The New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that mere purity being equivalent to the purity of foreign gold is wrongly held to be criteria to hold melted gold as the gold of foreign origin.
Suresh Chand Garg, the appellant challenged the Order-in-Appeal which the absolute confiscation of seized gold weighing 999.940 grams of gold has been confirmed along with the imposition of penalty upon the appellant.
Based on specific intelligence, one Innova car bearing registration no. RJ19FA 0369 was intercepted by the Officers of the Directorate of Revenue Intelligence (DRI) Jodhpur and CGST. When the intercepted vehicle was searched, 5514.8 grams of smuggled gold was recovered along with some slips issued for testing of gold by M/s. New Satyam Tounch Centre, Jaipur. During the search, a gold bar weighing about 999.940 grams was recovered from the appellant who was found present at the said premises during the search proceedings.
It was informed to the DRI Officers that the said gold as has been obtained from melting the entire jewellery which belongs to his family and the families of two other brothers. On account of a reasonable belief that the gold bar found in possession of Shri Suresh Chand Garg might have been the smuggled one, the officers detained the gold bar under Panchnama.
The department was of the view that since the appellant has failed to produce any bill, invoice or any other document that may prove his ownership of the detained gold bar Section 123 of the Customs Act, 1962 be invoked. The penalty was also proposed to be imposed upon the appellant.
It was evident that there was no reasonable belief with the DRI officers at the time of detaining/seizing the gold from the appellant, the onus was upon the department to prove that the gold in the hands of the appellant was foreign smuggled gold.
In the absence of any evidence by the department but reasonable corroborative evidence by the appellant that the gold bar in his hand was the melted gold out of his joint family’s entire jewellery. The CESTAT held that the gold in question is not proven to be smuggled gold of foreign origin. Mere purity thereof being equivalent to the purity of foreign gold is wrongly held to be the criteria to hold the melted gold as gold of foreign origin.
It was viewed that the entire proceeding is miserably silent about the huge quantity of 5514.8 grams of gold from the Innova car bearing registration no. RJ19FA 0369 was intercepted at Bilar in Jodhpur.
A single-member bench comprising Dr Rachna Gupta, Member (Judicial) held that “since department, despite query raised, was unable to inform about any other proceedings/prosecution with respect to the said recovery of 5514.8 grams of gold, an intimation was given to the Chairman, Central Board of Indirect Taxes and Customs (CBIC) to enquire about the proceedings, and to take appropriate action about the recovery of that huge quantity of gold, if no action found taken. “
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