The Hyderabad bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) quashed the penalty of Rs. 1.01 lakh due to the lack of proof of smuggling foreign gold.
The appellant, Manik Chand Soni, has appealed before the CESTAT against the order passed by the Commissioner (Appeals), in which the latter has confirmed the order passed by the Original Adjudicating Authority.
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Customs officers at the Hyderabad Domestic Air Cargo Complex intercepted a courier consignment containing gold and gold jewelry suspected to be of foreign origin and smuggled. After an investigation, a show cause notice was issued to various parties, including the appellant. The Additional Commissioner absolutely confiscated 100 grams of foreign-origin gold, valued at Rs. 5,07,200, belonging to the appellant, and imposed a penalty of Rs. 1,01,000.
The counsel on behalf of the appellant contended that all necessary documents, including invoices from M/s Augment Enterprises Pvt Ltd. and M/s Preeti Jewellers, were provided, showing the purchase of 999 purity gold, which was sent for job work as Kada. They contended that the Department failed to prove that the seized gold bore any foreign markings or was smuggled. The key argument was that the source of the gold purchase was neither challenged nor considered by the adjudicating authority or commissioner (Appeals).
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The bench observed that it was unclear how the department claimed the confiscated gold as a foreign-origin gold bar when the seizure was that of a bangle or kada. The bench further observed that when the appellant provided a proper justification for a lawful purchase of 999-purity gold from an authenticated source, the department should have confirmed the accuracy of the gold acquired.
The bench, comprising of A K Jyotishi (Member Technical), ordered to set aside the impugned order and remanded the matter back to the Original Authority for re-adjudication. The Original Authority is directed to reconsider all the evidence, including the two invoices the appellants claim to have already submitted during the investigation.
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