The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT)Indian origin gold bangles and silver bar seized are not prohibited goods and deleted the penalty under section 112(b)(i) of the Customs Act, 1962.
The Appellant Mr. Daleep Kumar Verma proprietor of M/s. Shreeji Traders and Manufacturers, (STM) are engaged in the business of job work of gold jewellery. They claimed that they receive the raw material (gold/gold jewellery) from their customers and convert the same into jewellery as per the specifications given by the customers.
They claimed that they received Gold from Mr Karan Sahadev, proprietor of M/s. K.S. Traders, Chandni Chowk, Delhi (Co-Noticee,KSTE) to makejewellery. For the job work purpose, they have appointed two persons named Mr Rohit Kumar Suri, who is a co-appellant in this andMr Harshit Gakhar (Co-noticee) as employees. The business was set up in Imphal (Manipur).
Mr Rohit Kumar Suri had booked one parcel containing 90 bangles through air cargo, Kolkata by Indigo Airlines on 17.05.2019 on behalf of the firm, vide Air Way Bill No.31270242373, having a gross weight of 5.22 kgs. and net weight of 4.960090 Kgs.
The officials found that the parcel contains 90 bangles and an unsigned original copy of the Tax Invoice bearing Number J-00037 dated 17/05/2019 was also found inside the parcel. Mr Rohit Kumar Suri stated that these pieces of jewellery came from Delhi for finishing work and are now being sent back. As he did not have documents relating to the inward/outward movement of the gold dealt by him, the 90 bangles were impounded and later seized under section 110(1) of the Customs Act, 1962.
The search of the premises of the firm at Imphal resulted in the recovery of certain other material including a 1 Kg Silver bar, which was also seized by DRI, under section 110(1) of the Customs Act, 1962, as there was no document available with them for its legal importation. Both were arrested on 17.05.2019, under section 104 0f Customs Act, 1962.
Adjudicating authority passed the Order-in-Original dated 16.03.2021 confiscating the Gold and silver bar and imposed penalties on the Appellants. The Commissioner of Central Excise & Customs (Appeals), rejected the appeal.
The Appellants contended that there is no substance in the claim of the Department that the bangles and the silver bar were made from foreign-origin gold. The confiscation of the gold bangles and silver barsis not sustainable. There is no evidence on record to show that the goods were smuggled into India from Myanmar.
It was argued that there is no evidence other than the statements of the Co Noticees, which were also retracted later. The appellant contended that the gold bangles and silver bars, not having any foreign markings were not liable for confiscation.
A two-member Tribunal comprising Shri P K Choudhary,(Judicial) and Shri K Anpazhakan, (Technical) observed that the silver bar is of Indian origin and the statement of the co-accused cannot be relied on without any independent corroboration.
Under section 112(b)(i) of the Customs Act, 1962 penalty is imposable when the person is found to be dealing with goods for which prohibition is in force. The gold bangles and the silver bar dealt by the Appellants were established to be of Indian origin and hence not prohibited goods.
The CESTAT held that penalty is not imposable on them under section 1129B)(i) of Customs Act, 1962.
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