THE PR. COMMISSIONER OF vs. M/s. SIVAN SECURITIES P LTD

Whether the Hon’ble Tribunal is correct in holding that the Appellant had not produced the Purchases Invoices issued by the jewellers during investigation and the Department could not verify the authenticity of those invoices when the adjudicating authority was bound to consider the defence of the Notice, had not doubted or disputed the authenticity of the Tax Invoices and had only held that they were not sufficient evidence to prove licit import on payment of customs duty as required in terms of Section 123 of the Customs Act, 1962?

Whether the Hon’ble Tribunal is correct in not following the judicial precedents with respect to inapplicability of Section 123 of the Customs Act, 1962 in the facts and circumstances of the case where the gold was not seized by the Customs Officers under the Customs Act, 1962?

Heard Shri. M.S. Nagaraja, learned Advocate for the appellant-assessee and Shri. Jeevan J. Neeralgi, learned AGA for the Revenue.

Learned Advocate for the assessee submitted that in a raid conducted by the Income Tax Authorities, 17 Gold bars were seized. Out of them, 6 Gold bars having Indian markings of MMTC, PAMP and HDFC Bank on them were released. Remaining 11 gold bars having either Foreign markings or no markings were seized. Income Tax authorities informed the DRI2 and subsequently, proceedings were conducted by the DRI and Customs Department. Appellant’s statement under Section 108 of Customs Act, 1962 was recorded. The Additional Commissioner of Customs, vide Order-in-Original dated 25.10.2017 ordered for absolute confiscation of gold biscuits of Foreign markings totally weighing 1028.35 grams under Section 111(d) of the Customs Act. He also ordered release of gold 550 grams, with Indian markings such as HDFC, PAMP and MMTC. He also imposed a penalty of Rs.9 Lakhs under Section 112(a) of the Customs

Shri. M.S. Nagaraja, further submitted that the Additional Commissioner of Customs has recorded in para 12 of the Order-in-Original that appellant had submitted documents to prove that he had purchased gold from two Jewellers i.e., M/s.Adya Jewellers and M/s. Sai Tirumala Jewellers. Having recorded that finding, he has held that as per Section 123 of the Customs Act the person from whom the gold is seized must prove that the goods are not smuggled into India. He adverted to para 7 of the order passed by the CESTAT and contended that the CESTAT has noticed that the assessee had produced the invoices for having purchased gold from the aforesaid Jewellers. However, the CESTAT has erroneously held that the appellant had not named the Jewellers in his statement and that the invoices were brought on record for the first time while replying to the show-cause notice and therefore, the Department could not investigate with regard to authenticity of the invoices.

Shri. Nagaraja further submitted that the Department has all the power and authority to summon and examine any Jewellers. The invoices were presented before the Additional Commissioner of Customs. Without causing any enquiry, the Additional Commissioner of Customs has ordered for confiscation and the same is not in accordance with law.

Shri. Jeevan J. Neeralgi, for the Revenue, opposing the appeal submitted that appellant has not whispered about the source from where he purchased gold at the time of recording his statement under Section 108 of the Customs Act. He has subsequently sought to justify the possession of gold by producing Invoices from M/s. Adya Jewellers and M/s. Tirumala Jewellers. Nothing had prevented him from bringing the said fact at the earliest point of time and at the time of recording statement under Section 108 of the Customs Act. Supporting the order passed by the CESTAT, he submitted that the CESTAT has rightly come to the conclusion that since the invoices were brought at a very belated stage, the

We have carefully considered rival contentions and perused the records.

In para 12 of his order, the Additional Commissioner of Customs has recorded as follows: “12. ……. The noticee enclosed 15 Purchase Bills of purchase of 15 Gold Biscuits, 4 Invoices from M/s. Adya Jewelers, Bangalore for 4X100 gms each and Balance from M/s. Sai Tirumala Jewelers. Thus, effectively the noticee has submitted documents to prove that he has purchased the gold bullion from two Jewellers. ………. ”

A perusal of the above finding shows that appellant had submitted documents to show the source from where he had purchased the gold. The CESTAT has held that the Invoices were produced while replying to the show-cause notice. Therefore, the Department could not investigate the authenticity of the Invoices.

Admittedly, the invoices were available before passing the Order-in-Original. The Customs Department has all the authorized to summon and investigate into the matter.

Appeal stands disposed of with the above observations.