he takes us through the statements to press home his point.5. considered the submissions made by both sides at length and perused records. it is the claim of the appellants that gold bars were purchased by them from m/s c. arvindkumar & co. vide bill no. 7419 dated 17.1.2002. it is on record and undisputed that m/s c. arvindkumar & co. had purchased these gold bars from m/s k.l. choksi, who had in turn purchased the same from m/s gitanjali exports corporation. m/s gitanjali exports corporation had purchased gold bars from m/s state bank of india, who had imported the same vide bill of entry no.238/2001 darted 15.1.2001. it is seen from records that the officers have recorded the statements of all the authorized person of m/s gitanjali exports corporation, k.l. choksi and c. arvindkumar & co., which would indicate that the gold bars were in their licit possession and corroborated the ultimate sale of the gold bars to current appellant. on the face of such a concrete evidence the learned adjudicating authority has absolutely confiscated the gold bars on the following findings: when all the above 3 parties have purchased the gold and made its payment on the same way, it is not understood as to why payment was not made to m/s choksi arvindkumar & co., by m/s honest bullion who were claiming that the goods were legally purchased from them. the chain sought to be proved as legal import was broken at this stage and it appeared that the goods were not purchased from m/s choksi arvindkumar & co., as no payment was made for the same. in the gold business where transaction were normally made on cash basis (not credit basis) the non payment for purchase of gold valued at rs. 26 lakhs so far itself shows that the bill produced from m/s choksi arvindkumar & co. was not authentic and is an afterthought to show that the seized goods were legally imported which does not appear to be correct.6. the conclusion reached by the adjudicating authority from the above reproduced portion is unsustainable in as much that the appellant's non payment of consideration to m/s c. arvindkumar & co would not render the legally imported gold bars as illegal imports. the commercial understanding between the parties inter-se cannot determine the legality or illegality of the gold bars. it is seen in this case that the revenue has not been able to discharge their burden that said gold bars were imported illegally while the appellant has been able to demonstrate that the said gold bars were in their licit possession. we have no hesitation in holding that the absolute confiscation of the seized gold bars is unsustainable, as all the documentary evidences produced indicate that the gold bars were legally imported. we set aside the confiscation of the said gold bars. since confiscation of the gold bars is set aside, the consequent penalties imposed on the appellants are also liable to be set aside.7. accordingly, the impugned order is set aside and appeals allowed, with consequential relief.

Judgment:
1. These appeals are filed against the order-in-original 10.07.2002 vide which 50 gold bars were absolutely confiscated and penalties imposed on the appellants herein. Since all these appeals arise out of the common impugned order they are disposed off by a common order.

2. The relevant facts that arise for consideration are that Customs officers received information from the Surat Railway police station that they have apprehended a passenger carrying 50 gold bars of foreign origin. Customs authorities seized the said 50 gold bars under a panchanama and after recording statement of the passenger, further investigation was carried out by the officers. After recording statements of the all the appellants and other persons, a show cause notice was issued to the current appellants proposing the confiscation of the seized gold bars and for imposition of penalties. All the appellants resisted the show cause notice on the ground that the said gold bars were in their licit possession and they had documentary evidences to that effect. Adjudicating authority did not accept the contentions of the appellants and came to conclusion that the seized gold bars of smuggled nature and hence absolutely confiscated the same and imposed penalties on the appellant under Section 112 of the Customs Act, 1962. Hence these appeals.

3. The learned senior counsel appearing for all the appellants submits that the adjudicating authority has not considered the evidences filed by the appellants as regards the licit possession of the gold bars. It is his submission that the appellant had from the date of seizure claiming that the said gold bars were purchased by them from registered dealers. He takes us through all the documents and statements. It is his submissions that all these documents were produced by them before the adjudicating authority. It is also his submission that absolute confiscation of the gold bars was uncalled for and the consequent penalties are unwarranted.

4. The learned SDR would submit that the appellant have not explained why these documents were not given with the person who was carrying the gold bars. It is his submission that the purported purchaser of these gold bars had denied that he had placed the order. It was also submitted that when there is contradictions in the statements it would indicate that the gold bars were not legally imported. He takes us through the statements to press home his point.

5. Considered the submissions made by both sides at length and perused records. It is the claim of the appellants that gold bars were purchased by them from M/s C. Arvindkumar & Co. vide bill No. 7419 dated 17.1.2002. It is on record and undisputed that M/s C. Arvindkumar & Co. had purchased these gold bars from M/s K.L. Choksi, who had in turn purchased the same from M/s Gitanjali Exports Corporation. M/s Gitanjali Exports Corporation had purchased Gold bars from M/s State Bank of India, who had imported the same vide Bill of Entry No.238/2001 darted 15.1.2001. It is seen from records that the officers have recorded the statements of all the authorized person of M/s Gitanjali Exports Corporation, K.L. Choksi and C. Arvindkumar & Co., which would indicate that the gold bars were in their licit possession and corroborated the ultimate sale of the gold bars to current appellant. On the face of such a concrete evidence the learned adjudicating authority has absolutely confiscated the gold bars on the following findings: When all the above 3 parties have purchased the gold and made its payment on the same way, it is not understood as to why payment was not made to M/s Choksi Arvindkumar & Co., by M/s Honest Bullion who were claiming that the goods were legally purchased from them. The chain sought to be proved as legal import was broken at this stage and it appeared that the goods were not purchased from M/s Choksi Arvindkumar & Co., as no payment was made for the same. In the gold business where transaction were normally made on cash basis (not credit basis) the non payment for purchase of gold valued at Rs. 26 lakhs so far itself shows that the bill produced from M/s Choksi Arvindkumar & Co. was not authentic and is an afterthought to show that the seized goods were legally imported which does not appear to be correct.

6. The conclusion reached by the adjudicating authority from the above reproduced portion is unsustainable in as much that the appellant's non payment of consideration to M/s C. Arvindkumar & Co would not render the legally imported gold bars as illegal imports. The commercial understanding between the parties inter-se cannot determine the legality or illegality of the gold bars. It is seen in this case that the revenue has not been able to discharge their burden that said gold bars were imported illegally while the appellant has been able to demonstrate that the said gold bars were in their licit possession. We have no hesitation in holding that the absolute confiscation of the seized gold bars is unsustainable, as all the documentary evidences produced indicate that the gold bars were legally imported. We set aside the confiscation of the said gold bars. Since confiscation of the gold bars is set aside, the consequent penalties imposed on the appellants are also liable to be set aside.

7. Accordingly, the impugned order is set aside and appeals allowed, with consequential relief.