Mitta Sunil Kumar Vs Commissioner of Customs (CESTAT Hyderabad)
Introduction: The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in Hyderabad addressed the case of Mitta Sunil Kumar vs. Commissioner of Customs, focusing on the absolute confiscation of 22 gold bars seized as smuggled goods, totaling 2200 grams. The tribunal also examined the imposition of penalties on Mitta Sunil Kumar and M R Prakash under Section 112(b)(i) of the Customs Act.
Background: Mitta Sunil Kumar, engaged in the jewelry business, faced the confiscation of 22 gold bars intercepted while being transported by an employee, Pachipulusu Venkata Nageswara Rao. The tribunal scrutinized the justification for confiscation and the imposed penalties.
Seizure and Ownership Claim: The gold bars were seized by the police, and Mitta Sunil Kumar claimed ownership, providing an invoice from Sai Tirumala Jewellers as proof of legitimate purchase. The gold’s assay confirmed its purity and market value.
Statements and Investigation: Statements from Mitta Sunil Kumar, P V Nageswara Rao, and M R Prakash (seller) were recorded. Discrepancies emerged regarding the serial numbers, leading to further investigation into the source of the gold.
Invoice Discrepancies: M R Prakash admitted selling gold to Mitta Sunil Kumar but acknowledged a mismatch in serial numbers. The investigation revealed that the serial numbers matched gold purchased by DP Gold Private Ltd. from MMTC-PAMP India Pvt Ltd.
Show Cause Notice and Confiscation: A show cause notice was issued proposing the confiscation of the gold bars under Section 111(l) and (d) of the Customs Act, along with penalties. The Order-in-Original ordered absolute confiscation and imposed penalties of Rs. 15 lakhs each on Mitta Sunil Kumar and M R Prakash.
Appeals to CESTAT: Mitta Sunil Kumar and M R Prakash appealed the decision. The Commissioner (Appeals) upheld the original order, leading to the appeals being presented before CESTAT Hyderabad.
Arguments and Legal Precedents: Legal arguments highlighted the lack of smuggling evidence, the non-matching serial numbers’ explanation, and the legitimate purchase proof provided by Mitta Sunil Kumar. Reference to precedents supported the appellants’ case.
CESTAT Decision: CESTAT Hyderabad reviewed the facts, emphasizing that the gold’s serial numbers aligned with the purchase by DP Gold Private Ltd. The tribunal concluded that the gold was not of a smuggled nature, overturning the confiscation order and penalties.
Outcome and Direction to Revenue: The appeals were allowed, and CESTAT directed the Revenue to either return the gold to Mitta Sunil Kumar or compensate its value with interest.
Conclusion: The CESTAT Hyderabad decision in the Mitta Sunil Kumar case highlighted the importance of factual evidence and matching serial numbers in determining the nature of seized goods. The tribunal’s ruling favored the appellants, emphasizing the lack of evidence supporting the smuggling allegation.
FULL TEXT OF THE CESTAT HYDERABAD ORDER
The issue in this appeal is whether the absolute confiscation of 22 numbers of gold bars (each biscuit weighing 100 gms) totalling 2200 gms valued at ₹ 71,44,968/- is justified which was seized under Mahajar dated 27.05.2019. Further issue is whether penalty have been rightly imposed Rs. 15 Lakhs on Appellant – Shri Mitta Sunil Kumar and Rs.15 Lakhs on Shri M R Prakash, the other Appellant both under Section 112(b)(i) of the Customs act.
2. The brief facts are that Mitta Sunil Kumar is carrying the Jewellery business at Proddatur, YSR Kadapa District. His Employee Shri Pachipulusu Venkata Nageswara Rao ( P V N Rao) while carrying 22 numbers of gold biscuits of 100 gms each, total weighing 2200 gms, the Police Department had intercepted him at Y-Junction of Yerrraguntla on 21-04-2019. Subsequently, on the information from Electronic Media, the Asst Commissioner of Customs, Customs Division, Tirupati, requested the Inspector of Police, Yerraguntla vide his letter dated 22-04-2019 to handover the seized gold. Thereafter the impugned goods had been handed over to a team of Customs authorities on 27-05-2019. It is worthwhile to note that the Inspector of Police has handed over goods only on the Instructions of Asst Commissioner of Income Tax, Investigation, Tirupati. Mitta Sunil Kumar visited the Customs Preventive Division, Tirupati claiming the ownership of the seized gold of 2200 gms (22 numbers of gold biscuits of 100 gms each) and submitted the copy of the Invoice bearing No. 00601, dated 20-04-2019, as a proof of purchasing Legitimate Gold. The said copy of the Invoice has been submitted to this Bench as Appendices, as a part of Additional information and also explained how he made payments towards the purchase of the legitimate gold. The seized gold was got assayed by Approved Gold Appraiser – Mr K Subbarayudu, of State Bank of India, Kaddapa, the details of which are as follows:
