Gold Smuggling using Fabricated Challan: CESTAT Refuses to Release 26 Gold Biscuit Seized under Customs Act [Read Order]

The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)refused to release 26 gold biscuit seized under Customs Act,1962 as the gold was smuggled using fabricated challan. R. K. Angangbi Singh, the appellant filed appeal in the second round of litigation before the Tribunal, against the order in original passed by the Commissioner of Customs (Prev.) North- Eastern Region, Shillong. The appellants filed a writ petition being number 344/2015, before the High Court of Meghalaya, Shillong, seeking inter alia, the quashing of the seizure, dated 27.0 8.2014,and directing the department to release the 26 pieces of gold biscuits seized by it under Section 110 of the Customs Act 1962. The High Court dismissed the writ petition filed by the appellants, directing them to file statutory appeal in the matter and seek remedies as provided for under Chapter XV of the Customs Act, 1962. Against the impugned order of the High Court the appellants filed a SLP before the Apex Court which too got dismissed. Alongside, the Show Cause Notice got to be adjudicated by the Commissioner of Customs vide Order-in-Original confiscating absolutely the seized gold, besides imposing personal penalties on the appellants amongst others. Appeal filed against the impugned order before the Tribunal was decided vide Order dated 29.11.20172. Based on prior specific information, the Officers of the Railway Protection Force (RPF), intercepted four persons upon arrival at Dimapur, by train number 15960 DN Kamrup Express from bogey number S-8. Four persons intercepted, were (i) RK Templer Singh, (ii) RK Samsung Singh, (iii) Smt. T, Shantibala Devi, (iv) RK Rojita Devi. All the four accused were said to be resident of Imphal. The personal search of Smt. T. Santibala Devi yielded 13 pieces of yellow metal biscuits believed to be gold of foreign origin. Likewise, personal search of RK Rojita Devi also yielded another 13 pieces of yellow metal biscuits believed to be gold of foreign origin. Thus collectively recovering 26 pieces of yellow metal biscuits believed to be gold. Upon a query from the RPF officials it was found that the gold were given to them by RK Angangbi Singh at Imphal meant to be delivered to him at Howrah, Kolkata. They confirmed that they were carrying the said goods without any valid documents, legal authority. The four accused arrested by the RPF alongwith 26 gold biscuits said to be of foreign origin, were therefore handed over to the Customs Authorities at Tinsukia on 27.8.2014. It was observed by the Customs Officers that the seized gold biscuits were of rectangular shape having no markings. As the recovered gold biscuits and the description of the goods mentioned on the said three tax invoices did not match, the Customs Officers seized the goods, under the reasonable belief, that the said gold biscuits were of foreign origin and were smuggled into India in violation of Section 7(1)(c) and Section 11(c) and (f) of the Act, and hence liable to confiscation under Section 111(b) and 111(d) of the Customs Act. The value of the seized gold was assessed at Rs.1,22,15,438/- only (Rs. One crore, twenty two lakhs fifteen thousand and four hundred thirty eight only). There is nothing to establish on record that even at least one of the sets of invoices tendered were genuine and could cover the impugned sale and possession of the seized/confiscated gold. The onus cast upon the appellants to establish licit acquisition/possession of gold under Section 123 of the Act, is thus not discharged by the appellants. The appellants, by virtue of their books of accounts have stated that they are large scale gold dealers having procured nearly 43 kgs. of gold valued at around Rs.13 crore, from Kolkata during 2013- 14, but they ascribe their failure to manage invoices and other records to satisfactorily link the seized gold with the various sets of invoices tendered (or any licitly produced evidence), by them as to be on account of lack of man power. The appellant claimed that he was sending the gold biscuits to make jewellery and small denomination gold coins at Kolkata, which contention was reiterated before the High Court wherein he stated that he would make hallmark gold coins to sell the same at Imphal during the Nigol Chak Kouba festival in Manipur, R.K Sonia Devi has pointed out that gold was sold in jewellery and biscuits form like 5 gm and 10 gm etc. and limited gold biscuits were sold in a month. It was therefore clear that the biscuits and coins sold in the shop was limited, having weight between 5 to 10 gm. No prudent businessman would ever convert 1 kg gold bars into 166-167 gm biscuits when the market demand was for 5-6 gm gold biscuits. Rather, if at all required, one would have converted the 1 kg bar to 5-10 gm biscuits directly, if so was the need. This again establishes the complete hollowness of their arguments. A two member bench comprising Mr. R Muralidhar, Member (Judicial) and Mr. Rajeev Tandon, Member (Technical) observed that Supreme Court in case of KL Pavanny v. Asstt. Collector (HQ), has had held that “a mere general corroboration is sufficient and each of the detail was not required to be gone into. It even upheld the validity of the statement, containing wealth of information that was retracted in close proximity of making it and therefore disallowed the said retraction.” The CESTAT held that no case is made out by the appellants, calling for interference in the impugned order passed by the Commissioner. The Tribunal upheld the order and dismissed the appeals filed. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

Gold Smuggling using Fabricated Challan: CESTAT Refuses to Release 26 Gold Biscuit Seized under Customs Act [Read Order]

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