Kamal Kumar v. Commissioner Of Central Excise, Ghaziabad

[Order]. - The above mentioned appeals have been directed against the common order-in-appeal vide which the Commissioner (Appeals) has affirmed the order of the adjudicating authority who directed the confiscation of the 10 gold biscuits under Section 111(d) of the Customs Act and imposed redemption fine for getting the same redeemed, as well as penalties as detailed therein on the appellants.

2. The learned Counsel has contended that no presumption under Section 123 of the Customs Act that gold biscuits in dispute recovered from Sitaram, appellant on 17-1-98 were smuggled by him or any other appellants from a foreign country to India, as the recovery was effected by the police in the first instance during the course of checking of Bus in which Shri Sitaram was travelling in the area of Ghaziabad and which the police later on, handed over to the Customs officers on the following date i.e. 18-1-98. Therefore, the burden was on the Revenue to prove the smuggled nature of the gold biscuits but has failed to discharge this burden. He has also contended that the appellants have produced ample evidence on record, to prove the purchase of biscuits by Sitaram, appellant as employee on behalf of Shri Kamal Kumar appellant for valuable consideration from appellant Mangal Singh of M/s. M.S. Chain who purchased the biscuits from M/s. M.D. Overseas, a Government of India recognized export house but the same has been wrongly ignored by the authorities below. The Counsel has also argued that even M/s. M.D. Overseas had furnished proof of having purchased seized biscuits from M/s. Globex India Ltd., another Export House who imported the biscuits and the same has been also overlooked without justification.

3. On the other hand, the learned JDR has reiterated the correctness of the impugned order and contended that at the time of arrest by the police along with gold biscuits, Sitaram appellant could not produce any valid document for possession of the same and that the documents produced later on has been rightly ignored.

4. I have heard both the sides and gone through the records. From the record, it is evident that on 17-1-98, Sitaram appellant who was employee of Kamal Kumar appellant a trader in the silver bullion, at Moradabad, was caught by the police during the course of checking of Bus No. 4364 in which he was travelling and recovery of 10 gold biscuits each weighing 10 tolas, was affected from him. He was taken into custody and the biscuits were seized by the police. The police handed over Sitaram as well as gold biscuits to Customs officers on 18-1-98. Therefore, under these circumstances, no presumption under Section 123 of the Customs Act about the smuggled nature of the seized gold biscuits could be legally drawn in view of the law laid down by Supreme Court in the case of Gian Chand v. State of Punjab [ (S.C.)] which has also been followed by the Tribunal in A.K. Hamsa Mohideen v. CC Chennai [] and Ram Lubhaya v. CC, New Delhi [] that in such cases the burden would be on the Customs authority to prove the smuggled nature of the goods. But this burden in the instant case has not been discharged by the Revenue for having failed to produce any evidence. Rather the appellants have produced documentary evidence to show that the seized biscuits were not smuggled goods. Kamal Kumar, appellant has produced the copy of the Bill No. 005, dated 17-1-98 vide which the seized biscuits were purchased by him from M/s. M.S. Chain. He has also produced copies of ledger as well as cash book and stock register wherein he has made entries regarding the purchase of these biscuits. These biscuits were purchased by him through his employee Sitaram, appellant against payment of Rs. 4 lakhs. Even Sitaram appellant disclosed these facts and allegedly produced the bill and other documents before the police at the time of his arrest but the same were destroyed by the police. These very events were even again reiterated by him at the time when he moved the bail application before the District Judge, Meerut, as is evident from the bail order passed by the learned Judge. The perusal of the bail order also reveals that the customs department admitted before the Court of having verified the facts that Sitaram, appellant was an employee of Kamal Kumar, appellant and that Kamal Kumar had withdrawn money from his firm and the gold biscuits were sold to him by M/s. M.S. Chain owned by Mangal Singh, appellant.

5. Even from the copy of the ledger/stock register maintained by M/s. M.S. Chain placed on record, it is evident that the seized biscuits were sold by that firm to Kamal Kumar appellant on 17-1-98. Similarly, Mangal Singh appellant had also disclosed of having purchased the biscuits from M/s. M.D. Overseas, a Government of India recognized export house and Globex Export Pvt. Ltd. These facts also find mention in the show cause notice. Moreover, both the said firms had also admitted the sale of the biscuits to M/s. M.S. Chain in their communication to the customs authorities and even furnished the proof of payment of customs duty in respect of those biscuits. The Revenue had not disputed the correctness of their communication. Both the said firms had legal acquisition, possession of the biscuits for having imported on payment of duty and as such, were competent to sell the same. That being so, the purchase of the biscuits by Kamal Kumar, appellant through his employee Sitaram, appellant could not be said to be illegal or unauthorized. Therefore, the seized gold biscuits could not be said to be smuggled goods for invoking the provisions of Section 111(d). No penalty could also be imposed on any of the appellants.

6. In the light of the discussion made above, the impugned order is set aside in toto. The appeals of the appellants are allowed with consequential relief as per law.

(Order dictated and pronounced in the open Court).