" \n \n \n \n (1) Appeal No. C/30758-\n30760/2024 \n \n \nCUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL \nHYDERABAD \nREGIONAL BENCH - COURT NO. – I \n \nSingle Member Bench \nCustoms Appeal No. 30758 of 2024 \n(Arising out of Order-in-Appeal No.VJD-CUSTM-000-APP-026, 027 & 028-2023-24, dated \n31.10.2023 passed by Commissioner of Central Tax & Customs (Appeals), Guntur) \nShri Munagapadi Raghavendra Kumar .. APPELLANT \n23/60, Bacha Banda Street, \nPatha Kadapa, Y.S.R, \nAndhra Pradesh – 516 002. \nVERSUS \nCommissioner of Customs \n \n .. RESPONDENT \n(Preventive), Vijayawada \nD. No. 55-17-3, C-14, 2nd Floor Stalin Corporate, \nRoad No. 2, Industrial Estate, Autonagar, \nNTR \nAndhra Pradesh – 520 007. \n \nWITH \nCustoms Appeal No. 30759 of 2024 \n(Arising out of Order-in-Appeal No.VJD-CUSTM-000-APP-026, 027 & 028-2023-24, dated \n31.10.2023 passed by Commissioner of Central Tax & Customs (Appeals), Guntur) \nShri C. Chandrasekar \n \n .. APPELLANT \nD.No. 42/654-I, MJ Gunta, \nCuddappah, \nAndhra Pradesh – 516 001. \nVERSUS \nCommissioner of Customs \n \n .. RESPONDENT \n(Preventive), Vijayawada \nD. No. 55-17-3, C-14, 2nd Floor Stalin Corporate, \nRoad No. 2, Industrial Estate, Autonagar, \nNTR \nAndhra Pradesh – 520 007. \n \nAND \nCustoms Appeal No. 30760 of 2024 \n(Arising out of Order-in-Appeal No.VJD-CUSTM-000-APP-026, 027 & 028-2023-24, dated \n31.10.2023 passed by Commissioner of Central Tax & Customs (Appeals), Guntur) \nShri K. Madhava \n \n .. APPELLANT \n39/209-2, Pakkipalli, \nChinnachowk, Kadapa, Y.S.R., \nAndhra Pradesh – 516 002. \nVERSUS \nCommissioner of Customs \n \n .. RESPONDENT \n(Preventive), Vijayawada \nD. No. 55-17-3, C-14, 2nd Floor Stalin Corporate, \nRoad No. 2, Industrial Estate, Autonagar, \nNTR \nAndhra Pradesh – 520 007. \n \nAPPEARANCE: \nShri T. Chezhiyan, Advocate for the Appellant. \nShri Sandeep Kumar Payal, Authorised Representative for the Respondent. \n \n\n \n \n \n \n (2) Appeal No. C/30758-\n30760/2024 \n \n \nCORAM: HON’BLE Mr. ANGAD PRASAD, MEMBER (JUDICIAL) \n \n \n \n \n \n \n \nFINAL ORDER No. A/30048-30050/2025 \n \n Date of Hearing:27.01.2025 \n Date of Decision:12.02.2025 \n \n \n \nAll the above three appeals have been filed against a common Order-\nin-Appeal \nNo.VJD-CUSTM-000-APP-026, \n027 \n& \n028-2023-24, \ndated \n31.10.2023 (impugned order). As the facts and circumstances of the case \nare same for all the three appellants, the appeals are taken up for disposal \nby way of this common order. \n2. \nBrief facts of the case are that the Officers of Customs has seized 18 \nand 22 carat gold jewellery such as Bracelet, Short chains, short chain \n(broken), Long Chain, Mangalasuthra chain in Train No. 17651 Kachiguda \nExpress at Puttur Railway Station. Though there is no power for seizure, \nsince the seized gold jewellery does not bear any foreign marking, still the \nofficers of Customs has effected the seizure. Thereafter the Appellants were \nasked as to why the seized gold jewellery should not be confiscated and as \nto why penalty should not be imposed. \n3. \nThe appellants vide reply dated 14.10.2022 have given their reply. \nAfter the completion of personal hearing, Order-in-Original No. 13/2022-23 \n(cus.) -AC dated 31.03.2023 was passed absolutely confiscating the gold \njewellery and penalty was imposed against the appellants by the Original \nAuthorities. Aggrieved by this Order, they have filed an appeal before the \nCommissioner of Customs (Appeals), Guntur, who vide Order-in-Appeal \nNo.VJD-CUSTM-000-APP-026, 027 & 028-2023-24, dated 31.10.2023 \nconfirmed the Order-in-Original No. 13/2022-23 (Cus)-AC dated 31.03.2023. \n\n \n \n \n \n (3) Appeal No. C/30758-\n30760/2024 \n \n \n4. \nLearned Counsel for the appellants submits that the Authorities below \nfailed to note that since the seizure is a domestic seizure and the seized \njewellery are 18 and 22 carat, it is not required to produce any proof for the \nsame. Assuming such proof is required, the appellants has categorically \nproduced the bills and the evidences, such as from where it is purchased, \nthe seller name etc. It is clearly and categorically stated by the applicant \nthat the statement is obtained by force and threat. Any person who is in \ncustody of a law enforcing agency, if compelled to make a statement, that \nperson is bound to give such a statement, as per the instructions of officers. \nAnd once the statement is retracted that too with evidences, then the \nauthority must take only the version which is supported by evidences in \nclear terms vide the retraction letter. It is pertinent to mention here that \nthe very burden of proof that goods are of foreign origin is with the \ndepartment. Thus the findings of the authorities below are absolutely \nunsustainable and wrong. Therefore, he prays to set aside the same. \n5. \nOn the other hand, Learned AR argued that there is sufficient evidence \nto prove that the gold seized were smuggled gold and rightfully confiscated \nand imposed penalties. The onus to prove that it was not smuggled was on \nthem in view of provisions of Section 123 of Customs Act, 1962 which they \nhave failed to discharge. \n6. \nHeard Learned Counsel for the appellant Shri T. Chezhiyan and \nLearned AR Shri Sandeep Kumar Payal for the Department and perused the \nrecords. \n7. \nStatements recorded by Customs Officer under Section 108 of the \nCustoms Act which is thus as mentioned in Order-in-Appeal in para 2.3 to \n2.9: \n\n \n \n \n \n (4) Appeal No. C/30758-\n30760/2024 \n \n \n2.3 \nA statement was recorded from the Appellant-1 under Section108 of the \nCustoms Act, 1962 wherein he admitted, inter alia; that he is having a small shop \nand is working as gold worker since 10 years; that he proceeded to Chennai along \nwith 90 grams of 24 carat gold on 05.04.2022 and obtained 100.962 grams of 22 \ncarat gold from M/s Jain Jewellers, Chennai and 24.97 grams of 22 carat jewellery \nfrom M/s Shree Jewellers, Chennai; that he obtained the 24 carat gold from Mr. \nNizam in Kadapa; that there are no documents to prove that the said gold \nornaments are obtained from M/s Jain Jewellers & M/s Shree Jewellers-Chennai. \n2.4 \nThe Appellant-1 vide letter dated 23.05.2022 retracted the contents in the \nstatement dated 05.04.2022 and submitted a list of owners; the details submitted \nvide letter dated 23.05.2022 is as mentioned below: \nName of the Actual \nowner of the gold \nornaments \nseized \non 05.04.2022 \nDescription \nof \ngoods & Quantity \nWeight \nin \ngrams \nDetails of supplier with \ninvoice Nos. \nAppellant – 1 \n3 – short chains \n1 – Short chain \n(broken) \n19.980 \ngrams \nInvoice No. 100 dtd. \n05.04.2022 of M/s Jain \nJewellers, Jai Gurudev \nComplex, Shop No. 12, \nThulasingam \nStreet, \nSowkarpet, Chennai \nAppellant – 2 \n2 – Mangalasutra \nchains \n43.840 \ngrams \nInvoice \nNo. \n01 \ndtd. \n05.04.2022 of M/s Jain \nJewellers, Jai Gurudev \nComplex, Shop No. 12, \nThulasingam \nStreet, \nSowkarpet, Chennai \nAppellant – 3 \n1 – Bracelet \n \n27.120 \ngrams \nInvoice \nNo. \n99 \ndtd. \n05.04.2022 of M/s Jain \nJewellers, Jai Gurudev \nComplex, Shop No. 12, \nThulasingam \nStreet, \nSowkarpet, Chennai \n \n2 – Long Chains \n30.002 \ngrams \n \n \nTotal:- \n125.932 gms \n \n2.5 \nIn view of the retraction vide letter dated 23.05.2022 submitted by the \nAppellant-1 statement dated 14.06.2022 was recorded under Section 108 of \nCustoms Act 1962; wherein he stated; that he was tensed at the time of seizure; \nthat the entire gold recovered from him on 05.04.2022 was purchased from M/s \nJain Jewellers, Chennai; that he is submitting invoice’s and bank transactions as \nproof for the gold jewellery seized on 05.04.2022; \n2.6 \nOn submission of retraction vide letter dated 23.05.2022 by the Appellant-\n1, a statement dated 14.06.2022 of Mr. S Dinesh, Proprietor M/s Jain Jewellers, \nChennai was recorded under Section 108 of Customs Act 1962, wherein he stated,; \nthat he got an order over phone from the three Appellants; that he issued three \ninvoices dated 05.04.2022 for the orders received from the three Appellants; that \n\n \n \n \n \n (5) Appeal No. C/30758-\n30760/2024 \n \n \nhe subsequently received the amount through RTGS transactions to his bank \naccount; that as a trade practice he offer credit facility for 25-30 days for the \npurchased made from his shop for the sincere and committed customers (i.e three \nAppellants) \n2.7 \nA statement dated 14.06.2022 was recorded from the Appellant – 2, \nunder Section 108 of Customs Act 1962, wherein he stated; that he knew the \nAppellant-1 and the Proprietor of M/s Jain Jewellers as part of his business; that he \nordered gold jewellery of 43.480 grams (2 mangalsutra chains) to M/s Jain \nJewellers over phone; that he requested the Appellant-1 to collect the same from \nChennai; that he paid the amount on 08.04.2022 through RTGS transactions and \nsubmitting invoice and Bank transaction details as proof against the purchase he \nmade. \n2.8 \nA statement dated 14.06.2022 was recorded from the Appellant – 3, \nunder Section 108 of Customs Act 1962, wherein he stated; that he knew the \nAppellant-1 and the Proprietor of M/s Jain Jewellers as part of his business; that he \nordered gold jewellery of 57.122 grams (27.120 grams 1-Bracelet, 30.002 grams 2- \nlong chains) to M/s Jain Jewellers, Chennai over phone; that he requested the \nAppellant-1 to collect the same from Chennai; that he paid the amount on \n08.04.2022 through RTGS transactions and submitting invoice no. 01 dtd \n05.04.2022 and Bank transaction details as proof against the purchase he made. \n2.9 \nA statement dated 05.08.2022 was recorded from Mr. Mukesh Kumar, \nProp:-M/s Shree Jewellers, Chennai, under Section 108 of Customs Act 1962 \nwherein he stated; that he doesn’t why the Appellant-1 stated that he has given 25 \ngrams of 24 carat gold to him; that the Appellant-1 has not purchased any gold \njewellery from him; that he has not done any financial transaction with the \nAppellant-1. \n \n8. \nThe seized gold are gold jewellery and Appellant No. 1 Shri \nMunagapadi Raghavendra Kumar stated in his statement that he is having a \nsmall shop and is working as a gold worker since 10 years and purchased \ngold from M/s Jain Jewellers, M/s Shree Jewellers, Chennai and M/s Nizam in \nKadapa. Later on stated on 14.06.2022 that he was tensed at the time of \nseizure that the entire gold recovered from him was purchased from M/s Jain \nJewellers, Chennai. Mr. S. Dinesh, Proprietor of M/s Jain Jewellers, Chennai \nstated in his statement that he got an order over phone dated 05.04.2022 \nand subsequently received the amount through RTGS to his account that as \na trade practice he offer credit facility for 25-30 days for purchase made \nfrom his shop for the sincere and committed customers. \n9. \nShri C. Chandrasekhar, Appellant No. 2 states that he knew the \nAppellant No. 1 and proprietor of M/s Jain Jewellers as part of his business \n\n \n \n \n \n (6) Appeal No. C/30758-\n30760/2024 \n \n \nand he ordered gold jewellery of two mangalasuthras to M/s Jain Jewellers \nover phone and requested to Appellant No.1 to collect the same and paid the \namount on 08.04.2022 through RTGS. \n10. \nShri K. Madhava, Appellant No.3 stated in his statement that he knew \nthe Appellant No. 1 and Proprietor of M/s Jain Jewellers as part of his \nbusiness and ordered gold jewellery of 1 Bracelet and 2 long chains to M/s \nJain Jewellers, Chennai over phone and also requested to Appellant No. 1 to \ncollect the same and paid the amount on 08.04.2022 through RTGS. \n11. \nTherefore, appellants satisfactorily proved that seized gold belongs to \nthem. There are no any material retractions or contradictions in their \nstatement. Their statements are natural. No any special delays in \nstatement of Appellant No. 1 on 05.04.2022 and 23.05.2022. Findings of \nAdjudicating Authority as well as Commissioner (Appeals) are based on \nassumptions and presumptions. M/s Jain Jewellers accepted to receive \npayment through RTGS. In business, payment as such in the statement are \nnatural transaction. \n12. \nThe word “smuggling” is defined under Section 2(39) as: \n“smuggling” , in relation to any goods, means any act or omission which will render \nsuch goods liable to confiscation under Section 111 or Section 113; \nSection 111: Confiscation of improperly imported goods, etc -- The following goods \nbrought from a place outside India shall be liable to confiscation ---- \nxxx \nxxx \nxxx \nxxx \n \n \n\n \n \n \n \n (7) Appeal No. C/30758-\n30760/2024 \n \n \n13. \nIn these cases, no any facts relating to Section 113 of the Customs \nAct. Accordingly, Section 111 the goods brought from outside India. The \nseized goods recovered from Railway Station, Puttur. The seized goods are \ndomestic ornament. Appellant No. 1 stated in his statement that he is \nhaving a small shop and is working as a gold worker since 10 years. \n14. \nIn this regarding, Section 123 of The Customs Act, 1962 is important \nto mention that is: \n123. Burden of proof in certain cases. \n(1) Where any goods to which this section applies are seized under this \nAct in the reasonable belief that they are smuggled goods, the burden of \nproving that they are not smuggled goods shall be- \n(a) in a case where such seizure is made from the possession of any \nperson,- \n(i)on the person from whose possession the goods were seized; and \n(ii)if any person, other than the person from whose possession the \ngoods were seized, claims to be the owner thereof, also on such other \nperson; \n(b) in any other case, on the person, if any, who claims to be the owner of \nthe goods so seized. \n(2) This section shall apply to gold and manufactures thereof, watches, \nand any other class of goods which the Central Government may by \nnotification in the Official Gazette specify. \n15. \nHon’ble Supreme Court in the case of Union of India Vs Kasambhai \nUmerbhai Kureshi [1979 SCC online Bom 267] held that where there was \nnothing on record to show that the goods were seized by the Police on \nreasonable belief that they were smuggled goods, Section 123 would not \napply. \n16. \nLearned Counsel for the appellants relied on the decision of the Co-\nordinate Bench of this Tribunal Shreyas Agarwal and Other Vs Commissioner \nof Customs (Prev) in which it is held as follows in para no. 60: \n\n \n \n \n \n (8) Appeal No. C/30758-\n30760/2024 \n \n \n60. The goods must be smuggled goods. The word `smuggled’ means that the goods were \nof foreign origin and they had been imported from abroad. Only then does the presumption \nunder Section 123 arise. The goods themselves did not suggest that the petitioner was an \nold smuggler or a dealer in smuggled goods. If there was such information with the \ncustoms, they ought to have disclosed it. The goods themselves did not suggest any illicit \nimportation. Nor was there any inscription on the goods which could be the basis of the \nreasonable belief that the goods were of foreign origin. \n17. \nHe further relies on the case law of R. Mahaveer Pipada Vs \nCommissioner of Customs dated 31.08.2023. In the case of town seizure, \nthe initial burden is always on Revenue to prove as to what prompted it to \nreasonably believe that the gold/gold jewellery in question were smuggled/of \nforeign origin. \n18. Learned DR relied on Commissioner of Customs, Cochin Vs Om \nPrakash Khatri [2019 (366) ELT 402 (Ker)] in which it is held that “Burden of \nproof, reasonable belief, unmarked gold recovered from the possession of \ntwo persons and their statements as to the source of the gold sufficient to \nhave a reasonable belief that gold is smuggled. No satisfactory explanation \ngiven to prove the legitimacy of the gold carried by intercepted persons. \nBurden of proof under Section 123 of Customs Act, 1962 being only of a \nreasonable belief, effectively discharged by Department. Mere fact that \ninterception and seizure not affected in an international border or near an \nairport or seaport irrelevant. Onus to prove that the gold was not smuggled, \nso as to upset the reasonable belief entertained by Department shifted and \nsquarely rested on owner. Registered produced and the transactions alleged \nas well as the quantity seized and that seen from the alleged Travel \nAuthorisation Vouchers not tallying”. The seized gold or ornament, there is \nno sufficient reason to believe the gold is smuggled. Appellants have given \nsatisfactory explanation about the seized gold. Therefore, this case law is \nnot applicable in this case. \n\n \n \n \n \n (9) Appeal No. C/30758-\n30760/2024 \n \n \n19. \nAs mentioned above fact, evidence & circumstances, Revenue prima \nfacie failed to establish reasonable belief that they are smuggled gold. \nWhereas appellants successfully proved the legitimacy of the gold carried by \nthem. \n20. \nTherefore, Appeals have merit as discussed above and are liable to be \nallowed. \n21. \nAppeals allowed with consequential reliefs, if any, as per law. \n \n \n(Pronounced in open court on _12.02.2025_) \n \n \n \n (ANGAD PRASAD) \n MEMBER (JUDICIAL) \n \n \njaya \n"