Case Law Details
Ravindra Soni Vs Commissioner of Customs (Preventive) (CESTAT Kolkata)
Introduction: The case of Ravindra Soni vs Commissioner of Customs (Preventive) revolves around the confiscation of gold by authorities, contested by M/s M.M. Jewels. This article provides a comprehensive analysis of the legal arguments, evidentiary support, and eventual decision by the CESTAT Kolkata.
Detailed Analysis: The controversy began when officials from the Divisional Preventive Unit, Barasat Customs Division, seized gold suspected to be of foreign origin from a workshop in Kolkata. The appellants, Ravindra Soni and M/s M.M. Jewels, challenged the absolute confiscation of the gold, arguing it was procured through lawful means. Central to their defense was evidence showing regular procurement of old gold jewelry and its refining through legitimate channels.
The Customs Act, 1962, particularly Section 123, mandates that gold can only be confiscated if proven to be of foreign origin or smuggled. Despite the purity of the confiscated gold bars (99.96%) matching local standards and supporting documentation from M/s G.N.H. & R [P] Ltd., Kolkata, the Revenue failed to establish foreign markings or smuggling.
The appellants successfully argued that they fulfilled their obligation under Section 123 by demonstrating lawful procurement and refining processes through documented transactions. Conversely, the Revenue’s case lacked substantiation, unable to prove the gold’s illicit origins.
Conclusion: In conclusion, the CESTAT Kolkata set aside the order for absolute confiscation, ruling in favor of Ravindra Soni and M/s M.M. Jewels. The decision underscores the importance of substantiating claims under the Customs Act, ensuring that confiscations are based on conclusive evidence of foreign origin or smuggling. This case serves as a precedent clarifying the burden of proof in similar disputes concerning confiscated goods under customs regulations.
This article provides a detailed examination of the legal principles applied in Ravindra Soni’s case, highlighting the significance of procedural fairness and evidentiary standards in customs enforcement.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The appellants are in appeals against the impugned order challenging absolute confiscation of gold recovered during the investigation and imposition of penalties on the firm as well as on the appellants.
2. The facts of the case are that the Appellant No.(1), namely, Shri Ravindra Soni is the proprietor of M/s M. M. Jewels and is engaged in the business of gold and diamond jewellery having its office in Kolkata and having valid Trade License issued by Kolkata Municipal Corporation. The Appellant No.(2) is an employee of the Appellant No.(1).
2.1 Acting on the specific information recorded by DRI that the gold of foreign origin in biscuits form and bars form are being melted at the workshop of Shri Badal Das Khan situated at 88, Monohar Das Street, 2nd Floor, Kolkata-700007, the officers of the Divisional Preventive Unit, Barasat Customs Division, went the said place on 19.11.2013 at 4.30 pm and found that in one furnace melting of gold was in process and two persons, namely, Shri Laxman Soni & Shri Binoy Das, were present. On being asked, Shri Laxman Soni stated that they came here for melting of gold and he brought two kgs. of gold in lump for melting as the said gold was in bar form, but he was unable to show any valid documents for procurement of such gold. Shri Binoy Das stated that he has brought the gold for melting purposes, but was not able to show any valid documents. As the gold recovered from Binoy Das, was not melted by him and recovered from the possession of Shri Binoy Das. The case was booked against Shri Binoy Das, which is the subject matter of these appeals.
2.2 The Officers, prima-facie, found that two kgs. of “Yellow Metal”, which was on the furnace and brought by Shri Laksman Soni to be melted may be of foreign origin. As Shri Laxsman Soni was unable to produce any registered documents for procurement of the said gold, the said gold was taken in the custody and seized.
2.3 Thereafter, investigation was started. The statement of Shri Laksman Soni was recorded and Shri Laksman Soni stated that Shri Ravindra Soni, owner of M/s M. M. Jewels, has handed over the said gold to him for melting purposes at the workshop of Shri Badal Das Khan, which was seized.
2.4 Premise of M/s M. M. Jewels was also investigated , nothing was found, but certain documents were produced to prove that they have purchased old gold jewelleries from different persons and purified the said gold jewellery from M/s G.N.H. & R [P1 Ltd., Kolkata. On that basis, the said premise was also searched and noting incriminating was found. It was also found that M/s M. M. Jewels sent the old gold jewelleries to M/s G.N.H. & R [P1 Ltd., Kolkata, many times for refinery purposes and paid charges with service tax.
2.5 Initially, the gold was tested to local jewellery, who stated that the gold bars are 24 Carat Gold and as per CRCL report, the purity of gold is 99.96%/99.95%. Thereafter, the statement of Shri Ravindra Soni was also recorded, who stated that he has sent the old jewelleries for melting purposes at the workshop of Shri Badal Das Khan, where the gold has been seized.
2.6 On the basis of these facts, Shri Ravindra Soni, also sought provisional release of the gold, which was denied.
2.7 The proceedings were initiated by issuance of show-cause notice for absolute confiscation of gold in question and to impose penalties on the firm as well as on both the appellants.
2.8 The matter was adjudicated and it was held that the gold is liable for absolute confiscation. Consequently, the penalties on M/s M.M.Jewels and its proprietor, Shri Ravindra Soni and their employee, Shri Laxman Soni, were imposed equivalent to the value of gold.
2.9 Aggrieved from the said order, the appellants are before us.
3. The ld.Counsel for the appellants, submits that the appellants are procuring the old gold jewelleries by converting the same in gold and deal with the said business. Although while the gold in lump was sent for melting purposes at the workshop of Shri Badal Das Khan and process of melting was going on, there is no recovery of gold having the mark of foreign origin, it is the case of town-seizure . Moreover, the purity of gold was also of 99.95%. It is his submission that the appellants deal with the old gold jewelleries and maintaining their records. As per the gold account standard recorded the procurement of gold in their Books of Accounts, the same got refined from M/s G.N.H. & R [P] Ltd., Kolkata and to that effect, the appellants had produced certain “Hall Marking” issued by them from time to time. In that circumstances, the appellants have discharged their onus to prove that they have procured the gold from licit means and the Revenue has failed to discharge their onus that they are having reasons to believe that the gold in question is of smuggled in nature. Moreover, no marking was found on the gold in question. Therefore, it cannot be said that the gold in question was of foreign origin and smuggled one. As the Revenue has failed to discharge their onus to prove that the gold in question is of foreign origin, therefore, the Revenue has failed to give the reason to believe for seizure of the gold in question. In that circumstances, the gold in question cannot be held liable for confiscation. Consequently, the same is to be released to the appellants and no penalties are imposable on the appellants.
4. On the other hand, the ld.A.R. for the Revenue supported the impugned order.
5. Heard both sides and considered the submissions.
6. We find that it is a case of town-seizure. Moreover, the gold bars recovered were having no markings and having purity of 99.96%. In that circumstances, the Revenue has failed to discharge their onus how they form an opinion that they have a reasonable belief that the gold is of foreign origin and smuggled one. Moreover, the appellants have been able to prove by producing various documentary evidences, like, their Books of Accounts and certification from M/s G.N.H. & R [P] Ltd., Kolkata and the appellants have also produced certain “Hall Marking” issued by them from time to time. In that circumstances, the appellants were able to discharge their onus of procurement of gold through licit means in terms of Section 123 of the Customs Act, 1962.
7. On the other side, the Revenue has failed to discharge their onus to prove that the gold in question is of foreign marking or smuggled
8. In that circumstances, we hold that the gold in question cannot be held liable to be confiscated. Consequently, the order for confiscation of gold in question is set aside and as the gold in question is not liable for confiscation, therefore, no penalties can be imposed on the appellants.
9. In view of this, we set aside the impugned order and allow both the appeals with consequential relief, if any.
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