In a recent case related to an allegation of gold smuggling, the Hyderabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) set aside the confiscation order as assessee discharge onus under section 123 of Customs Act, 1962.
Rayapudi Rajasekhar, Vemula Venkata Rama Krishna and Nomula Pavan Kumar, the appellants challenged the order by which the adjudication order has been confirmed, (I) ordering absolute confiscation of three gold bars and one small piece of remelted gold, totally weighing 1000.460 gms valued at Rs.50,07,302/-, seized under from the possession of Mr. N. Pavan Kumar with imposition of penalty of Rs.2,00,000/- under section 112(a) and (b)(i) of the Act.
The appellants further appealed against absolute confiscation of one gold bar and two uneven small pieces of gold totally weighing 129 gms valued at Rs.6,45,000/-, seized from the possession of Mr. V. Venkata Rama Krishna with imposition of penalty of Rs.50,000/- under section 112(a) & (b)(i) and against the imposition of penalty of Rs.1,00,000/- under section 112(a) & (b) on Mr. R. Rajasekhar.
Mr. R. Rajasekhar – appellant is the managing partner of M/s Lakshmi Narasimha Swamy Bullion Merchants. He is running a firm in the name and style of M/s Rayapudi Lakshmi Narasimha Rao Son, Jaggaiahpeta. The other two appellants viz., Mr. N. Pavan Kumar (NPK for short) and Mr. V. Venkata Rama Krishna (VVRK for short) are his employees.
The said two employees, while travelling by bus were intercepted by the officers of DRI at RTC Bus Stand, Ongole. These two persons admitted that they are carrying gold, which they had purchased in Chennai on cash payment as per the instructions of their owner – Mr. R. Rajasekhar and further stated that they were not carrying any documents/purchase bills for the gold carried by them. The officers detained the two persons and brought them to the office of Superintendent of Customs (Preventive) at Ongole at about 20:00 hrs.
Upon reaching the office, both these persons placed the gold on the table. From the packet submitted by Mr. NPK, 5 yellow metal biscuits containing inscription “sam/ 100 gm/999.0/Fine gold/ and a 6 digit unique number” were found. Inside the second packet, there were 3 yellow rectangular metal bars and one very small piece and Bill No.329 dt.01.12.2020 of M/s Lakshmipathy Thulabaram, NSC Bose Road, Chennai-79. On all the three rectangular bars, the number “999” was found inscribed several times.
On being questioned by the officers, they informed that as per the instructions of their employer Mr. R. Rajasekhar, they handed over the cash in Chennai to two persons viz., Mr. Jawahar and Mr. Rajesh and received said gold from them. Further, they did not have any receipt/voucher/bill in respect of gold carried by them.
It was viewed that without making any effort to collect evidence, the revenue has only been alleged that the appellant has been unable to submit evidence of licit possession of the gold. The whole case of Revenue is based on assumptions and presumptions, which has no base.
The Tribunal found that Revenue failed to examine the witnesses as required under section 138B in the adjudication proceedings and accordingly, such statements recorded during investigation cannot be relied upon as they have no evidentiary value under the provisions of section 138B of the Act.
A single member bench of Mr Anil Choudhary, Member (Judicial) observed that there were no foreign markings on the gold seized and subsequently confiscated, being 1129 gms of gold. The gold is comprised of bar/rods and bits and is not of standard shape, size and weight, as in the case of gold of foreign origin.
Mr. R. Rajasekhar who has claimed the ownership of the gold has led cogent evidence in the form of his business records and account statements in support of the gold in question. The Tribunal found that the explanation given by these appellants has been corroborated by the statement of smelters/melters both at Jaggayyapet and at Chennai and the appellants have discharged the onus under section 123 of the Act. While allowing the appeals, the CESTAT set aside the impugned orders. B. Seetha Ramaiah appeared for the Appellants and A. Rangadham appeared for the Respondent
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