The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed confiscation under Customs Act and observed that documentary evidences on legitimate ownership of seized gold and cash.
Search was conducted at the residential and factory premises of Shri Prem Sagar Arora, and more than 25kgs gold and jewellery items and cash amounting to Rs.20,00,000/- were found. During investigation, modus operandi of Shri Prem Sagar Arora was revealed whereby he misused the EOU Scheme.
In his statement, the Appellant said that he was a jeweller running M/s Surya Jewellers (though managed by his father) and purchased foreign origin gold from many people like Saurabh and M/s Somya Bullion, NTS, Global, P C Gold etc; the seized gold bar was probably bought by RTGS from M/s Somya Bullion, the seized cash was duly accounted in the Books of Account and all documents regarding the seized gold and cash were submitted to DRI; serial numbers of gold bars are not written on invoices; and Serial number was erased by him because as he regularly cut the gold to sell small pieces to various customers.
Accordingly, Show Cause Notice was issued proposing confiscation of seized gold under Section 111, currency under Section 121 as sale proceeds of smuggled gold and penalty under Section 112(b) on M/s Mahalaxmi Jewel Exports, Shri Prem Sagar Arora, M/s Mine O Gold and the Appellant.
Dr. Anup Kumar Srivastava and Rahul Raheja, Counsel for the appellant stated that the case against the appellant has been made on the basis of assumptions and presumptions and there is not an iota of evidence linking the appellant with any wrongdoing of M/s Mahalaxmi Jewel Exports, Shri Prem Sagar Arora, or M/s Mine O Gold, nor is there any proof that confiscated gold is smuggled, or that the confiscated money is sale proceeds of smuggled gold.
A Two-Member Bench comprising PK Choudhary, Judicial Member and Sanjiv Srivastava, Technical Member observed that “Since documentary evidence has been presented in favour of the gold showing the Appellant’s legal ownership and acquisition, we hold that tenets of Section 123 Customs Act are satisfied and the Appellant has discharged the burden of proof. The Appellant’s statement also reiterates the same. On the other hand, the Department has not been able to provide any iota of evidence to show that the seized gold bar was smuggled.”
“There can be no confiscation of the seized gold bar and currency under the Customs Act, 1962 and it is accordingly quashed. Imposition of penalty on the Appellant is also untenable and is set aside. Since the impugned order qua the Appellant cannot be sustained, it is set aside. Accordingly, the appeal is allowed with consequential benefits as per law” the Bench noted.
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