The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed confiscation of gold jewellery on the ground that there was no proof that seized gold jewellery is of foreign origin found during Directorate of Revenue Intelligence (DRI) Investigation.
It appeared that upon examination of the hand baggage of the first appellant, R. Mahaveer Pipada, the DRI found four boxes containing gold jewellery, which were examined, by a Government approved assayer namely, one Mohan Achari, who, after examination on the spot, appears to have certified that the said gold jewelleries were of foreign origin weighing 8.452 kgs. of 22 carat purity and valued at Rs.2,35,21,916/-.
On enquiry as to the source of foreign gold jewellery, the first appellant revealed that the same was smuggled into India from Singapore through various airports by ‘Burma Bazaar’ operators known to him.
It was also alleged to have indicated that he would record by writing the quantity of smuggled gold jewellery received by him from various operators in bits of paper and maintained the same until sale was made and the amount was fully realized and only thereafter he would discard the same.
The investigation concluded the seized jewellery as foreign jewellery only basing on these Assayers’ certificates, as reproduced supra, and the basis for their appraisal is not forthcoming, as to whether it is on the basis of their experience or on account of the model, purity or any other characteristic which differentiates Indian jewellery from Singapore jewellery.
The methodology adopted to arrive at such a determination and as to whether any known processes / methods have been adopted have not been stated. Further, on all the jewellery, there are no foreign markings and hence, there is no reasonable basis to conclude these to be of imported origin.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and P Dinesha, Judicial Member observed that “This is a case where the appellants have been penalized for an alleged activity which, according to the Revenue, has resulted in confiscation of the allegedly imported goods. When, therefore, a Show Cause Notice is issued by the DRI, a reasonable belief is required to be established before alleging any activity in the nature of smuggling. In the case of town seizure, the initial burden is always on the Revenue to prove as to what prompted it to reasonably believe that the gold / gold jewellery in question were smuggled / of foreign origin.”
“As the gold jewellery seized were not proved to be of foreign origin, the seizure of 4.627 kgs. of gold bars/bits, 3 nos. of 1 kg. gold bars and 10.011 kgs. of admittedly Indian-made gold jewellery as sale proceeds of smuggling is also not in accordance with the law” the Bench noted.
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